2013 WI 49
SUPREME COURT OF WISCONSIN
CASE NO.: 2011AP1121
COMPLETE TITLE: Paul Davis Restoration of S.E. Wisconsin, Inc.,
Plaintiff-Respondent-Petitioner,
v.
Paul Davis Restoration of Northeast Wisconsin,
Defendant-Appellant,
Denmark State Bank,
Garnishee.
REVIEW OF A DECISION OF THE COURT OF APPEALS
Reported at 343 Wis. 2d 678, 819 N.W.2d 562
(Ct. App. – Unpublished)
OPINION FILED: June 4, 2013
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: March 14, 2013
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Brown
JUDGE: Donald R. Zuidmulder
JUSTICES:
CONCURRED: ROGGENSACK, ZIEGLER, J.J., concur.
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
For the plaintiff-respondent-petitioner, there were briefs
by Adam A. Bardosy and Sean D. Lanphier, and Mallery &
Zimmerman, S.C., Milwaukee, with oral argument by Adam A.
Bardosy.
For the defendant-appellant, the cause was argued by
Natalie M. Sturicz, with whom on the brief was Robert E. Bellin,
Jr.
2013 WI 49
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2011AP1121
(L.C. No. 2010TJ154)
STATE OF WISCONSIN : IN SUPREME COURT
Paul Davis Restoration of S.E. Wisconsin, Inc.,
Plaintiff-Respondent-Petitioner,
v. FILED
Paul Davis Restoration of Northeast Wisconsin,
JUN 4, 2013
Defendant-Appellant
Diane M. Fremgen
Clerk of Supreme Court
and
Denmark State Bank,
Garnishee.
REVIEW of a decision of the Court of Appeals. Reversed and
cause remanded.
¶1 N. PATRICK CROOKS, J. This case centers on a
garnishment action in which the alleged judgment debtor
challenged the ability of the judgment creditor to enforce a
judgment by garnishment. The case arises from territory-related
disputes between two franchisees, Paul Davis Restoration of S.E.
Wisconsin, Inc. (Southeast) and Paul Davis Restoration of
Northeast Wisconsin (Northeast). Pursuant to the franchise
No. 2011AP1121
agreement, binding arbitration is prescribed to resolve such
disputes, and the results of an arbitration process included an
award for Southeast in the amount of $101,693 against Northeast,
which is the name under which EA Green Bay, LLC, does business.
The problem we now address arose when Southeast sought to
enforce a judgment, via a garnishment action under Wis. Stat.
§ 812.01 (2009-10)1, for the money damages it had been awarded by
the arbitration panel.
¶2 Following the arbitration, there was no objection to
confirming the award by entry of judgment against Northeast in
circuit court.2 Nor has there been any dispute that Northeast
1
All subsequent references to the Wisconsin Statutes are to
the 2009-10 version unless otherwise indicated.
2
There was a dispute in proceedings in Milwaukee County
Circuit Court, before the Honorable William S. Pocan, concerning
"the appropriate form of the judgment confirming the award." At
a hearing related to that dispute, Southeast's counsel expressed
concern that a judgment naming only Northeast, EA Green Bay,
LLC's "d/b/a" name, might be unenforceable and sought to have
the judgment entered against Northeast, Matthew Everett and EA
Green Bay, LLC, on the basis that the franchise agreement
contemplated joint and several liability in such a circumstance.
In asking the court to confirm the arbitration award against
Northeast but not also against EA Green Bay, LLC, Northeast's
counsel made the following statement:
[T]his business about all this hypothetical difficulty
that [Southeast] may or may not encounter in enforcing
the judgment is not appropriate in this particular
proceeding, number one. It's not supported by any
evidence, number two. . . . And thirdly, the idea
that as a matter of law an entity operating as a quote
[d/b/a], meaning it's operating under a trade name,
the idea that a judgment can't be enforced against it
is simply untrue as a matter of law.
2
No. 2011AP1121
was the name under which EA Green Bay, LLC, did business.
Nevertheless, EA Green Bay, LLC, opposed the subsequent
garnishment action in circuit court on the grounds that the
judgment, entered against only Northeast, the name under which
it did business, was unenforceable.
¶3 The circuit court for Brown County, the Honorable
Donald R. Zuidmulder presiding, relied on two Wisconsin cases3
for the proposition that Northeast, the name under which EA
Green Bay, LLC, did business, had "no independent legal
significance apart from the underlying business" and applied
that principle in this context to mean that the names "refer to
the same legal entity." It therefore held that any valid
judgment against Northeast is also enforceable against EA Green
Bay, LLC. The court of appeals reversed. It cited to the same
cases as the circuit court, stating that where a company does
business under a name different from the legal entity's name,
that name is "merely descriptive of" and "not . . . distinct
from" the person or corporation operating the business and is "a
The circuit court, for reasons that cannot be determined on the
record before us, did as Northeast requested and confirmed the
award on August 18, 2010, as to Northeast in the amount of the
arbitration award, $101,693, and entered judgment on September
3, 2010.
