                                                                    2019 WI 42

                  SUPREME COURT               OF   WISCONSIN
CASE NO.:              2017AP1408
COMPLETE TITLE:        Security Finance,
                                  Plaintiff-Respondent,
                            v.
                       Brian Kirsch,
                                  Defendant-Appellant-Petitioner.

                           REVIEW OF DECISION OF THE COURT OF APPEALS
                           Reported at 382 Wis. 2d 271,915 N.W.2d 730
                                      (2018 – unpublished)

OPINION FILED:         April 19, 2019
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:         February 1, 2019

SOURCE OF APPEAL:
   COURT:              Circuit
   COUNTY:             Washington
   JUDGE:              Todd K. Martens

JUSTICES:
   CONCURRED:          KELLY, J. concurs, joined by R.G. BRADLEY, J.
                       (opinion filed).
  DISSENTED:           A.W. BRADLEY, J. dissents, joined by ABRAHAMSON,
                       J. (opinion filed).
  NOT PARTICIPATING:   DALLET, J. did not participate.

ATTORNEYS:

       For the defendant-appellant-petitioner, there were briefs
filed by Briane F. Pagel, and Lawton & Cates, S.C., Madison.
There was an oral argument by Briane F. Pagel.


       For the plaintiff-respondent, there was a brief filed by
Lisa M. Lawless, Marci V. Kawski, Edward J. Heiser, Jr., and
Husch Blackwell LLP, Milwaukee. There was an oral argument by
Lisa M. Lawless.


       An amicus curiae brief was filed on behalf of Legal Action
of   Wisconsin,        Inc.,   by   Jessica   Roulette,   Gregory   Myszkowski,
Elizabeth   Stinebaugh,   Nicole   Zimmer,   and   Legal   Action   of
Wisconsin, Inc, Milwaukee.


     An amicus curiae brief was filed on behalf of Credit Union
National Association and Wisconsin Credit Union League, by John
W. Raihala and Clifford & Raihala, S.C., Madison.


     An amicus curiae brief was filed on behalf of Legal Aid
Society of Milwaukee, Inc., by Karen M. Bauer, Dana M. Roth, and
Legal Aid Society of Milwaukee, Inc., Milwaukee.




                                   2
                                                                      2019 WI 42
                                                              NOTICE
                                                This opinion is subject to further
                                                editing and modification.   The final
                                                version will appear in the bound
                                                volume of the official reports.
No.       2017AP1408
(L.C. No.    2017SC271)

STATE OF WISCONSIN                          :            IN SUPREME COURT

Security Finance,

              Plaintiff-Respondent,                                FILED
      v.                                                      APR 19, 2019
Brian Kirsch,                                                    Sheila T. Reiff
                                                              Clerk of Supreme Court
              Defendant-Appellant-Petitioner.




      REVIEW of a decision of the Court of Appeals.              Affirmed.


      ¶1     ANNETTE KINGSLAND ZIEGLER, J.         This is a review of an
unpublished decision of the court of appeals, Security Finance
v. Kirsch, No. 2017AP1408, unpublished slip op. (Wis. Ct. App.

Apr. 11, 2018), affirming the Washington County circuit court's
order.1     The order granted Security Finance's ("Security") motion
to    dismiss    Brian    Kirsch's   ("Kirsch")     counterclaims         against
Security arising under Wis. Stat. chs. 425 and 427 (2015-16).2

      1   The Honorable Todd K. Martens presided.
      2All subsequent references to the Wisconsin Statutes are to
the 2015-16 version unless otherwise indicated.
                                                                             No.    2017AP1408



The court of appeals affirmed the circuit court, concluding that
Kirsch's counterclaims were properly dismissed.
       ¶2        This court must consider whether a debtor who has been
sued on a consumer credit transaction without first receiving a
notice      of    right     to   cure    default     under   ch.       425    may    sue    the
creditor for damages under ch. 427, the Wisconsin Consumer Act
("WCA").         We conclude that a creditor's failure to provide such
notice does not constitute a sufficient basis for relief under
ch.    427.        As a     result, Kirsch's          counterclaims were             properly
dismissed, and we affirm the court of appeals.
                 I.   FACTUAL BACKGROUND AND PROCEDURAL POSTURE
       ¶3        Security    and    Kirsch     entered    into     a    loan       agreement,

whereby Security loaned Kirsch $1,000 and Kirsch agreed to pay
it back with interest in 12 equal payments from July 1, 2016, to
June 1, 2017.             Kirsch defaulted on the payment obligation.                        On
February 6, 2017, Security filed a small claims lawsuit against
Kirsch to enforce the loan agreement and collect the alleged
debt.          Kirsch      answered      and       counterclaimed,       alleging          that

Security filed this action "seeking to collect money without,
upon information and belief, serving defendant with a notice of
right to cure default which satisfies the requirements laid out
in     [Wis.      Stat.     §§] 425.104      and     [425.]105,"        seeking      damages
allowed        under      Wis.   Stat.    § 427.104.           Specifically,          Kirsch
alleged that Security "has no right to file an action without
first serving a sufficient notice of right to cure default," and
that        this          failure        "constitutes          a        violation            of
[§] 427.104(1)(g) . . . and                a       violation       of        [Wis.     Stat.
                                               2
                                                                             No.   2017AP1408



§] 425.302."         Thereafter, Security sought to voluntarily dismiss
the complaint, without prejudice and Kirsch objected.                              The case
was       reopened,       and    Kirsch       filed       an    amended        answer    and
counterclaims         which      added    a       claim    that      Security      violated
§ 427.104(1)(j).
      ¶4      Security moved to dismiss Kirsch's counterclaims.                          The
circuit court granted the motion to dismiss, stating that Kirsch
"baldly asserts that failure to provide proper notice of the
right to cure default can constitute threatening or harassing
behavior."      The circuit court further stated that "[i]n general,
the    remedy       for   the    violation        alleged       is   dismissal      without
prejudice."         The circuit court concluded that Kirsch made "no

showing      [he]    would      be   entitled      to     any   other    remedy."        The
circuit court explained:

           In terms of the dismissal without prejudice, the
      defendant's counterclaim is moot, and the argument
      that the defendant is entitled to these additional
      remedies requires a . . . tortured interpretation of
      the statute and the facts, and that's not an
      interpretation that I am required to accept.
As    a    result,     the      circuit   court       dismissed        the    counterclaim
relating to the notice of right to cure default.
      ¶5      The     court     of   appeals       affirmed      the    circuit     court's
dismissal.       Kirsch, No. 2017AP1408, unpublished slip op., ¶¶1,
26.
      ¶6      The petition for review presented one issue:

           Whether a customer [who has been] sued on a
      consumer credit transaction without first receiving a
      notice of right to cure default may sue the merchant


                                              3
                                                                   No.     2017AP1408


      for damages under          chapter      427    of    the   Wisconsin
      Consumer Act?
      ¶7     This   court's    order    granting     Kirsch's      petition      for
review provides that "pursuant to Wis. Stat. § (Rule) 809.62(6),
[Kirsch] may not raise or argue issues not set forth in the
petition for review unless otherwise ordered by the court."
                         II.    STANDARD OF REVIEW
      ¶8     Whether a complaint or a counterclaim "states a claim
upon which relief can be granted is a question of law for our

independent review; however, we benefit from discussions of the
court   of    appeals   and   circuit   court."       Data   Key     Partners     v.

