Security Finance v. Brian Kirsch

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(2018 – unpublished)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unpublished decision of the court of appeals, Security Finance
v. Kirsch, No. 2017AP1408, unpublished slip op.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

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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).

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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).

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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.

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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

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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. . . ."

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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").

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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
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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.
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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.

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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),

4
No. 2017AP1408.awb

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).

6
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

7
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).

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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.