3
Jacob v. West Bend Mut. Ins. Co., 203 Wis. 2d 524, 537
n.7, 553 N.W.2d 800 (Ct. App. 1996) (stating that the
designation "'d/b/a' means 'doing business as' and is merely
descriptive of the person or corporation who does business under
some other name; it does not create or constitute an entity
distinct from the person operating the business"); and Binon v.
Great N. Ins. Co., 218 Wis. 2d 26, 35, 580 N.W.2d 370 (Ct. App.
1998) (citing the language from Jacob).
3
No. 2011AP1121
legal nonentity"; it therefore reasoned that a judgment against
such a name is unenforceable and cannot serve as a basis for a
garnishment action.4
¶4 Wisconsin courts have not directly addressed the
precise question presented: whether an otherwise valid judgment
can be enforced against a legal entity when the judgment is
entered against the name under which the legal entity does
business.5 The cases relied on by the circuit court and court of
appeals state that when a person or corporation does business
under a name, that name "is merely descriptive of the person or
corporation" and "it does not create or constitute an entity
distinct from the person operating the business." Jacob v. West
Bend Mut. Ins. Co., 203 Wis. 2d 524, 537 n.7, 553 N.W.2d 800
(Ct. App. 1996). In Capsavage v. Esser, 224 Wis. 2d 404, 415,
591 N.W.2d 888 (Ct. App. 1999), which involved a dispute
concerning the type of legal entity involved, the court
clarified that the name under which the company, Sundance
4
Paul Davis Restoration of S.E. Wis., Inc. v. Paul Davis
Restoration of Northeast Wis., No. 2011AP1121, unpublished slip
op., ¶¶7-9 (Wis. Ct. App. June 12, 2012).
5
When deciding a duty-to-defend case that did not present
this question directly, the court of appeals noted, "We are not
required to decide in this case whether the default judgment
against [an entity named in the complaint], a legal nonentity,
is of any enforceable effect against the estate of [its deceased
owner, who was not personally named as a defendant]." Jacob,
203 Wis. 2d at 537 n.7 (emphasis added). In that case, a
separate ruling from a probate court dismissing a related claim
on the basis of the unenforceability of the judgment was not
before the court. Id. at 531.
4
No. 2011AP1121
Marine, was doing business was not "a distinct entity" but
rather was "simply another way to refer to Sundance Marine."6
¶5 It follows from this principle that if the name under
which a person or corporation does business is "simply another
way to refer to" a single legal entity and constitutes no entity
distinct from the person or corporation who does business, then
a judgment against the "doing business as" or "d/b/a" name is
enforceable against the legal entity from which it is
indistinct. This result is consistent with the approach taken
on this question by the majority of other jurisdictions that
have addressed it. Based on this principle in Wisconsin case
law concerning a d/b/a designation or trade name, and consistent
with the approaches of the majority of other jurisdictions, we
hold that the judgment against EA Green Bay LLC's d/b/a
6
The Capsavage court made note of the fact that California-
based Sundance Marine had made a fictitious name filing or d/b/a
filing "to do business as SDSR." Capsavage v. Esser, 224 Wis.
2d 404, 415, 591 N.W.2d 888 (Ct. App. 1999).
[T]he purpose of a fictitious name statute is to
protect the public against false identification of the
character of a business by use of certain words in the
name employed by the enterprise, or to ensure that
those who do business with persons operating under a
fictitious name will know the true identities of the
individuals with whom they are dealing or to whom they
are giving credit or becoming bound. . . . By filing
an assumed-name certificate as authorized by statute,
a corporation puts the public on notice that it is
doing business under an assumed name . . . .
18A Am. Jur. 2d Corporations § 237.
5
No. 2011AP1121
designation, Paul Davis Restoration of Northeast Wisconsin, is
enforceable against EA Green Bay, LLC, and the account at
Denmark State Bank; Northeast and EA Green Bay, LLC, are not two
distinct legal entities; and EA Green Bay, LLC, was undisputedly
doing business under the name Northeast. We reverse the
decision of the court of appeals and remand to the circuit court
for further proceedings consistent with this opinion.
I. BACKGROUND
¶6 After the arbitration proceedings described above were
complete and the judgment was entered in Milwaukee County
Circuit Court, Northeast refused to pay the arbitration award.
