Court Opinion

ID: 8203770
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:49:52.573848+00
Date Added: 2024-06-11T16:41:04.194685
License: Public Domain

SHIRLEY S. ABRAHAMSON, C.J.
¶ 50. {dissenting). The majority opinion is an anti-creditor opinion that emasculates Chapter 816 of the statutes. It empowers debtors to hide their assets from creditors who have procured valid, enforceable judgments. It will hinder the ability of all judgment creditors (individuals and corporations alike) to recover payment from all judgment debtors (individuals and corporations alike).
¶ 51. The court of appeals, in contrast to the majority opinion, got it right: Circuit courts and court *281commissioners have authority under Wis. Stat. §§ 816.03 and 816.06 to require a third party to submit to a supplemental examination so that a judgment creditor can discover assets of a debtor.
¶ 52. The text of Wis. Stat. § 816.06, the purpose of supplemental proceedings, and the statutory history of § 816.06 lead to the conclusion that the statutes permit the compelled examination of third parties who have information about the judgment debtor's property.
¶ 53. Text. Wisconsin Stat. § 816.03(1) provides that circuit courts and court commissioners have the authority under certain circumstances to order a judgment debtor to appear and answer concerning the judgment debtor's property.1 Section 816.06 further states that "[a]t the hearing upon such order or warrant such judgment debtor may be examined on oath and testimony on the part of either party may be offered" (emphasis added).
¶ 54. The court of appeals has declared that "the last phrase of Wis. Stat. § 816.06, 'testimony on the part of either party may be offered,' creates an ambiguity."2
¶ 55. Emphasizing the word "may," the majority appears to conclude that the phrase "testimony on the part of either party may be offered" allows either party to present testimony through witnesses, but only if the witness voluntarily agrees to testify. Majority op., ¶ 26. Thus, the majority acknowledges that Wis. Stat. § 816.06 allows third parties to testify at supplemental *282proceedings, but concludes that the parties, the circuit court judge, and the court commissioner have no authority to compel third-party testimony.
¶ 56. The majority purports to conduct a "plain meaning analysis," ¶ 18, but then simply asserts that its conclusion is "clear." Majority op., ¶ 19. Insisting that the holding is driven by the statute's "plain" language and meaning and insisting that the answer is clear does not make the language or meaning of the statute any more plain or the majority opinion any more persuasive. The statute's language and meaning were not so clear to the court of appeals in Courtyard Condominium Ass'n, Inc. v. Draper, 2001 WI App 115, ¶ 9, 244 Wis. 2d 153, 629 N.W.2d 38,3 or to the author of the supplemental proceedings chapter of the Wisconsin Practice Series.4 The court of appeals and the experienced commentator both concluded that Wis. Stat. § 816.06 was ambiguous and interpreted the provision to allow witnesses to be compelled.
¶ 57. The word "may" in the phrase "testimony on the part of either party may be offered" has nothing to do with whether witnesses may be compelled to testify. The word "may" means that a party may call witnesses, but is not required to do so. It is not mandatory for parties to call witnesses to offer testimony; hence, the legislature provided that testimony "may" be offered.5 The majority's reliance on the word "may" in Wis. Stat. § 816.06 is misplaced.
*283¶ 58. I would hold that the phrase "testimony on the part of either party may be offered" allows either party to call third parties to testify. The subpoena statutes applicable to special proceedings apply to Chapter 816 and allow the circuit court judge or court commissioner to compel witnesses to appear.
¶ 59. Purpose. Although the majority correctly acknowledges that a statute's purpose should guide this court's "plain meaning" interpretation, majority op., ¶ 14, the majority opinion's interpretation is at odds with the statute's purpose.
¶ 60. The purpose of Chapter 816 of the Wisconsin Statutes is to help judgment creditors when their judgments go unsatisfied. It provides "a post-judgment discovery procedure used where the judgment creditor is uncertain of the nature, location, extent, and amount of the debtor's property. ... In most instances without the information obtained at a supplemental examination, it is very difficult to discover the debtor's nonexempt property."6
*284¶ 61. Interpreting Wis. Stat. § 816.06 to compel third parties to submit to examination furthers the purpose of supplemental proceedings, while the majority's interpretation undermines it.
¶ 62. The majority allows judgment creditors to call witnesses who will voluntarily testify but not witnesses who must be compelled to provide relevant information. Limiting the statute in this way robs supplemental proceedings of their effectiveness as a discovery device for judgment creditors with unsatisfied judgments.
¶ 63. Judgment creditors have no need to compel witnesses who will voluntarily provide information. They can obtain this information outside of the courtroom. Supplemental proceedings are intended to allow judgment creditors the opportunity to gather information that would not be made available to them voluntarily. It seems that many of the witnesses most likely to have relevant information about the location of assets are those who would be most likely to prefer that the information remain unknown — i.e., those whose testimony would need to be compelled.
¶ 64. The court of appeals in the present case, as in Courtyard, endeavored to square the text of the statute with its purpose.
¶ 65. Courtyard asked whether the spouse of a judgment debtor could be required to testify in a supplemental proceeding regarding the fate of marital *285property.7 A statute allowed the creditor to proceed against marital property, even if it was held by a spouse who was not a judgment debtor, and the court of appeals reasoned that "the right of the judgment creditor to satisfy a judgment from marital property would be frustrated if the creditor could not examine the spouse."8 The court of appeals concluded that unless the judgment debtor's spouse testified, "the judgment creditor would lack the information needed to proceed against the spouse . . . ."9 Specifically, the court of appeals stated that:
It would be an unreasonable and absurd result to conclude that although a judgment creditor may reach all marital property to satisfy a judgment, the spouse of the judgment debtor does not have to submit to a supplementary examination in which the amount and location of marital property could be determined. Harmonizing the statutes involved to permit the supplementary examination of the judgment debtor's spouse gives full force and [e]ffect to the tenor of the statutes allowing the judgment creditor to reach marital property.10