Permira     Advisers LLC, 2014     WI       86,   ¶17, 356   Wis. 2d 665, 849
N.W.2d 693 (citing DeBruin v. St. Patrick Congregation, 2012 WI
94, ¶10, 343 Wis. 2d 83, 816 N.W.2d 878).
      ¶9     In reviewing a motion to dismiss, this court accepts
factual allegations in the complaint or counterclaim as true.
Id., ¶18 (citing Strid v. Converse, 111 Wis. 2d 418, 422–23, 331
N.W.2d 350 (1983)).       However, this court does not accept legal
conclusions asserted in a complaint or counterclaim, "and legal
conclusions are insufficient to withstand a motion to dismiss."
Id. (citing John Doe 67C v. Archdiocese of Milwaukee, 2005 WI
123, ¶19, 284 Wis. 2d 307, 700 N.W.2d 180; Mitchell v. Lawson
Milk Co., 532 N.E.2d 753, 756 (Ohio 1988)).
      ¶10    This case requires the interpretation and application
of   Wis.    Stat. § 427.104    to determine        if    Kirsch's       claim that
Security violated § 427.104 by commencing an action against him
before providing a notice of default and right to cure survives


                                        4
                                                                       No.    2017AP1408



Security's    motion      to     dismiss.           "The   interpretation           and
application of       a statute    present       questions of       law that        this
court reviews de novo while benefitting from the analyses of the
court of appeals and circuit court."                State v. Alger, 2015 WI 3,

¶21, 360 Wis. 2d 193, 858 N.W.2d 346 (citing State v. Ziegler,
2012 WI 73, ¶37, 342 Wis. 2d 256, 816 N.W.2d 238).
                                III.    ANALYSIS
     ¶11    Kirsch     argues    that    Security's        failure       to    provide
sufficient    notice     of    right    to   cure     required    by     Wis.     Stat.
§§ 425.104 and 425.105 constitutes a violation of Wis. Stat.
§ 427.104(1)(g) and (1)(j).             Because the petition for review
concerns    only   the   ch.    427    claim,    we    cabin     our    analysis     to

whether the ch. 425 failure to send sufficient notice of right
to cure default can form the basis for a violation of ch. 427 of
the WCA.3
     ¶12    Kirsch argues that he is entitled to relief under Wis.
Stat. § 427.104 because Security filed the lawsuit against him



     3 We will not reach this new argument regarding liability
for an independent Wis. Stat. ch. 425 claim because it was not
raised in the petition for review, it was not raised in the
counterclaim, and it was not argued to the circuit court. We do
however consider the issue raised in Kirsch's petition for
review regarding ch. 427, but decline to consider any issues
presented outside the petition for review.     We therefore need
not consider any arguments regarding Kirsch's counterclaims
arising under ch. 425 and decline to do so. See, e.g., State v.
Sholar, 2018 WI 53, ¶49, 381 Wis. 2d 560, 912 N.W.2d 89 (citing
State v. Sulla, 2016 WI 46, ¶7 n.5, 369 Wis. 2d 225, 880
N.W.2d 659) ("A petitioner's arguments are limited to the issues
on   which  we   granted  review,   unless  this   court  orders
otherwise.").

                                         5
                                                                     No.       2017AP1408



without first sending a notice of right to cure under ch. 425.
He argues that that dismissal is not the sole consequence for
failing       to     provide    notice    because       § 427.104     independently
creates a cause of action for which § 427.105 provides a remedy.
Kirsch's      argument,    however,      fails     to   connect     how    a   ch.   425
notice       failure    transforms     into    a   prohibited       practice       under
§ 427.104(1)(g) or (1)(j).
       ¶13    We begin with the language of Wis. Stat. § 427.104(1).
See State ex rel. Kalal v. Cir. Ct. for Dane Cty., 2004 WI 58,

¶45,         271      Wis. 2d 633,       681       N.W.2d 110         ("[S]tatutory
interpretation         begins   with     the   language     of    the     statute.").
Section 427.104 states, in relevant part as follows:

            In attempting to collect an alleged debt arising
       from a consumer credit transaction or other consumer
       transaction, including a transaction primarily for an
       agricultural purpose, where there is an agreement to
       defer payment, a debt collector may not:

            (a) Use or threaten force or violence to cause
       physical harm to the customer or the customer's
       dependents or property;

               (b)    Threaten criminal prosecution;

            (c) Disclose or threaten to disclose information
       adversely affecting the customer's reputation for
       credit worthiness with knowledge or reason to know
       that the information is false;

            (d) Initiate     or     threaten  to    initiate
       communication with the customer's employer prior to
       obtaining final judgment against the customer, except
       as permitted by statute including specifically s.
       422.404, but this paragraph does not prohibit a debt
       collector from communicating with the customer's
       employer solely to verify employment status or
       earnings or where an employer has an established debt
       counseling service or procedure;
                                           6
                                              No.   2017AP1408


     (e) Disclose or threaten to disclose to a person
other than the customer or the customer's spouse
information   affecting    the  customer's  reputation,
whether or not for credit worthiness, with knowledge
or reason to know that the other person does not have
a legitimate business need for the information, but
this paragraph does not prohibit the disclosure to
another   person   of   information  permitted  to   be
disclosed to that person by statute;

     (f) Disclose or threaten to disclose information
concerning the existence of a debt known to be
reasonably disputed by the customer without disclosing
the fact that the customer disputes the debt;

     (g) Communicate with the customer or a person
related to the customer with such frequency or at such
unusual hours or in such a manner as can reasonably be
expected to threaten or harass the customer;

     (h) Engage in other conduct which can reasonably
be expected to threaten or harass the customer or a
person related to the customer;

     (i) Use obscene or threatening language in
communicating with the customer or a person related to
the customer;

     (j) Claim, or attempt or threaten to enforce a
right with knowledge or reason to know that the right
does not exist;

     (k) Use a communication which simulates legal or
judicial process or which gives the appearance of
being authorized, issued or approved by a government,
governmental agency or attorney-at-law when it is not;

     (L) Threaten action against the customer unless
like action is taken in regular course or is intended
with respect to the particular debt; or

     (m) Engage in conduct in violation of a rule
adopted by the administrator after like conduct has
been restrained or enjoined by a court in a civil
action by the administrator against any person
pursuant to the provisions on injunctions against
false,   misleading,    deceptive   or   unconscionable
agreements or conduct (ss. 426.109 and 426.110).

                          7
                                                                  No.    2017AP1408



§ 427.104(1).      The     statute      prohibits     specific    harassing      or
threatening     conduct       towards   debtors.4       Specifically,      Kirsch
claims   that   Security       violated       § 427.104(1)(g)    and    (1)(j)   by
failing to provide ch. 425 notice of right to cure.                       Section
427.104(1)(g) prohibits a creditor from "[c]ommunicat[ing] with
the customer . . . with such frequency or at such unusual hours
or in such a manner as can reasonably be expected to threaten or
harass the customer."            Kirsch alleges that Security's filing
suit without first providing a notice of right to cure in and of
itself   constitutes      a    prohibited       communication    under    subsec.


     4 The  Wisconsin   Department   of  Financial    Institutions
("WDFI") has provided commentary on the severity of Wis. Stat.
ch. 427 violations.   The WDFI cautions creditors, stating that
"[w]hile you have a right to attempt to collect a legitimate
debt owed you, Wisconsin law provides that there are certain
things you cannot do in attempting to collect that debt . . . ."
Wisconsin Dep't of Financial Insts., Prohibited Practices,
https://www.wdfi.org/wca/business_guidance/creditors/debt_collec
tion/prohibited_practices.htm (last visited Feb. 20, 2019).
Prior to listing the threatening or harassing conduct prohibited
by Wis. Stat. § 427.104(1), the WDFI states, "Though it may be
tempting to 'cross the line' in attempting to collect a debt
rightfully owed you, be aware that the following actions are
illegal and may result in severe penalties."       Id.   The WDFI
further addresses the definition of "harassment" in ch. 427
context, stating that "it usually means that a collector used
obscene or threatening language with a consumer."        Wisconsin
Dep't of Financial Insts., WI Debt Collection Frequently Asked
Questions, https://www.wdfi.org/wca/business_guidance/creditors/
debt_collection/faq.htm (last visited Feb. 20, 2019). The WDFI
further states that harassment includes "calling the consumer
names, demeaning the consumer's occupation, or questioning the
decisions that led to the consumer's account being placed with a
collection agency," along with calling a debtor before 8:00 a.m.
or after 9:00 p.m., or calling a debtor with sufficient
frequency. Id.


                                          8
                                                                         No.      2017AP1408



(1)(g).      Notably, Kirsch's counterclaim is completely devoid of
any      allegation            that      Security          "[c]ommunicate[d]            with
[Kirsch] . . . with such frequency or at such unusual hours or
in such a manner as can reasonably be expected to threaten or
harass    [Kirsch]."           In other       words, the procedural defect                of
filing    suit without          first    providing      a notice       of default and
right to cure as outlined in ch. 425 does not create liability
under § 427.104(1)(g) in the absence of "[c]ommunicat[ing] with
the customer . . . with such frequency or at such unusual hours
or in such a manner as can reasonably be expected to threaten or
harass the customer."            Kirsch makes no such allegation.
       ¶14    Kirsch also claims that Security violated Wis. Stat.