Southeast commenced the action that is now before us, a separate
and independent garnishment action in Brown County Circuit
Court, to collect the judgment from a Denmark State Bank account
titled in the name of "EA Green Bay LLC d/b/a Paul Davis
Restoration & Remodeling of NE WI d/b/a Building Werks." The
record7 reflects that the checks on the account bear only the
name "Paul Davis Restoration & Remodeling of NE WI." In its
answer to the garnishment complaint, garnishee defendant Denmark
State Bank stated that "EA Green Bay LLC d/b/a Paul Davis
7
The record we have is the record from the garnishment
action filed in Brown County Circuit Court. The record in this
case does not include the arbitration ruling or any documents
from the arbitration proceedings. It does not contain the
record from the Milwaukee County Circuit Court case confirming
the arbitration award either, though portions of the record in
that case, such as briefs and partial transcripts, have been
included in the garnishment case record as exhibits attached to
filings.
6
No. 2011AP1121
Restoration & Remodeling of NE WI d/b/a Building Werks is a
Denmark State Bank customer.” It also stated that
[a]s of the date and time Denmark State Bank was
served with the Garnishment Summons and Complaint,
Denmark State Bank was indebted to EA Green Bay LLC
d/b/a Paul Davis Restoration & Remodeling of NE WI
d/b/a Building Werks in the full amount of the
. . . garnishment, by virtue of a deposit account.
In its ruling, the circuit court stated, "It cannot be disputed
that EA [Green Bay, LLC] was the principal name on the account
on [the date of the service of the garnishee summons] and that
it was EA [Green Bay, LLC]'s Employer Identification Number."
It also noted that "checks continued to be deposited for Paul
Davis Restoration of Northeast Wisconsin . . . ."
¶7 The Brown County Circuit Court denied Northeast's
motion to dismiss and directed the bank to release the funds in
the account to Southeast. As noted above, the court based the
ruling on the Jacob and Binon cases and on its determination
that "[r]ather than separating the [Northeast] non-entity from
the 'EA Green Bay, LLC' legal entity, the d/b/a designation
simply means that the two names refer to the same legal entity."
It considered EA Green Bay, LLC's arguments an "attempt[] to
create a legal distinction where none exists."
¶8 The court of appeals reversed in an unpublished, per
curiam opinion. It read the Jacob and Binon cases as supporting
the proposition that because a d/b/a designation "does not
create or constitute an entity distinct from the person [or
corporation] operating the business," a judgment against a d/b/a
designee alone is unenforceable. Paul Davis Restoration of S.E.
7
No. 2011AP1121
Wis., Inc. v. Paul Davis Restoration of Northeast Wis., No.
2011AP1121, unpublished slip op., ¶¶7-9 (Wis. Ct. App. June 12,
2012). It drew parallels to the facts discussed in Jacob, in
which the court found that a plaintiff had improperly named a
deceased person, rather than the estate's personal
representative, as a party to the suit. Id. Southeast
petitioned this court for review, which we granted.
II. STANDARD OF REVIEW AND APPLICABLE LAW
¶9 The question presented here arises in the context of a
garnishment action, which is governed by Wis. Stat. § 812.01.
The statute states:
Any creditor may proceed against any person who is
indebted to or has any property in his or her
possession or under his or her control belonging to
such creditor's debtor or which is subject to
satisfaction of an obligation described under s.
766.55(2), as prescribed in this subchapter.
"Plaintiff" as used in this subchapter includes a
judgment creditor and "defendant", a judgment debtor
or the spouse or former spouse of a judgment debtor if
the judgment is rendered in connection with an
obligation described under s. 766.55(2).
Wis. Stat. § 812.01(1). Application of a statute to an
undisputed set of facts is a question of law. Nichols v.
Nichols, 162 Wis. 2d 96, 103, 469 N.W.2d 619 (1991).
¶10 We also note that it is well established that a
garnishment action is an action independent of the judgment for
which it seeks to recover payment and is instituted separately
according to statute. See Wis. Stat. § 812.01. See Butler v.
Polk, 592 F.2d 1293, 1295-1296 (5th Cir. 1979) (observing that
"garnishment actions against third-parties are generally
8
No. 2011AP1121
construed as independent suits, at least in relation to the
primary action"); Randolph v. Emp'rs Mut. Liab. Ins. Co. of
Wis., 260 F.2d 461, 464 (8th Cir. 1958) ("The only issue is the
liability of the garnishee on its insurance contract. . . .
[T]he amount of such liability has been established by the
judgment against [the insured] in the state court action.");
Adriaenssens v. Allstate Ins. Co., 258 F.2d 888, 890 (10th Cir.
1958) (garnishments are "original and independent actions [by]
the holders of the judgments").
¶11 Noting, in the context of a garnishment case, that
"[t]he judgment carries the presumption of validity," this court
cited the settled law on judgments:
The general rule is stated in 49 C.J.S.
