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Legal Notes Blog > November 2014

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By Alexandria E. McCool, Associate Attorney

 

Wisconsin has a long-standing line of case law addressing jurisdiction and venue in non-earnings garnishment cases.[1]  In these cases, the property to which the garnishment seeks to attach is real and tangible, such as chattel or beets, making the location of the property and jurisdiction over the property relatively clear-cut.  However, as intangible property, wages are a different story.  Employers no longer pay their employees with physical currency.  Funds are transferred across the country (and even across the globe) electronically, making it a virtual impossibility to pinpoint the precise physical location of an employee’s wages.  More companies than ever operate on a national, if not international scale, and, as is often the case in Wisconsin, a debtor may live within the borders of the state yet work for an employer just across the state line. The question then arises:  when a creditor chooses to exercise its right to collect upon a debt via an earnings garnishment, where is the garnishment properly filed?  In the recent case of Midland Funding LLC v. Mizinski,[2] the court of appeals applied principles established by the Wisconsin Supreme Court in a different context, and finally confirmed the answer to this question.[3]

 

In 1976 the Wisconsin Supreme Court decided Dalton v. Meister, a case involving a dispute over an allegedly fraudulent conveyance of land located in Hawaii [4].  Although Dalton did not specifically address garnishments, the decision did ultimately establish the precedent on which the court relied in Midland Funding.  Specifically, in response to the defendant’s argument that jurisdiction over the dispute did not lie in Wisconsin due to the location of the land, the Dalton court reasoned that “[a] state has power to exercise judicial jurisdiction to order a person, who is subject to its judicial jurisdiction, to do, or not to do, an act in the state, although the carrying out of the decree may affect a thing in another state.”[5]  In line with this this reasoning, the court ultimately concluded that “Wisconsin courts may issue in personam orders which may operate on out-of-state property.”[6]

 

In Midland Funding, the appellate court was asked for the first time to apply the personal jurisdiction doctrine established in Dalton to an earnings garnishment.  In that case, the debtor, Mizinski, sought relief from an earnings garnishment filed on behalf of the creditor, Midland Funding LLC, partially on the grounds that the circuit court in St. Croix County, Wisconsin lacked in rem jurisdiction over the physical wages themselves, despite the court’s in personam jurisdiction over both Mizinski and his employer, Danco.[7]  Following Dalton, the court of appeals disagreed and ultimately found that the court’s personal jurisdiction over both the debtor and the employer was sufficient such that the circuit court in Wisconsin could exercise jurisdiction over the earnings garnishment.[8]

 

As a practical matter, the Midland Funding decision now means that, should such action be necessary, creditors and their attorneys in the state of Wisconsin may file earnings garnishments in Wisconsin, provided that the court has both personal jurisdiction over the debtor and the debtor’s employer.[9]



[1] See Thomas v. Citizens National Bank of Pocomoke City, Maryland, 157 Wis. 635, 640, 147 N.W. 1005 (Wis. 1914); see also Kuehn v. Nero, 145 Wis. 256, 258-259, 130 N.W. 56 (Wis. 1911); Bates v. Chicago RR Co., 60 Wis. 296, 19 N.W. 72 (Wis. 1884); Morawetz v. Sun Insurance Office, 96 Wis. 2d 175, 71 N.W. 109 (Wis. 1897).

[2] Midland Funding v. Mizinski, 2014 WI App 82, 355 Wis. 2d. 475, 854 N.W.2d 371 (petition for certiorari denied).

[3] For a detailed background and discussion of the procedural history of Midland Funding v. Mizinski, see the July 2014 Kohn Law Firm Legal Notes Blog, “Wisconsin Legal Updates,” written by Attorney Dave Ambrosh (https://www.kohnlaw.com/Legal-Notes-Blog/July-2014-%281%29/WISCONSIN-LEGAL-UPDATES.aspx).

[4] See Generally Dalton v. Meister, 71 Wis. 2d 504, 239 N.W.2d 9 (1976).

[5] Id. at 512-513.

[6] Id. at 513.

[7] See Midland Funding, 2014 WI App 82, ¶ 1, 355 Wis. 2d. 475, 854 N.W.2d 371.

[8] Id. at ¶ 19.

[9] Jurisdiction is just one factor affecting the creditor’s ability to file an earnings garnishment, and earnings garnishments are still subject to the requirements and limitation of Chapter 812 of the Wisconsin Statutes.

Posted: 11/7/2014 12:56:56 PM by Tom Connor | with 0 comments