§ 427.104(1)(j), which prohibits a creditor from "[c]laim[ing],
or     attempt[ing]       or    threaten[ing]         to    enforce     a     right     with
knowledge or reason to know that the right does not exist."
Kirsch alleges that Security's failure to provide a notice of
default and right to cure in and of itself is a violation of
§ 427.104(1)(j).          The crux of Kirsch's claim is that Security

"[c]laim[ed],      attempt[ed]          or    threaten[ed]      to   enforce      a    right
with knowledge or reason to know that the right does not exist"
when    it    filed   a    lawsuit       against     him     without    providing        the
requisite ch. 425 notice of default and right to cure.                                 In so
doing,    Kirsch      argues      that       Security   could    have       no   right    to
enforce      the loan agreement              until   it complied       with      ch.   425's
procedural requirements.                 However, at the time that Security




                                               9
                                                                             No.   2017AP1408



filed its complaint, a valid and binding loan agreement had been
defaulted upon under Wis. Stat. § 425.103(2)(a),5 and money was
due to Security.            In other words, it had the "right" to enforce
compliance with the agreement.                        Security, however, improperly
failed to give Kirsch the requisite notice and the opportunity
to "cure" before it filed suit.                      It jumped the gun.        Kirsch then
asserts that this procedural failure relieves him of all loan
obligations and also entitles him to ch. 427 penalties.                                   In
other words, Kirsch argues that a failure to provide a ch. 425
notice of default and right to cure (1) relieves him of any
obligation to pay the unpaid loan; (2) amounts to Security's
relinquishment         of    any    "right"       to    enforce      the    defaulted   loan

obligation; and thus, (3) entitles him to relief under ch. 427.
Regarding the claim Kirsch makes here, however, the statutes do
not state that a creditor relinquishes the "right" to enforce a



     5
         Wisconsin Stat. § 425.103(2) states in relevant part as follows:
          (2) "Default", with respect to a consumer credit
     transaction, means without justification under any
     law:

          (a) With respect to a transaction other than one
     pursuant to an open-end plan and except as provided in
     par. (am); if the interval between scheduled payments
     is 2 months or less, to have outstanding an amount
     exceeding one full payment which has remained unpaid
     for more than 10 days after the scheduled or deferred
     due dates, or the failure to pay the first payment or
     the last payment, within 40 days of its scheduled or
     deferred due date; . . . .

§ 425.103(2)(a).


                                                10
                                                                               No.    2017AP1408



defaulted loan obligation if it does not provide proper ch. 425
notice.
      ¶15    Wisconsin Stat. § 421.201(6)(b), consistent with Wis.
Stat.     § 427.104(1)(j),        provides          that     "[a]       merchant      may    not
enforce     rights      against    the    customer          to    the    extent       that    the
provisions of the agreement violate subsec. IV of ch. 422 or ch.
423."       Kirsch does not allege that any provision of the loan
agreement violates chs. 422 or 423.                      The word "right" refers to
the   rights,      as   here,     contained         in   the      loan       agreement.        It
appears     undisputed     that     Security         sought       to    enforce       the    loan
agreement,     a   "right,"       to   enforce        the    unpaid       loan       obligation
after default.

      ¶16    The     notice     provision          statute       in    ch.    425     does   not
provide      for   a    penalty    for        noncompliance            arising       under    any
specific WCA subsection, other than the fact that a complaint is
not to be filed before notice is properly given.6                                Indeed, ch.
425 does otherwise contain penalty provisions in other sections,
but not for failure to comply with such notice requirements.

The   WCA    statutes      provide       no    other       provision         entitling       this
debtor to relief, other than that of dismissal of an improperly
filed complaint.


      6We note that Wis. Stat. § 425.302 states that it "applies
to all violations for which no other remedy is specifically
provided." § 425.302(2). However, as will be discussed below,
Wis. Stat. § 427.105 provides a specific remedy for a Wis. Stat.
§ 427.104 violation, and the scope of this appeal is limited to
Kirsch's § 427.104 claim.     We therefore decline to further
address § 425.302.

                                              11
                                                                             No.    2017AP1408



      ¶17   Kirsch does not petition this court to review whether
other penalties might be available to him.                             Instead, he claims
that a creditor's duty to provide a notice of default and right
to cure under ch. 425 entitles him to the significant penalties
available for a ch. 427 violation.                        Wisconsin Stat. §§ 425.104
and 425.105 establish a creditor's requirement to issue a debtor
a notice of default and right to cure prior to filing suit

against     the    debtor.              Under    § 425.104(1),          "A   merchant       who
believes that a customer is in default may give the customer
written notice of the alleged default and, if applicable, of the
customer's        right       to   cure        any    such   default         (s. 425.105)."
Section 425.105(1) states as follows:

           A merchant may not accelerate the maturity of a
      consumer credit transaction, commence any action
      except as provided in s. 425.205(6), or demand or take
      possession of collateral or goods subject to a
      consumer lease other than by accepting a voluntary
      surrender thereof (s. 425.204), unless the merchant
      believes the customer to be in default (s. 425.103),
      and then only upon the expiration of 15 days after a
      notice is given pursuant to s. 425.104 if the customer
      has the right to cure under this section.
      ¶18   Since        it   is       undisputed     that   Security        was    to     first
provide     notice        before        commencing        this    action,         Kirsch    was
entitled to dismissal of the action without prejudice.                               Notably,
the   language      of    Wis.         Stat.    §§ 425.104       and    425.105     does    not
specifically       provide         a    remedy       or   penalty      for    a    creditor's
failure to comply with either section.                       While other sections of
ch. 425 expressly provide for remedies and penalties arising
under Wis. Stat. §§ 425.302 through 425.304, Kirsch does not


                                                12
                                                                                   No.       2017AP1408



petition this court for review of relief available due to any
such sections of ch. 425.7                 Rather, Kirsch seeks relief under ch.
427.
       ¶19    The parties do not dispute that Security failed to
properly comply with the notice of default and right to cure
provisions         of    ch.     425.      Kirsch,          however,       seeks    to       shoehorn
Security's         failure       to     comply    with       ch.     425    into         a    ch.   427
violation      in        order    to    recover       the     significant          remedies         and
penalties          ch.    427     imposes.            The     sort     of    threatening            and
harassing conduct which violates Wis. Stat. § 427.104 entitles
one to "actual damages and the penalty provided in s. 425.304,"
but goes further to provide for "damages caused by emotional

distress or mental anguish with or without accompanying physical
injury proximately caused by a violation of this chapter."                                          Wis.
Stat. § 427.105(1).               Section 427.105 is the only section in the
entire       WCA    where        damages    for       emotional        distress          or    mental
anguish are mentioned.                  Given that § 427.104 addresses creditors


       7
       See Wis. Stat. § 425.107 (providing for remedies and
penalties under Wis. Stat. § 425.303 where a consumer credit
transaction is unconscionable); Wis. Stat. § 425.108 (regarding
extortionate extensions of credit, provides that such extensions
are unenforceable and for triple the penalty provided under Wis.
Stat. § 425.304(1)).

     Wisconsin Stat. § 425.304 states that a person who violates
the WCA in a manner covered by the section is liable for "the
greater of: (1) Twice the amount of the finance charge in
connection with the transaction, except that the liability under
this subsection shall not be less than $100 nor greater than
$1,000; or (2) The actual damages, including any incidental and
consequential damages. . . ."