Judgments . . . as follows: "A judgment rendered by a
court having jurisdiction of the parties and the
subject matter, unless reversed or annulled in some
proper proceeding, is not open to contradiction or
impeachment, in respect of its validity, verity, or
binding effect, by parties or privies, in any
collateral action or proceeding, except . . . for
fraud in its procurement."
Zrimsek v. Am. Auto. Ins. Co., 8 Wis. 2d 1, 3, 98 N.W.2d 383
(1959). Where a judgment debtor asserts claims about a
judgment's legitimacy, "it is in the context of that [first]
suit and not [in the garnishment suit] that those claims should
[be] asserted." Schultz v. Sykes, 2001 WI App 260, ¶16, 248
Wis. 2d 791, 638 N.W.2d 76. Further, "[t]he fact that the
judgment is contested materially affects the nature of mistakes
9
No. 2011AP1121
that might be complained of and the considerations involved in
determining whether relief is warranted. . . . An application
for relief after a contested proceeding [as distinct from a
default judgment] therefore partakes of a petition for
reconsideration, and all the reasons for finality of judgment
are arrayed against such an application." Restatement (Second)
of Judgments § 71 cmt. a (1982). We also note that "a valid and
final award by arbitration has the same effects under the rules
of res judicata, subject to the same exceptions and
qualifications, as a judgment of a court." Restatement (Second)
of Judgments § 84(1). "If the arbitration award were not
treated as the equivalent of a judicial adjudication for
purposes of claim preclusion, the obligation to arbitrate would
be practically illusory." Id., § 84 cmt. b. The following
provisions appear in Wis. Stat. ch. 788, which governs
arbitration. After an award is made, any party has one year in
which it "may apply to the court . . . for an order confirming
the award, and thereupon the court must grant such an order
. . . ." Wis. Stat. § 788.09. "Upon the granting of an order
confirming, modifying or correcting an award, judgment may be
entered in conformity therewith in the court wherein the order
was granted." Wis. Stat. § 788.12.
III. DISCUSSION
10
No. 2011AP1121
¶12 In this case, the application of the garnishment
statute requires us to determine whether the holder of the
Denmark State Bank account, "EA Green Bay, LLC d/b/a Paul Davis
Restoration & Remodeling of NE WI d/b/a Building Werks," is the
debtor against whom the judgment was entered.
¶13 The question, as the circuit court correctly
identified it, is whether "the underlying judgment against Paul
Davis Restoration of Northeast Wisconsin can apply to [the legal
entity, EA Green Bay, LLC]" so that the assets in the bank
account belonging to EA Green Bay, LLC, are subject to
garnishment in satisfaction of the judgment. To answer that
question, we need to examine principles related to a legal
entity such as a corporation or a person doing business as or
under a name different from the corporation’s or person’s name.
In doing so, we examine Wisconsin case law and also consider how
other jurisdictions have approached the issue.
¶14 First, we consider what Wisconsin courts have said
about the names under which a legal entity such as a corporation
or person does business.8 The parties, as noted previously, rely
8
In this case we discuss use of a d/b/a designation or
trade name interchangeably. Black's Law Dictionary (9th ed.
2009) states that "d/b/a" is the abbreviation for "doing
business as"; the definition continues:
[Usually] precedes a person's or business's assumed
name . It
11
No. 2011AP1121
on the same cases yet reach opposite conclusions about how the
stated principle applies in the context of an action under the
garnishment statute.
¶15 The three cases that mention the principle or rule of
law that we consider here——that a d/b/a designation "is merely
descriptive of the person or corporation who does business under
some other name; it does not create or constitute an entity
distinct from the person operating the business"——are Jacob,
Binon and Capsavage. In each of these cases, the brief
discussion about the "doing business as" name appears to be
secondary to the legal question being decided in the case, and
none of these cases directly addresses an action under the
garnishment statute.
¶16 The first, Jacob, was a case concerning construction
defects and a contractor's insurer's duty to defend, and the
signals that the business may be licensed or
incorporated under a different name. Cf. tradename.
Black's Law Dictionary defines "tradename" this way:
A name, style, or symbol used to distinguish a
company, partnership, or business (as opposed to a
product or service); the name under which a business
operates. A tradename is a means of identifying a
business — or its products or services — to establish
goodwill. It symbolizes the business's reputation. Cf.
brand; d/b/a; trademark.
Black's Law Dictionary 455 (9th ed. 2009) (emphasis added).