¶ 66. In the present case, the considerations are similar. Chapter 242 of the Wisconsin Statutes, the Uniform Fraudulent Transfer Act, provides a remedy for judgment creditors when their judgment debtors seek to fraudulently protect their assets by transferring them to other entities.11 Prior to bringing suit under Chapter 242, a judgment creditor needs evidentiary support for *286his or her allegations and factual contentions.12 Thus, if a judgment debtor pleads ignorance and the judgment creditor is not able to discover information from other sources, the judgment creditor may not be able to establish the factual basis necessary to proceed against the third party.
¶ 67. Just as in Courtyard, the supplemental proceedings in the present case could have been used to protect the judgment creditor and counsel from having to risk sanction under § 802.05(3) for filing a factually unsupported complaint or to forgo collection of a valid judgment.13 The majority has frustrated the purpose of the statute by cutting off an important avenue of discovery that aids in the collection of judgments.
¶ 68. We need not fear an unreasonable, far-flung fishing expedition by the judgment creditor. The judge or court commissioner has discretion as to the scope of the examination.14 Thus, it would be left to the judge's *287or commissioner's discretion to determine when a third party's testimony justifies the burden that being compelled to testify might place on that third party.
¶ 69. Statutory History. Although the majority opinion relies heavily on the history of ch. 816, examining the evolution of Wis. Stat. § 816.06 from the 1856 version to its present form actually reveals that the legislature never intended the result reached by the majority today.
¶ 70. As the majority notes, Wis. Stat. ch. 120, §§ 202 and 206 (1856) explicitly allowed judgment creditors to compel the testimony of third parties. Majority op., ¶ 33. Section 202 provided that "either party may examine witnesses on his behalf' and section 206 provided that "[witnesses may be required to appear and testify on any proceedings under this chapter, in the same manner as upon the trial of an issue."
¶ 71. In 1878, after a renumbering, Wis. Stat. ch. 131, § 3033 provided that "such judgment debtor may be examined on oath, and witnesses may be required to appear and testify on the part of either party, in the same manner as upon the trial of an issue." The statute remained substantially in that form save some renumbering until 1935.
¶ 72. The majority focuses intently on the 1935 revisions appearing in Chapter 541 of the Laws of Wisconsin. In that revision, the language of § 273.06 (now § 816.06) was shortened to its current form: "At the hearing upon such order or warrant such judgment *288debtor may be examined on oath and testimony on the part of either party may be offered." The caption and text that emerged from the 1935 revisions are identical to the current caption and text of Wis. Stat. § 816.06.
¶ 73. Although the reference to witnesses being "required" to appear and testify was removed in 1935, a holistic look at the 1935 revisions reveals that the legislature's intent was not necessarily to change the scope of supplemental proceedings. The title of the session law is "An Act to revise portions of Title XXV proceedings in civil actions in courts of record and Title XXVI actions relating to real estate for clarity and conciseness of language and simplifying and improving said proceedings and for harmonizing the substantive provisions with the procedural rules which are being revised by the Supreme Court."15
¶ 74. In this instance, the statutory change from (1) "witnesses may be required to appear and testify on the part of either party" to (2) "testimony on the part of either party may be offered" seems more likely to have been motivated by a desire for conciseness or accuracy than a desire to make a dramatic substantive change.
¶ 75. The 1935 legislature may have removed the language explicitly stating that "witnesses may be required to appear and testify" because the language is unnecessary in light of a related provision, which the majority ignores. Wisconsin Stat. § 885.01 provides a broad grant of subpoena power. Specifically, it allows "any judge or clerk of a court or court commissioner . . . to require the attendance of witnesses and their production of lawful instruments of evidence in any action, matter, or proceeding . . . ." Wis. Stat. § 885.01(1) (emphasis added).
*289¶ 76. Supplemental proceedings certainly qualify as "proceedings" under Wis. Stat. § 885.0116 and either a judge or court commissioner presides over them. Nothing in chapter 816 clearly states that the legislature has prohibited compelling testimony of third parties at supplemental proceedings. There is no conflict between the phrase "such judgment debtor may be examined on oath and testimony on the part of either party may be offered," Wis. Stat. § 816.06, and the general subpoena power of Wis. Stat. § 885.01. The circuit judge or court commissioner can rely on the provisions of § 885.01 to compel testimony that either party wants to offer in supplemental proceedings.
¶ 77. As the author of a chapter on supplemental proceedings in the Wisconsin Practice Series concluded, "[w]hile the current statute is perhaps more ambiguous than its predecessor, there appears to be no reason for excluding the ability of a judgment creditor to call and examine third parties who may have information about the judgment debtor's property."17
¶ 78. The majority disregards the reasonable view of an experienced Wisconsin commentator, disregards the purpose of supplemental proceedings, and disregards the interaction between general subpoena powers and the supplemental proceedings statutes. It makes too much of a statutory revision that may well have been intended to be purely non-substantive.
¶ 79. In sum, the majority's interpretation of Wis. Stat. § 816.06 undermines the purpose of supplemental *290proceedings. It will hinder the ability of all judgment creditors (individuals and corporations alike) to satisfy outstanding judgments against all judgment debtors (individuals and corporations alike).
¶ 80. I agree with the court of appeals that the circuit court properly exercised its discretion when it ordered Orion Logistics to submit to a supplemental examination.
¶ 81. For the reasons stated above, I dissent.
¶ 82. I am authorized to state that Justices ANN WALSH BRADLEY and N. PATRICK CROOKS join this opinion.