                                                 13
                                                                          No.     2017AP1408



that harass or threaten debtors, it is hardly a surprise that a
violation of § 427.104 would allow for emotional distress or
mental anguish damages in addition to the remedies and penalties
provided       by    Wis.    Stat.      § 425.304.          Indeed,      punishment     for
violations          of   § 427.104(1)          addresses     egregious     behavior       by
creditors directed toward debtors and thus provides debtors with
greater remedies and penalties.                       By stark contrast, procedural
errors such as pleading defects are treated much differently, as
creditors face significantly less potential exposure under ch.
425 for such miscues.8                 While a failure to provide a notice of
default       and    right      to   cure      is    not   expressly     linked    with    a
statutory       remedy       under       the        WCA,   the   WCA's     proportionate

treatment of differing violations supports a conclusion that the
procedural deficiency Kirsch complains of does not fall under
§ 427.104, and does not lead to the harsh penalties imposed by
§§ 427.105 and 425.304.
     ¶20       Relevant case law further indicates that a failure to
comply with ch. 425's procedural requirement to notice and the

right    to    cure      does    not    automatically        eliminate     a    creditor's
ability to enforce a loan agreement and does not, in and of
itself, constitute a ch. 427 violation.                          Wisconsin courts and



     8 See Wis. Stat. § 425.109(4) (stating that failure to
comply with pleading requirements is not a violation of chs. 421
to 427, but providing that attorney fees under Wis. Stat.
§ 425.308 may be awarded if the debtor "establishes by a
preponderance of the evidence that the failure to comply was
willful or intentional").


                                                14
                                                                      No.    2017AP1408



federal courts have recognized the distinction between a failure
to comply with the procedural requirements imposed by ch. 425
and conduct which violates ch. 427.
       ¶21   In       Beal   v.         Wyndham       Vacation       Resorts,      956

F. Supp. 2d 962 (W.D. Wis. 2013), a debtor purchased "timeshare
points," making a down payment and financing the remainder of
the purchase price through a credit agreement with a creditor.
The debtor stopped making payments shortly thereafter.                          Id. at
966.    The creditor eventually sued the debtor in the Sauk County
circuit court, seeking a declaration of interest in real estate
and a foreclosure judgment against the debtor.                            Id. at 967.
However, prior to commencing the action, the creditor failed to

send the debtor a notice of default and right to cure letter as
required by Wis. Stat. §§ 425.104 and 425.105.                      Id.     The debtor
filed a motion for summary judgment on those grounds, and the
circuit      court    granted     the     debtor's      motion,     dismissing     the
matter.      Id.     The debtor then sued the creditor in federal court
claiming, among other things, that the debtor was entitled to
damages because the creditor violated Wis. Stat. § 427.104(1)(j)
by failing to provide the debtor a notice of default and right
to cure prior to commencing the action against her.                       Id. at 968–
69.     Both parties moved for summary judgment on the debtor's
§ 427.104(1)(j) claim and others.               Id.
       ¶22   The district court granted the creditor's motion for
summary judgment on the debtor's Wis. Stat. § 427.104 claim.
Id. at 970.          The court explained that "the requirement that a
creditor     provide     a   notice      of     right   to   cure    default     is   a
                                           15
                                                                           No.     2017AP1408



procedural hurdle creditors must clear in order to pursue their

remedies."        Id.    at   969    (emphasis        added)   (citing           Wis.    Stat.
§ 425.105).       Quoting the Wisconsin court of appeals' decision in
Rosendale State Bank v. Schultz, 123 Wis. 2d 195, 365 N.W.2d 911
(Ct. App. 1985), the district court further stated, "The purpose
of the notice of right to cure 'is to give the customer an
opportunity, before the merchant accelerates the obligation, to
restore his or her loan to a current status and thus preserve
the customer-merchant relationship.'"                    Beal, 956 F. Supp. 2d at
969 (quoting Rosendale, 123 Wis. 2d at 199).                           Therefore, the
district       court    stated      that     "the     appropriate      remedy           for    a
creditor's failure to comply with these procedural requirements

is dismissal of the creditor's action, which is what happened to
[the    creditor's]      action     against       [the    debtor]     in    the        Circuit
Court    for    Sauk    County."           Id.      Because    the    debtor           secured
dismissal of the creditor's circuit court action, she "received
the relief to which she is entitled under these provisions."
Id. at 970.          In other words, the district court concluded that
the    creditor      retained    the    right       to   payment     from        the    debtor
regardless      of     whether    the      creditor      complied    with        the     WCA's
notice of default and right to cure requirements.                           Accordingly,
the debtor had no remedy under § 427.104(1)(j).
       ¶23     The court of appeals recognized a similar distinction
between chs. 425 and 427 violations in Credit Acceptance Corp.
v. Kong, 2012 WI App 98, 344 Wis. 2d 259, 822 N.W.2d                               506.       In
Kong the defendant purchased a vehicle, making a down payment
and borrowing the remainder of the purchase price.                                 Id., ¶2.
                                             16
                                                                             No.    2017AP1408



After     the defendant            had    stopped making         payments     but    10 days
before the defendant was in default under the WCA, the creditor
prematurely sent the defendant a notice of default and right to
cure letter.           Id., ¶¶4–5, 13.            The creditor then repossessed the

defendant's vehicle and subsequently commenced an action against
the defendant seeking a deficiency judgment for the remainder of
the purchase price.                 Id., ¶5.            The defendant counterclaimed,
asserting WCA violations.                  Id.     The circuit court concluded that
the     creditor        violated         the     WCA,    and    awarded      damages      which
included        a    $1,000 statutory penalty                 for a   violation      of    Wis.
Stat. § 427.104.            See id., ¶6.
      ¶24       The court of appeals affirmed the circuit court, but

modified the judgment to remove the $1,000 statutory penalty.
Id., ¶18.            The court of appeals concluded that the notice of
default     and        right      to     cure     was     "invalid"     because      it     was
prematurely issued, meaning that the creditor "was not entitled
to engage in self-help repossession of the vehicle."                               Id., ¶¶13–
14.       The       court   of    appeals       thus    concluded     that    the    creditor
violated        Wis.    Stat.      § 425.206,9          and    that   the    defendant      was
entitled to damages under Wis. Stat. §§ 425.305 and 425.308.
Id., ¶¶14, 16–17.                However, the court of appeals concluded that

      9Wisconsin  Stat.   § 425.206   is   titled,  "Nonjudicial
enforcement limited," and restricts the circumstances in which a
creditor "may take possession of collateral or goods subject to
a consumer lease," providing that a violation of the section is
subject to remedies and penalties under Wis. Stat. § 425.305.
Section 425.206 appears today as it did when Credit Acceptance
Corp. v. Kong, 2012 WI App 98, 344 Wis. 2d 259, 822 N.W.2d 506,
was decided.


                                                  17
                                                                                No.        2017AP1408



the    creditor        did     not     violate       any    provision          of     Wis.     Stat.
§ 427.104.            Id.,    ¶18.      Addressing          the    defendant's            § 427.104

claim,    the     court       stated     that    "beyond          imposing      the       statutory
penalty, the circuit court's written orders do not specify in
what     prohibited           debt     collection           practice          [the        creditor]
engaged."         Id.        The court of appeals further noted that the
defendant had "not offered any explanation or defense of the
court's $1,000 statutory damages award."                           Id.        Accordingly, the
court of appeals concluded that the defendant was not entitled
to any relief under Wis. Stat. § 427.105.                          Id.
       ¶25   Thus, like the district court in Beal, the court of
appeals in Kong concluded that the creditor violated ch. 425 by

sending a noncompliant notice of default and right to cure, but
similarly        declined       to     impose       concurrent          ch.    427        liability.
Kong, like Beal, thus stands for the proposition that a failure
to    provide     a     notice    of    default       and    right       to    cure        does    not
destroy      a   creditor's           right    to    enforce        a    debt        in    default.
Therefore, under Beal and Kong, a mere violation of Wis. Stat.
§§ 425.104 and 425.105 does not automatically lead to a Wis.
Stat. § 427.104(1)(j) violation.
       ¶26   Kirsch          relies    on     this   court's        decision         in     Kett   v.
Community        Credit       Plan,     Inc.,    228       Wis. 2d 1,          596    N.W.2d 786
(1999), which also addresses a replevin action, in his attempt
to shoehorn a failure to comply with Wis. Stat. §§ 425.104 and
425.105 into a Wis. Stat. § 427.104 violation.                                Specifically, he
claims that under Kett, courts are to apply a "broad scope to
the kinds of claims that can be litigated under chapter 427."
                                                18
                                                                         No.     2017AP1408