12
No. 2011AP1121
court of appeals made the observation about the d/b/a
designation in a footnote in which the court commented on a
tactical decision by a subcontractor's attorney not to answer
the complaint. Jacob, 203 Wis. 2d at 537 n.7. The case to
which the Jacob footnote cited, Duval v. Midwest Auto City,
Inc., 425 F. Supp. 1381, 1387 (D. Neb. 1977), aff'd, 578 F.2d
721 (8th Cir. 1978), was an odometer-tampering case, and the
plaintiffs had listed six defendants in the amended complaint,
including two d/b/a designations. Though there is no indication
that it was a contested issue in the case, the court stated:
Under the evidence there are four entities only –
Midwest Auto City, Inc., David Studna, Ervin Delp, and
Bernard Flaherty. The designation "d/b/a" means "doing
business as" but is merely descriptive of the person
or corporation who does business under some other
name. Doing business under another name does not
create an entity distinct from the person operating
the business. The individual who does business as a
sole proprietor under one or several names remains one
person, personally liable for all his obligations. So
also with a corporation which uses more than one name.
Id. (Emphasis added.)
¶17 The second case, Binon, concerned whether a policy-
holder was a motor vehicle handler for purposes of a statute
giving such entities permission to restrict coverage. The
policy was issued to "Arrow Motors, Inc., d/b/a Lease Associates
Group." Binon v. Great N. Ins. Co., 218 Wis. 2d 26, 35, 580
N.W.2d 370 (Ct. App. 1998). Plaintiffs had argued that the
d/b/a designation of "Lease Associates Group" was not a motor
vehicle handler, even if Arrow Motors was. The court of appeals
quoted the Jacob court as the basis for treating the d/b/a
13
No. 2011AP1121
designation as an entity that was not distinct from Arrow
Motors, Inc. In determining whether the restricted coverage was
permitted under the statute in that case, the court "look[ed] to
all the activities and services of the insured . . . and not
merely the activities of its leasing division . . . , which has
no independent legal status or significance." Id.
¶18 A third Wisconsin case in which a company's "doing
business as" name is discussed is Capsavage. The Capsavages
were seeking to hold a shareholder of a corporation personally
liable for a breach of contract by the corporation after they
paid $291,987 for a yacht that was never delivered. Capsavage,
224 Wis. 2d at 407-409. The contract was with Sundance Marine
d/b/a San Diego Sea Ray (SDSR). Id. at 407. The Capsavages
sought to argue that SDSR was actually a joint venture or a
partnership and that the shareholder was personally liable for
the contract as a participant in the partnership. Id. at 414-
415. The court of appeals rejected the argument, noting that "a
fictitious name filing was made for Sundance Marine to do
business as SDSR." Id. at 415. The court added, "When a
corporation does business under another name, it does not create
a distinct entity. Rather, SDSR [the d/b/a designation] is
simply another way to refer to Sundance Marine." Id.
¶19 Northeast and Southeast both rely on the principle
cited in the above cases that the name under which a person or
corporation does business is not a "distinct entity." Northeast
argues that that means that such a name is not an entity against
which a judgment can be enforced. It analogizes the situation
14
No. 2011AP1121
to cases in which a party has failed to identify and serve the
proper party,9 citing Johnson v. Cintas Corp. No. 2, 2011 WI App
5, 331 Wis. 2d 51, 794 N.W.2d 475, aff'd, 2012 WI 31, 339 Wis.
2d 493, 811 N.W.2d 756 (holding that a court had no personal
jurisdiction over defendant when there was a fundamental defect
in a summons and complaint that named, rather than the intended
defendant, the similarly named parent corporation of the
intended defendant). Southeast argues that the "not a distinct
entity" language means that a judgment against the name under
which a company does business is simply a judgment against the
legal entity from which the "doing business as" name is legally
indistinct.10
¶20 The principle or rule of law stated in these cases——
that the name under which a person or corporation does business
9
We note, as did the circuit court, that there is no
"evidence calling into question whether any other business
operated as Paul Davis Restoration of Northeast Wisconsin and
had [the same address], as is indicated on the Milwaukee County
judgment." Nor is there any allegation or evidence of lack of
notice or improper service in this case.
10
The parties also make arguments concerning judicial
estoppel and a collateral attack against a judgment. Because we
resolve this case on the grounds that the judgment can be
validly enforced against the account held by Denmark State Bank,
we do not address the parties' other arguments. Northeast
additionally argues that the money in the Denmark State Bank
account in question cannot be reached under the garnishment
statute because it "does not belong to [Northeast]" but belongs
to EA Green Bay, LLC, instead. This argument merely restates
the question we address concerning the nature of the
relationship between a legal entity and the name under which it
does business; therefore, there is no need to address that
argument separately.
15
No. 2011AP1121
is indistinct from the underlying legal entity——is more
logically consistent with the circuit court's approach. The
circuit court held that "the two names refer to the same legal
entity." The court of appeals' approach implicitly treated the
name as a distinct but legally meaningless entity.