 Wis. Stat. § 816.03(l)(a) ("When an execution against property has . . . been returned unsatisfied ... the court. . . shall, upon motion of the judgment creditor, order such judgment debtor, whether an individual, firm, corporation or other association, to appear before the court or judge and answer concerning the judgment debtor's property ....").

 Courtyard Condo. Ass'n, Inc. v. Draper, 2001 WI App 115, ¶ 9, 244 Wis. 2d 153, 629 N.W.2d 38.

 See ¶ 54, supra.

 See ¶ 77, infra.

 Cf. Heritage Farms, Inc. v. Market Ins. Co., 2012 WI 26, ¶ 37, 339 Wis. 2d 125, 810 N.W.2d 465 (recognizing that the word "may" in Wis. Stat. § 26.21(1) allows, but does not require, property owners whose property is damaged by forest fires to bring a civil action to recover double damages). *284regarding assets which ought to be subjected to the lien or discharge of a judgment is in the hands of third persons, and provide methods by which a judgment creditor may discover assets belonging to the judgment debtor in the possession of those third parties ....").

 See Robert A. Pasch, Wisconsin Collection Law § 16:1 (2d ed. 2006).
Long ago, this court explained that supplemental proceedings exist because "[u]nless a comprehensive and searching examination be allowed, an artful debtor might defeat the discovery sought." Heilbronner v. Levy, 64 Wis. 636, 637, 26 N.W. 113 (1885).
See also Eclipse Mfg. Co. v. U.S. Compliance Co., 886 N.E.2d 349, 355 (Ill. App. 2007) ("[The supplementary proceeding statute] provides a mechanism by which a judgment creditor may initiate supplementary proceedings, against a judgment debtor or a third party, to discover the assets of a judgment debtor .... [The statute] is to be liberally construed ....").
See also 30 Am. Jur. 2d Executions § 557 ("[Supplemental proceedings] address the circumstance where vital information

 Courtyard, 244 Wis. 2d 153, ¶¶ 1-4.

 Id., ¶ 15.

 Id.

 Id., ¶ 18 (citation omitted).

 See, e.g., Wis. Stat. § 242.04(1)(a).

 Wis. Stat. § 802.05(2)(c).

 The majority asserts that the court of appeals disregarded the corporate form by compelling Larson to testify regarding his two entirely separate corporations. Majority op., ¶ 20. This misconstrues the court of appeals' opinion. It was the likelihood of relevant evidence being discovered from Orion Logistics that justified the compelled testimony.
As an aside, although the majority opinion and I refer to Larson's businesses as "corporations," they are limited liability companies, unique corporate structures governed by Wis. Stat. ch. 183.
The majority's preoccupation with "the corporate form" suggests that it fears affirming the court of appeals would be damaging to businesses. Yet the majority's holding undermines the ability of all judgment creditors (including businesses) to satisfy judgments against elusive judgment debtors.

 Heilbronner v. Levy, 64 Wis. 636, 637, 26 N.W. 113 (1885). See also Robert A. Pasch, Wisconsin Collection Law § 16:4 (2d *287ed. 2006) ("A logical conclusion to be drawn from [Heilbronner\ is that the judge or court commissioner has discretionary power as to who, in addition to the judgment debtor, may provide testimony and information at a supplemental examination.").

 Title, ch. 541, Laws of 1935.

 See Wis. Stat. § 816.03(2) ("The fact that garnishee proceedings have been commenced in aid of or that property has been levied on under a second execution shall not bar proceedings under this section ....") (Emphasis added.)

 Robert A. Pasch, Wisconsin Collection Law § 16:4 (2d ed. 2006).