      ¶27    In Kett a creditor brought replevin actions in the

Milwaukee County circuit court against four debtors.                            Kett, 228
Wis. 2d     at   4.        The    circuit    court      initially    granted      default
replevin judgments to the creditor.                  Id.     Based on those default
judgments, the creditor repossessed the debtors' vehicles.                              Id.
After the creditor took possession of the vehicles, the circuit
court vacated the replevin judgments because the actions were
commenced in an improper venue.                    Id.     The debtors filed suit
against the creditor, asserting (1) that the creditor violated
Wis. Stat. § 425.206 by bringing suit in the wrong venue; and
(2) that the creditor violated Wis. Stat. § 427.104(1)(h) and
(1)(j) by repossessing vehicles it knew or should have known it

had   no    right     to    repossess.        Id.    at    4–5.      A   violation      of
§ 425.206 could give rise to damages under Wis. Stat. § 425.305,
whereas a violation of § 427.104 could lead to damages under
Wis. Stat. §§ 427.105 and 425.304.                   Id. at 5, 23–24.           Regarding
the § 427.104 claims, the court of appeals concluded that the
creditor violated both §§ 425.206 and 427.104 as a matter of
law, and this court affirmed.                Id. at 6–7, 23–24, 54.             Regarding
the § 427.104 claim in particular, this court concluded that the
creditor     should        have   known     that   it    would    have   no     right    to
enforce the replevin judgments in Milwaukee County, and thus
that it violated § 427.104 in attempting to do so.                             Id. at 25–
26.
      ¶28    Kett is uninstructive to our analysis because it is
distinguishable        from       this    case     for     two    important      reasons.
First, in Kett, this court was faced with a venue issue, not
                                             19
                                                                        No.    2017AP1408



with a claim that the creditor violated Wis. Stat. §§ 425.104 or
425.105 by failing to provide a notice of default and right to
cure.       A claim of improper venue is not the same as a claim that
a creditor failed to provide a notice of default and right to
cure.       In Kett the debtors in essence claimed that though the

creditor may have had the right to sue them on the loans, the
creditor did not have the right to do so in Milwaukee County.
Therefore, in Kett, the creditor lacked the right to sue in
Milwaukee      County despite         presumably fulfilling the procedural
requirements of §§ 425.104 and 425.105.10                     Kett does not stand
for    the    proposition      that    a   failure    to    provide     a     notice   of
default and right to cure violates Wis. Stat. § 427.104(1)(j).

Here, there is no dispute that the action was commenced in the
proper       venue,    and     this   court's       holding      in    Kett    is   thus
inapposite to this case.
       ¶29     Second,    Kett is     distinguishable         because     it involved
three       replevin   actions    where      the    creditor     actually      obtained
replevin judgments and then physically repossessed the vehicles
before the circuit court vacated the judgments.                          The debtors'
claims      in Kett in large          part    centered      around     the creditor's
"nonjudicial enforcement" of the debts, as described in Wis.
Stat. § 425.206.             While the creditor in Kett engaged in acts
that    went    well     beyond   the      mere    filing   of    an   action,      here,

       10
       Our presumption is based on the fact that the debtors in
Kett v. Community Credit Plan, Inc., 228 Wis. 2d 1, 596
N.W.2d 786 (1999), never claimed that the creditor failed to
provide a notice of default and right to cure.


                                             20
                                                                            No.     2017AP1408



Security voluntarily dismissed its action on a consumer credit
debt prior to obtaining or attempting to enforce any judgment.
Unlike the creditor in Kett, Security did not obtain a judgment

from the circuit court and could not have taken any steps to
repossess any property as the creditor did via replevin in Kett.
Kett's    holding     regarding      Wis.     Stat.        § 427.104      is      limited    to
situations where a replevin judgment is obtained and enforced in
an improper venue.          This court's decision in Kett is materially
distinguishable from this case, and we see no reason to extend
Kett's      limited   holding      to    this           factually     and      procedurally
distinct set of circumstances.
      ¶30    We therefore rely on the WCA's plain language, along

with Beal and Kong, and reject an application of Kett in this
case.    The parties do not dispute that Kirsch took a loan from
Security and agreed to timely pay back the loan with interest
according to the loan agreement.                       Like the debtors in Beal and
Kong, Kirsch does not claim that he timely made all required
payments, nor does he claim that he cured any default.                               Rather,
Kirsch    asserts     the   same     Wis.     Stat.           § 427.104     claim    as     the
debtors in Beal and Kong on the same exact grounds.                                 Like the
courts in Beal and Kong, we conclude that Security's failure to
send a notice of default and right to cure letter was merely a
failure to comply with a procedural requirement that warranted
dismissal of Security's action against Kirsch.                            Such a failure
did not disrupt Security's right to payment from Kirsch as did
the   creditor's      failure   to      sue       in    the    proper     venue     in    Kett.
While    Kirsch   was   entitled        to    dismissal          of   Security's         action
                                             21
                                                               No.     2017AP1408



against him, Kirsch's counterclaims fail to state a claim for
additional relief under § 427.104(1)(j).
                              IV.    CONCLUSION
     ¶31    This court must consider whether a debtor who has been
sued on a consumer credit transaction without first receiving a
notice of right to cure default under Wis. Stats. ch. 425 may
sue the creditor for damages under Wis. Stats. ch. 427, the
Wisconsin Consumer Act.        We conclude that a creditor's failure
to provide such notice does not constitute a sufficient basis
for relief under ch. 427.           As a result, Kirsch's counterclaims
were properly dismissed and we affirm the court of appeals.



     By    the   Court.—The   decision     of   the   court   of     appeals   is
affirmed.
     ¶32    REBECCA FRANK DALLET, J., did not participate.




                                      22
                                                                         No.    2017AP1408.dk


       ¶33    DANIEL     KELLY,        J.      (concurring).              Distinguishing
between cases is about more than interferometry; we don't simply
overlay the specifics of one case on another and pronounce them
distinguished if they imprecisely map each other.                          As law school
professors are wont to say, all cases are distinguishable, if
for no other reason than that they involve different parties.                              A
meaningful distinction, on the other hand, is one in which a

logical hitch prevents the lessons of a prior case from applying
to the one at bar.              Comparing this case to Kett v. Community

Credit      Plan, Inc.1    reveals        no   such hitch.          So     we should       be
governed by Kett, or we should overrule it to the extent it is
inconsistent with our conclusion.                     Either of those options is
better than the one we chose, which was to say that our holding
and    Kett    can   co-exist     without          creating    cognitive        dissonance.
They       cannot.      Because    I     believe       Kett     wrongly        decided   the
application of Wis. Stat. § 427.104, I join all of the court's
opinion except the part addressing that case.

       ¶34    The    question     both      here     and   in    Kett     is     whether    a
creditor trying to collect a debt arising from a consumer credit
transaction engaged in collection practices prohibited by Wis.
Stat.      § 427.104.      In     Kett,     the      debtor     claimed    the     creditor
(Community Credit) filed its claim in a venue other than one
authorized by Wis. Stat. § 421.401(1).                        So, it said, Community
Credit      "[e]ngage[d]    in . . . conduct            which     can     reasonably       be
expected to threaten or harass the customer or a person related


       1   228 Wis. 2d 1, 596 N.W.2d 786 (1999).


                                               1
                                                                              No.   2017AP1408.dk


to the customer . . . ." in violation of § 427.104(1)(h).                                     228
Wis. 2d 1, 24, 596 N.W.2d 786 (1999) (quoting § 427.104(1)(h))
(internal          marks    omitted).        It          also    said       Community     Credit
"[c]laim[ed], or attempt[ed] or threaten[ed] to enforce a right
with knowledge or reason to know that the right does not exist."
Id.    (quoting       § 427.104(1)(j))          (internal         marks       omitted).       The

court of appeals, we noted, "concluded that Community Credit had
a duty to know that Milwaukee County was not the proper venue
and    that       Community    Credit's      filing         of    a    replevin      action    in

Milwaukee County was an attempt to enforce a right it had reason
to    know    did     not    exist."        Id.      at     25.        We    then    said   that

"Community Credit has set forth no reason that persuades this
court       that    the     court    of    appeals         erred      in     concluding     that
Community Credit engaged in prohibited debt collection practices
as a matter of law by attempting to enforce a right it had
reason to know did not exist."                       Id. at 26.              Consequently, we
held       that    Community    Credit     had       violated         §§ 427.104(1)(h)        and

(j),    thereby entitling Kett to damages under                               § 427.105.       So
Kett's lesson is that a procedural mistake——filing in the wrong
venue2——means the creditor had no right that it could enforce
against       the    debtor.        That   is       to    say,    the       right   would   have
existed if the creditor had filed in the correct venue, but
filing in the wrong venue eliminated the right.