¶21 A case concerning a judgment against a name under
which a legal entity is doing business is very different from
the category of cases involving a plaintiff's failure to
identify and serve the proper party. Such cases turn on a
different question (i.e., which of several distinct legal
entities is the proper defendant) and, more importantly, involve
different considerations, such as notice. See Mared Indus.,
Inc. v. Mansfield, 2005 WI 5, ¶¶34, 38, 277 Wis. 2d 350, 690
N.W.2d 835 (discussing the "policy of ensuring that a defendant
receives notice of an action" and acknowledging that "the
consequences for failing to strictly comply with the statutory
rules of service are harsh"); Johnson v. Cintas Corp. No. 2,
2012 WI 31, ¶24, 339 Wis. 2d 493, 811 N.W.2d 756 ("Indeed,
notice that apprises a party of the pendency of an action
against it and affords the opportunity to present objections is
regarded as '[a]n elementary and fundamental requirement of due
process.'"). As the court specifically noted in Cintas Corp.
No. 2,
Unlike the single corporation in Hoesley, which the
plaintiff correctly sued but simply misnamed as "La
Crosse VFW Chapter, Thomas Rooney Post," see 46 Wis.2d
at 502, 175 N.W.2d 214, Cintas and Cintas No. 2 are
two, distinct legal entities, and Johnson mistakenly
sued the first instead of the second.
16
No. 2011AP1121
Cintas Corp. No. 2, 339 Wis. 2d 493, ¶41 (emphasis added). The
court further stated that the plaintiff did not dispute "that
his summons and complaint named the wrong party . . . and that
the party he intended to sue . . . is an independent legal
entity." Id., ¶42 (emphasis added). Although it is relied upon
by Northeast, Cintas Corp. No. 2 does not support its argument
in this garnishment action.
¶22 The majority of courts from other jurisdictions
confronted with similar cases in which a judgment debtor
challenges the enforceability of a judgment against an entity
using a name under which an entity does business have reached
the same conclusion we reach in this case. See Acad. of IRM v.
LVI Envtl. Serv., Inc., 687 A.2d 669, 677 (Md. 1997) (holding
that "notice that an order for default had been entered against
Trade Name was notice to Debtor that an order for default had
been entered against it, since Trade Name was simply another
name by which Debtor was known"); Aman Collection Serv., Inc. v.
Burgess, 612 S.W.2d 405, 408-409 (Mo. App. 1981) (holding that a
judgment solely against a d/b/a designation may be enforced
against the entity operating under the trade name on the grounds
that "the trial court committed no error in finding that Dako
Products Co. was merely a trade name under which Robert V.
Burgess operated and that they were one and the same");
Toulousaine de Distribution et de Services v. Tri-State Seed and
Grain, 520 N.W.2d 210, 215 (Neb. Ct. App. 1994) (stating that
"[t]he law from other jurisdictions also indicates that doing
business under another name or several names does not create an
17
No. 2011AP1121
entity separate and distinct from the person operating the
business, and the person remains personally liable for all his
or her obligations," and holding that where evidence is that a
sole proprietor is doing business under a trade name and a
judgment is obtained against the trade name, the judgment
creditor may execute the registered judgment); Beneficial Fin.
Co. of Colo. v. Bach, 665 P.2d 1034, 1037 (Colo. Ct. App. 1983)
(in a garnishment action, affirming a trial court's finding that
where an entity on a lease was a trade name for a corporation,
the corporation was liable under the lease, and noting that "a
valid judgment against Compass Real Estate, Limited, must also
be premised upon the fact that Realty World Senti, the named
defendant and judgment debtor, is the trade name of that
corporation"); Becker v. Truitt, 154 S.E. 262, 263 (Ga. 1930)
(holding that "[a] judgment rendered against a person in his
assumed or trade name is not void"); Long v. Carolina Baking
Co., 3 S.E.2d 46, 50 (S.C. 1939) (where a corporation was doing
business under a trade name, a "verdict and judgment against
[the trade name] is binding upon the existent corporate entity
and its assets" and judgment against a trade name "would not
invalidate the judgment, where . . . the corporate defendant has
suffered no prejudice"); Bishop v. Wilson Quality Homes, 986
P.2d 512, 514 (Okla. 1999) (where plaintiff sought to amend a
Workers' Compensation judgment against a d/b/a designation to
add the legal entity to which it was attached, court held that
plaintiff "may collect his judgment against [the d/b/a
designation] as he would from any business whose judgment was
18
No. 2011AP1121
pronounced as a result of trial in district court" and "does not
need a nunc pro tunc order inserting [the legal entity's name]
into the original award"); and Hughes v. Cox, 601 So. 2d 465,
471 (Ala. 1992) ("[W]e affirmatively hold that a judgment
entered against a trade name is a judgment against the
individual doing business under that trade name, at least so
long as the individual was personally served with the
complaint.").