       2
       State v. Dombrowski, 44 Wis. 2d 486, 502, 171 N.W.2d 349
(1969) (citing Black's Law Dictionary (4th ed.), 'venue' pp.
1727, 1728 ("[Venue] is a matter of procedure[.]").


                                                2
                                                                          No.   2017AP1408.dk


      ¶35    Here,       as    in     Kett,      the    error    giving     rise     to    Mr.
Kirsch's     claim       was     procedural.             Specifically,          he   claimed
Security     Finance          filed      its     collection      action    without        first
giving him written notice of his right to cure the default, as
required by Wis. Stat. § 425.104(1).                      Our statutes provide that,
if the creditor doesn't give that notice, it may not file the
collection        action:           "A    merchant      may     not . . . commence         any
action . . . unless the merchant believes the customer to be in
default (s. 425.103), and then only upon the expiration of 15

days after a notice is given pursuant to s. 425.104 . . . ."
Wis. Stat. § 425.105(1)                   As in Kett, Mr. Kirsch claims this

failure meant Security Finance lacked a right capable of being
enforced     by    the    complaint.              Therefore,      he   argued,       it   must
necessarily        follow       that       Security      Finance       "[c]laim[ed],        or
attempt[ed] or threaten[ed] to enforce a right with knowledge or
reason to know that the right does not exist" in violation of
§ 427.104(1)(j).          We disagreed with Mr. Kirsch, and rightly so,

because "[t]he word 'right' refers to the rights . . . contained
in   the    loan    agreement.           It    appears    undisputed       that      Security
sought to enforce the loan agreement, a 'right,' to enforce the
unpaid     loan    obligation            after    default."        Majority      op.,     ¶15.
Consequently, Security Finance undoubtedly had a "right" within
the meaning of § 427.104(1)(j) when it filed its complaint, even
though the filing was premature.
      ¶36    So here is the problem.                   We held in this case that the
"right" identified in Wis. Stat. § 427.104(1)(j) is a contract
right, and it doesn't go away just because the creditor fails to

                                                 3
                                                                                 No.    2017AP1408.dk


follow the proper procedure in bringing its enforcement action.
Majority op., ¶¶2, 31 ("[A] creditor's failure to provide such
notice does not constitute a sufficient basis for relief under
ch.    427.").        But      in Kett we           said otherwise.                We    said that

Community Credit's failure to file its action in the correct
venue meant it was trying to enforce a right it did not have.
That     can    only      be     true        if:       (1)        the     "right"        to   which
§ 427.104(1)(j) refers is the right to file the suit, not a
contract       right;     or    (2)     a    procedural           error    can     extinguish       a

contract       right.          The    first        possibility           conflicts        with    our
holding today because we explicitly said that the statutory term
"right" refers to a contract right.                       The second possibility also
conflicts       with      our    holding           because        we    said      that     Security
Finance's       procedural           error    did      not     extinguish          its     contract
right.         So    § 427.104(1)(j)           either        penalizes         a       procedurally
flawed complaint (Kett), or it doesn't (Security Finance).                                        Both

propositions cannot be true simultaneously.

       ¶37     But the court tries.                In an attempt to distinguish the
two cases, it says "[a] claim of improper venue is not the same
as a claim that a creditor failed to provide a notice of default
and right to cure."                  Majority op., ¶28.                  Yes, that is true——
proper venue is not the same thing as proper notice.                                     The former
governs where the suit may be filed.                         The latter governs whether
it may be filed at all.                But nothing in the opinion explains why
Wis.    Stat.       § 427.104(1)(j)          applies      to       one    of     the     procedural
errors    but       not   the    other.             And      if    this     is     a     matter    of
comparative gradation, I should think that filing a premature

                                                   4
                                                                     No.   2017AP1408.dk


complaint is a significantly more egregious error than filing a
timely complaint in the wrong county.

       ¶38      The court also believes it can distinguish Kett on the
ground that Community Credit used the judgments obtained in the
wrong venue to repossess collateral that had secured the loans.
It says "[t]he debtors' claims in Kett in large part centered
around the creditor's 'nonjudicial enforcement' of the debts, as
described in Wis. Stat. § 425.206."                   Majority op., ¶29.            True
enough——that's where the debtors focused.                   But the court focused

on the improper venue chosen by the creditor.                   We said the court
of    appeals     reached   the     correct      conclusion     in    deciding      that
"Community Credit had a duty to know that Milwaukee County was
not the proper venue and that Community Credit's filing of a
replevin action in Milwaukee County was an attempt to enforce a
right      it   had   reason   to    know       did   not   exist."         Kett,    228
Wis. 2d at 25.          The debtors may have been interested in the
collateral, but we were interested in the venue.3                      This is not a

basis for distinguishing the cases.
       ¶39      I think the court's opinion today correctly analyzes
the     relationship     between     procedural        errors    and       Wis.   Stat.
§ 427.104(1)(j).        But I don't think that reasoning can co-exist

       3
       So was the court of appeals. It said the creditor "had a
duty to know that Milwaukee County was not the proper place of
trial," and "[a]s the creditor, it is in a much better position
than the customer to investigate matters such as appropriate
venue."   Kett v. Community Credit Plan, Inc., 222 Wis. 2d 117,
135, 586 N.W.2d 68 (Ct. App. 1998).        So it concluded the
creditor had reason to know that it was enforcing a right it did
not have in violation of Wis. Stat. § 427.104(1)(j).      Id. at
134.


                                            5
                                                       No.   2017AP1408.dk


with Kett.   So I would overrule Kett to the extent it holds that
a creditor who files an enforcement action in the wrong venue
violates   § 427.104(1)(j).   I   join   all   other   aspects   of   the
court's opinion.
     ¶40   I am authorized to state that Justice REBECCA GRASSL
BRADLEY joins this concurrence.




                                  6
                                                                      No.    2017AP1408.awb


       ¶41    ANN    WALSH BRADLEY,         J.       (dissenting).          An    imbalance
occurs when the middle class, the poor and the powerless are
held accountable while the monied and powerful are able to act
with impunity.         The Wisconsin Legislature tried to address such
an imbalance when in 1971 it enacted the Wisconsin Consumer Act
(WCA).
       ¶42    Heralded        as    "the      most      sweeping      consumer       credit
legislation         [then]     enacted      in     any     state,"     its       intent    is
"clearly . . . to            assist     customers,         particularly          those     of

limited means, in combating unfair business practices."                             Kett v.

Community      Credit       Plan,     Inc.,       228    Wis. 2d 1,    ¶31       n.15,    596
N.W.2d 786         (1999)     (citations       omitted).        To     that       end,    the
legislature mandated that if a debt collector gives the consumer
a notice with an opportunity to cure a default, then the notice
must fulfill certain criteria lest the debt collector not obtain
the right to "go to court."
       ¶43    When Security Finance tried to collect a $1000 debt

from       Brian    Kirsch,    it     did     so   after     violating       this    notice
provision of the WCA.1              Specifically, it did not provide Kirsch
with a statutorily-compliant notice of right to cure.
       ¶44    Nevertheless, the majority pardons Security Finance's
error and allows it to escape accountability for putting Kirsch

       1
       For purposes of our review, we accept the allegations of
Kirsch's counterclaims as true.    See Hausman v. St. Croix Care
Center, 214 Wis. 2d 655, ¶10, 571 N.W.2d 393 (1997).    Security
Finance appears to argue in its brief that if any mistake was
made with the notice of right to cure, that it was de minimis.
Nevertheless, in response to Kirsch's counterclaims, Security
Finance voluntarily dismissed its complaint.


                                              1
                                                                       No.   2017AP1408.awb


through a lawsuit that should never have been filed.                                  In so
doing, it arrives at a determination that is irreconcilable with
the language of Kirsch's loan agreement and our case law.
       ¶45      The majority's conclusion also flies in the face of
the stated purpose of the WCA, which "was designed to protect
consumers           from   unfair,   deceptive,      and unconscionable          merchant
practices . . . ."             Credit Acceptance Corp. v. Kong, 2012 WI App

98, ¶8, 344 Wis. 2d 259, 822 N.W.2d 506.                        Instead, the majority
creates         a     perverse    incentive        for   debt    collectors       to    sue

consumers without providing the proper notice and right to cure.
Many defendants will not fight back,2 and when they do the suit
will       be       simply    dismissed      without     prejudice      and     the    debt
collector allowed to refile with absolutely no consequence.3
       ¶46      Unlike the majority, I would give the WCA the teeth
the    legislature           intended   it   to    have.    In    my    view,    Security
Finance's attempt to enforce a right with reason to know that
the right did not exist constitutes a violation of Wis. Stat.

       2
       See Mary Spector, Debts, Defaults, and Details: Exploring
the Impact of Debt Collection Litigation on Consumers and
Courts, 6 Va. L. & Bus. Rev. 257, 271-72 (2011) ("While the
rules vary by state, and even within states, one thing is clear:
the rate of default judgments in consumer debt collection cases
is reported to have reached 95% and may be double the default
judgment rate in debt cases generally.").
       3
       As amicus Legal Aid Society of Milwaukee details, even a
dismissed lawsuit can have decidedly negative consequences for a
consumer.   The record of a dismissed suit is still publicly
available on CCAP, "an internet accessible case management
system provided by Wisconsin Circuit Court Access program." See
State v. Wayerski, 2019 WI 11, ¶20 n.10, 385 Wis. 2d 344, 922
N.W.2d 468.     Such information is available to potential
employers, landlords, and the public at large.


                                               2
                                                                  No.   2017AP1408.awb


§ 427.104(1)(j).4           Specifically, Security Finance attempted to
enforce a right to go to court to obtain a judgment despite
reason to know that absent compliance with the notice provisions
of the WCA, such a right did not exist.
      ¶47    The majority errs in determining that Kirsch fails to
state a claim against Security Finance for violation of Wis.
Stat.      § 427.104(1)(j).           This    erroneous      determination          is
inconsistent with the parties' loan agreement, our case law and
the     legislature's        stated   purposes       in    enacting       the    WCA.

Accordingly, I respectfully dissent.
                                         I
      ¶48    Kirsch    entered    into   a    consumer     loan    agreement     with
Security Finance whereby Security Finance loaned Kirsch $1,000.
Majority op., ¶3.           Subsequently, Security Finance alleged that
Kirsch defaulted on the loan and brought a small claims action
against     him.      Id.     However,   it    did   so    without      providing    a

statutorily compliant notice of right to cure default pursuant

to Wis. Stat. §§ 425.1045 and 425.105.6              Id.



      4Wisconsin Stat. § 427.104(1)(j) provides in relevant part:
"In attempting to collect an alleged debt arising from a
consumer credit transaction or other consumer transaction,
. . . a debt collector may not: . . . [c]laim, or attempt or
threaten to enforce a right with knowledge or reason to know
that the right does not exist . . . ."
      5   Wisconsin Stat. § 425.104 sets forth:

      (1) A merchant who believes that a customer is in
      default may give the customer written notice of the
      alleged default and, if applicable, of the customer's
      right to cure any such default (s. 425.105).

                                                                        (continued)
                                         3
                                                                     No.   2017AP1408.awb


     ¶49     Kirsch filed counterclaims against Security Finance,
arguing that under the WCA it "has no right to file an action
without     first    serving      a   sufficient       notice   of    right    to    cure
default."     Id.     Accordingly, based on this violation, he sought

damages pursuant to the WCA.            See id.
     ¶50     Security Finance voluntarily dismissed its complaint
and moved to dismiss Kirsch's counterclaims.                     The circuit court
granted the motion and the court of appeals affirmed.                         Id., ¶¶4-
5.       Upholding    the    dismissal     of    Kirsch's       counterclaims,        the

majority determines that a debt collector's failure to provide a
proper notice of right to cure default "does not constitute a
sufficient     basis        for   relief       under    ch.     427."         Id.,   ¶2.


     (2) Any notice given under this section shall contain
     the name, address and telephone number of the
     creditor, a brief identification of the consumer
     credit transaction, a statement of the nature of the
     alleged default and a clear statement of the total
     payment, including an itemization of any delinquency
     charges, or other performance necessary to cure the
     alleged default, the exact date by which the amount
     must be paid or performance tendered and the name,
     address and telephone number of the person to whom any
     payment must be made, if other than the creditor.
     6   Pursuant to Wis. Stat. § 425.105(1),

     A merchant may not accelerate the maturity of a
     consumer credit transaction, commence any action
     except as provided in s. 425.205(6), or demand or take
     possession of collateral or goods subject to a
     consumer lease other than by accepting a voluntary
     surrender thereof (s. 425.204), unless the merchant
     believes the customer to be in default (s. 425.103),
     and then only upon the expiration of 15 days after a
     notice is given pursuant to s. 425.104 if the customer
     has the right to cure under this section.


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Specifically, in the majority's view Security Finance was not
attempting to "enforce a right with knowledge or reason to know
that the right does not exist" within the meaning of Wis. Stat.
§ 427.104(1)(j).         Id., ¶14.        Instead, it opines that the right

that Security Finance was enforcing was the right to collect an
unpaid balance on a loan.           Id.
                                              II
     ¶51    The majority begins its analysis on the wrong foot
when it misclassifies the "right" Security Finance is attempting

to enforce.        This initial misstep creates a skewed focus from
which the majority opinion does not recover.
     ¶52    Wisconsin        Stat.        § 427.104(1)(j)              prohibits        debt
collectors from "[c]laim[ing], or attempt[ing] or threaten[ing]
to enforce a right with knowledge or reason to know that the
right    does    not    exist."7         It       is   of    critical     importance      to
correctly       identify     the     "right"            at     issue      because       such
identification frames the entirety of the analysis.

     ¶53    I    begin     with    the    plain        language    of         the   parties'
consumer    loan       agreement.        Under         the   heading,         "RIGHTS   UPON
DEFAULT," the parties' loan agreement provides as follows:

     If you default and, after we send you a notice and
     opportunity to cure if required by § 425.105 Wis.
     Stats., we shall have the right to go to court and, to


     7 Violation of this subsection not only entitles the
consumer to the statutory penalties provided by Wis. Stat.
§ 425.304, but also allows the consumer to recover "damages
caused by emotional distress or mental anguish with or without
accompanying   physical injury   proximately  caused  by"  the
violation. Wis. Stat. § 427.105(1).


                                              5
                                                                             No.    2017AP1408.awb

       the extent permitted by law, obtain a judgment against
       you for the then unpaid amount of your debt.
       ¶54    This language is unambiguous.                      It indicates that the
"right" identified is not simply the right to collect the unpaid
balance      on       the    loan,   as     the       majority    determines,           but    the
specific right "to go to court" to "obtain a judgment against"

Kirsch.
       ¶55    Importantly, the right to go to court is a right that
can be relinquished by contract,8 and it is distinct from the
underlying right to the unpaid balance of the loan in the event
of a default.               That is, the right to collect the unpaid loan
balance is separate from the right to a particular forum for
dispute resolution.
       ¶56    Security Finance had reason to know that it had no

"right to go to court" to "obtain a judgment against" Kirsch
because it did not satisfy the notice requirements set forth in
Wis.       Stat.      §§ 425.104      and    425.105        and        the    parties'        loan
agreement.         Under the WCA and the parties' loan agreement, the
existence        of    Security      Finance's         "right     to    go     to     court"    to
"obtain      a     judgment      against"         Kirsch    depended           upon     Security
Finance sending statutorily-compliant notice and opportunity to
cure default to Kirsch.               As the majority acknowledges, Security



       8
       For example, parties may contract to resolve disputes in
arbitration as opposed to a court.     See, e.g., J.J. Andrews,
Inc. v. Midland, 164 Wis. 2d 215, 223-24, 474 N.W.2d 756 (Ct.
App. 1991) ("The purpose of arbitration is to obtain a speedy,
inexpensive and final resolution of disputes, and thereby avoid
the expense and delay of a protracted court battle.") (citations
omitted).