¶23 The Louisiana courts have, based on an interpretation
of a Louisiana statute, held that a "doing business as" name is
not a separate legal entity against which a judgment can be
entered11 but mitigated the consequences for a plaintiff by
employing an "equitable remedy the Louisiana Supreme Court
crafted" in such cases: while they have held that a judgment
entered against a legal nonentity cannot stand, the courts have
granted plaintiffs a remand for a new trial and instructions to
the trial court that the plaintiff be allowed leave to amend the
petition to name the proper party defendant. Assensoh v.
Diamond Nails, 897 So. 2d 806, 812 (La. App. 2005); Walker v.
Self-Serv. Storage and Mini Warehouses, Inc., 519 So. 2d 771
(La. 1988).
11
"Underlying this line of jurisprudence is the principle
codified in La. C.C.P. art. 736 that a trade name is not a
separate legal entity capable of being sued." Assensoh v.
Diamond Nails, 897 So. 2d 806, 810 (La. Ct. App. 2005).
19
No. 2011AP1121
¶24 In light of the principle that the name under which a
legal entity does business "does not create or constitute an
entity distinct from the person operating the business," "is
merely descriptive of the person or corporation who does
business under some other name," and "is simply another way to
refer" to the legal entity, we find no basis for holding that a
judgment against such a name, indistinct from the legal entity
to which it is attached, cannot be enforced against that entity.
Nothing in Wisconsin law precludes our conclusion, and the case
law from the majority of other jurisdictions provides ample
support for it.
¶25 As noted above, the question presented in this
garnishment action is whether, under Wis. Stat. § 812.01, the
money in the Denmark State Bank is "property . . . belonging to
[the] creditor’s debtor." Northeast, the name under which EA
Green Bay, LLC, does business, is not an entity distinct from EA
Green Bay, LLC. The account at Denmark State Bank is in the
name of "EA Green Bay LLC d/b/a Paul Davis Restoration &
Remodeling of NE WI d/b/a Building Werks." The account is
"property . . . belonging to such creditor's debtor or which is
subject to satisfaction of an obligation . . . ." in an action
under Wis. Stat. § 812.01, and therefore can be used to satisfy
the judgment granted which confirmed the arbitration award.
IV. CONCLUSION
¶26 Wisconsin courts have not directly addressed the
precise question presented: whether an otherwise valid judgment
can be enforced against a legal entity when the judgment is
20
No. 2011AP1121
entered against the name under which the legal entity does
business. The cases relied on by the circuit court and court of
appeals state that when a person or corporation does business
under a name, that name "is merely descriptive of the person or
corporation" and "it does not create or constitute an entity
distinct from the person operating the business." Jacob, 203
Wis. 2d at 537 n.7. In Capsavage, which involved a dispute
concerning the type of legal entity involved, the court
clarified that the name under which the company, Sundance
Marine, was doing business was not "a distinct entity" but
rather was "simply another way to refer to Sundance Marine."
¶27 It follows from this principle that if the name under
which a person or corporation does business is "simply another
way to refer to" a single legal entity and constitutes no entity
distinct from the person or corporation who does business, then
a judgment against the "doing business as" name is enforceable
against the legal entity from which it is indistinct. This
result is consistent with the approach taken on this question by
the majority of other jurisdictions that have addressed it.
Based on this principle in Wisconsin case law concerning a d/b/a
designation or trade name, and consistent with the approaches of
the majority of other jurisdictions, we hold that the judgment
against EA Green Bay, LLC's d/b/a designation, Paul Davis
Restoration of Northeast Wisconsin, is enforceable against EA
Green Bay, LLC, and the account at Denmark State Bank; Northeast
and Green Bay, LLC, are not two distinct legal entities; and EA
Green Bay, LLC, was undisputedly doing business under the name
21
No. 2011AP1121
Northeast. We reverse the decision of the court of appeals and
remand to the circuit court for further proceedings consistent
with this opinion.
By the Court.— Reversed and cause remanded.
22
No. 11AP1121.pdr
¶28 PATIENCE DRAKE ROGGENSACK, J. (concurring). The
majority opinion concludes that the judgment in favor of Paul
Davis Restoration of Southeast Wisconsin, Inc. (Southeast),
entered as the confirmation of an arbitration award against Paul
Davis Restoration of Northeast Wisconsin (Northeast) (which is a
"doing business as" (d/b/a) designation employed by EA Green
Bay, LLC), is enforceable in a garnishment action against an
account at Denmark State Bank that is held in the name of EA
Green Bay, Northeast and other d/b/a's of EA Green Bay.1 I
agree.