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                                                                   No.   2017AP1408.awb


Finance failed to do so.                 In the majority's words, Security
Finance "jumped the gun."            See majority op., ¶14.

       ¶57    Nevertheless,        Security      Finance    went    to   court    in   a
premature attempt to obtain a judgment against Kirsch.                          This is
a quintessential example of attempting to enforce a right that
does not exist in violation of Wis. Stat. § 427.104(1)(j).
       ¶58    Not only does the majority's conclusion contravene the
language of the loan agreement, but it also is inconsistent with
our case law, specifically Kett, 228 Wis. 2d 1.                            In Kett, a

creditor filed replevin actions against consumers in Milwaukee
County Circuit Court and obtained default judgments.                           Id., ¶3.
However, Milwaukee County was not the proper venue under the
WCA.    Id.    Subsequently, the creditor repossessed the consumers'
vehicles by nonjudicial recovery based upon the invalid default
replevin judgments.         Id.
       ¶59    The    consumers brought           separate   lawsuits     in    Waukesha
and    Walworth      Counties     against       the   creditor     for   its    alleged

violations of the WCA.            Id., ¶2.       Each included allegations that
the creditor had engaged in prohibited debt collection practices
within the meaning of Wis. Stat. § 427.104(1)(j).                    Id., ¶¶4, 7.
       ¶60    This court concluded that the consumers had stated a
valid claim.         It reasoned that creditors do not have a right to
file    suit        when   they     have        not   complied      with      necessary
preconditions        set   forth    in     the    WCA.      Id.,   ¶¶43-50.        More
specifically, the creditor in Kett had reason to know that it
had no right to pursue a replevin default judgment in Milwaukee
County.       Id., ¶50.     Nevertheless, it obtained default judgments

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                                                                    No.   2017AP1408.awb


in the wrong venue and enforced them by nonjudicial recovery.
Id., ¶16.

      ¶61    I     find    the   majority's    attempt      to   distinguish       Kett
unconvincing, and instead conclude that Kett's reasoning applies
in this case.        Like the creditor in Kett that had reason to know
it   had    no     right    to   venue   its   actions   in      Milwaukee       County,
Security Finance had reason to know it had no "right to go to
court" to "obtain a judgment against" Kirsch until it provided
notice      that    complied      with   the   WCA    and     the     parties'      loan

agreement.         By prematurely filing suit without providing that
notice, Security Finance attempted to enforce a right it had
reason      to   know      did   not   exist   in    violation       of   Wis.    Stat.
§ 427.104(1)(j).9




      9This line of analysis was adopted by the federal district
court in a case with facts very similar to those we address
here.   In Satran v. LVNV Funding, LLC, No. 17-cv-896-JDP, 2018
WL 2464486, at *1 (W.D. Wis. June 1, 2018), as in this case, the
consumer alleged that the creditor commenced suit against the
consumer without first providing the statutory notice of right
to cure default, and in so doing, the creditor violated Wis.
Stat. § 427.104(1)(j).

     Framing the question as "whether a creditor has the 'right'
to sue a debtor when it has not given notice of the right to
cure default as required by section 425.105[,]" the district
court determined that the consumer stated a claim.    Id. at *4,
6.   It arrived at its conclusion by applying Kett, explaining
that "Kett simply held that creditors do not have a right to
file suit when they haven't complied with a provision of the
WCA." Id. at *6.

                                                                          (continued)
                                           8
                                                      No.     2017AP1408.awb


     ¶62    Unlike the majority, I would follow Kett and the plain

language    of   the   parties'   loan   agreement.    Accordingly,       I
conclude that Kirsch stated a claim against Security Finance for
violation of Wis. Stat. § 427.104(1)(j).
                                   III
     ¶63    In addition to being inconsistent with Kirsch's loan
agreement and our case law, the majority opinion is likewise
inconsistent with the purpose of the WCA.
     ¶64    As   amicus   Legal    Action    of   Wisconsin      correctly

emphasizes, the WCA was intended to be a "sea-change" in the
law.10    The legislature's expressly stated purposes for enacting
the WCA include protecting consumers "against unfair, deceptive,
false,      misleading     and    unconscionable      practices"        and
"encourag[ing] the development of fair and economically sound



     Further, the district court observed that under the same
framework espoused by the majority here, "courts would have to
determine whether each provision of the WCA affects a creditor's
right to file suit or merely provides the debtor with a complete
defense once the creditor does file suit."    Id.   I agree with
the district court that the WCA "does not allow for this
distinction." Id.
     10 See Ch. 239, Laws of 1971. For insightful commentary on
the history of consumer protection law in Wisconsin and the
drafting of the Wisconsin Consumer Act, see generally James D.
Jeffries, Protection for Consumers Against Unfair and Deceptive
Businesses, 57 Marq. L. Rev. 559 (1974); Thomas D. Crandall, The
Wisconsin Consumer Act: Wisconsin Consumer Credit Laws before
and after, 1973 Wis. L. Rev. 334 (1973); Edward J. Heiser Jr.,
Wisconsin Consumer Act:     A Critical Analysis, 57 Marq. L.
Rev. 389 (1974); and Jeffrey Davis, Legislative Restriction of
Creditor Powers and Remedies: A Case Study of the Negotiation
and Drafting of the Wisconsin Consumer Act, 72 Mich. L. Rev. 3
(1973).


                                    9
                                                                             No.    2017AP1408.awb


consumer      practices          in    consumer        transactions."               Wis.        Stat.
§ 421.102(2)(b)-(c).               At the time it was enacted, the WCA went
"further      to    protect        consumer      interests          than     any     other      such
legislation         in    the    country,"        and       was     considered        "the      most
sweeping      consumer       credit          legislation          [then]     enacted       in    any
state."      Kett, 228 Wis. 2d 1, ¶31 n.15 (citations omitted).

      ¶65     Accordingly,             the     legislature           directed        courts       to
"liberally         construe[]"         the     WCA     to     promote       its      "underlying
purposes      and         policies."            Wis.     Stat.           § 421.102(1).            In

particular,         the    legislature          provided          that     consumer       remedies
should be "liberally administered to the end that the customer
as   the    aggrieved party             shall    be     put    in at        least    as    good     a
position as if the creditor had fully complied with [the WCA]."
Wis. Stat. § 425.301(1).
      ¶66     Further,          "[a]    basic     purpose           of    the      remedies      the
legislature adopted in the Wisconsin Consumer Act is to induce
compliance with the Wisconsin Consumer Act and thereby promote

its underlying objects."                     Kett, 228 Wis. 2d 1, ¶36 (internal
quotations         and    citation       omitted).            As    a     corollary       to    this
principle, without the threat of a WCA remedy, a debt collector
has no incentive to comply with its provisions.
      ¶67     Disregarding            the    legislature's           stated        purpose,      the
majority allows Security Finance to escape accountability for
its violation of the WCA.                    With impunity, Security Finance has
put Kirsch through a lawsuit that it had no right to bring.                                       By
being forced to vigorously defend Security Finance's defective
suit,      Kirsch    is     most      certainly       not     "in    at    least     as    good     a

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                                                                       No.    2017AP1408.awb


position as if the creditor had fully complied with" the WCA.
See Wis. Stat. § 425.301(1).

      ¶68     Simply dismissing the suit without prejudice provides
no inducement to compliance with the WCA.                         See id.     From a debt
collector's            perspective,     why    not        file    a    lawsuit     without
providing the proper notice and right to cure?                          Often consumers
will not respond.11            In the rare instance when a consumer does
fight back, the suit will simply be dismissed without prejudice
and   the    debt collector           free to refile without             suffering any

consequence.
      ¶69     In sum, I conclude that Kirsch stated a claim against
Security Finance for engaging in a prohibited debt collection
practice          in     violation      of         Wis.     Stat.      § 427.104(1)(j).
Specifically, Security Finance attempted to enforce a right it
had reason to know did not exist by attempting to exercise its
"right to go to court" to "obtain a judgment against" Kirsch
before      providing       proper    notice       of     right   to   cure    default   as

required by the WCA and the parties' consumer loan agreement.
      ¶70     For the reasons stated above, I respectfully dissent.
      ¶71     I    am     authorized    to     state       that   Justice     SHIRLEY    S.
ABRAHAMSON joins this dissent.




      11   See n.2, supra.


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