¶29 Prior to entering the judgment confirming the
arbitration award, Southeast's counsel requested that the court
name EA Green Bay as a defendant in the judgment because
Northeast was a d/b/a designation for EA Green Bay and not a
separate legal entity. In response, counsel for Northeast
represented to the court that a judgment solely in the name of
Northeast was fully enforceable, even though "Paul Davis
Restoration of Northeast Wisconsin" was not a legal entity.
Northeast now asserts that the judgment is not enforceable
because, although Northeast's name was on the bank account to be
garnished, Northeast is not a legal entity and therefore has no
legal ownership in the bank account.
1
Majority op., ¶5.
1
No. 11AP1121.pdr
¶30 Because of Northeast's prior inconsistent
representations to the circuit court, which the circuit court
apparently accepted, I conclude that Northeast is judicially
estopped from challenging the garnishment on the ground that the
judgment is not enforceable because Northeast is not a legal
entity. Accordingly, I respectfully concur with the majority
opinion's reversal of the decision of the court of appeals,
albeit on a different rationale.
I. BACKGROUND
¶31 Both Southeast and EA Green Bay are franchisees of
Paul Davis Restoration, Inc. EA Green Bay operated its
franchise under the name of Northeast. Northeast is not a
corporate entity, but rather it is a trade name, or "d/b/a," of
EA Green Bay.
¶32 Southeast and Northeast entered into arbitration for
claims that each franchisee was doing business in the exclusive
territory of the other and therefore each owed certain payments
to the other. The arbitration panel agreed that both
franchisees had been selling in the other's exclusive territory,
but that Northeast had done so much more frequently. The panel
issued a net award that required Northeast to pay Southeast
$101,693.10.
¶33 Southeast's counsel moved the circuit court of
Milwaukee County to confirm the award. During that process
counsel for Southeast sought to have EA Green Bay and others
added as defendants. Southeast's counsel said,
[If the court] confirms the award in such a manner
that it is only against . . . Paul Davis Restoration
2
No. 11AP1121.pdr
of Northeast Wisconsin, I'm not even sure how to go
about collecting against a company operating as a
trade name. How do you separate the company's trade
name from the underlying entity? And not just any
underlying entity, but the underlying entity that's
required to be there under the franchise
agreement. . . . The only way to give [e]ffect to the
award in this case is to make it against . . . the
underlying entities. To do otherwise would tie the
hands of the party who received the award in this case
from enforcing any judgment. Because I'm not sure
how——I'm sure that you can't own property under a
DBA. . . . Without that, we'll have a judgment that I
believe would be worthless.
¶34 In response, Northeast's counsel urged the circuit
court to reject Southeast’s argument and refuse to add EA Green
Bay to the judgment:
First of all, the fact that someone operates under——an
entity operates under a trade name does not mean that
it is not also a business entity of its own. That
doesn't follow as a matter of law. Secondly,
regardless of that, a business operating under a trade
name certainly can own all sorts of assets. And—— And
thirdly, the idea that as a matter of law an entity
operating as a quote DBA, meaning it's operating under
a trade name, the idea that a judgment can't be
enforced against it is simply untrue as matter of law.
After considering the arguments of counsel, the circuit court
issued a judgment against Northeast and not against EA Green
Bay, consistent with Northeast's contention.
¶35 When the garnishment action from which this review
springs was filed in Brown County Circuit Court, it named only
Northeast as the debtor and Denmark State Bank as the garnishee.
The bank responded that it had an account in the name of EA
3
No. 11AP1121.pdr
Green Bay LLC d/b/a Paul Davis Restoration & Remodeling of NE WI2
d/b/a Building Werks. The Bank said that on the date that it
received the garnishment, the account had a balance of
$102,772.87, which the Bank would hold until further order of
the court.
¶36 Northeast objected to release of the funds and a
hearing on its objection was held before the circuit court of
Brown County. At the conclusion of that hearing, the circuit
court found that
[Northeast] has had ample opportunity to make some
kind of showing that EA [Green Bay] is not in fact the
same entity as is named in the Milwaukee County
judgment as a defense to garnishment, and yet the
record is devoid of any evidence that the owner of the
account and the judgment debtor are two different
business entities.
Thereafter, the circuit court concluded that the bank account
was properly subject to Southeast's garnishment action.
¶37 The court of appeals reversed, concluding that because
Northeast is a d/b/a and not a legal entity, the judgment
against Northeast is unenforceable against the bank account.
Paul Davis Restoration of S.E. Wis., Inc. v. Paul Davis
Restoration of Ne. Wis., No. 2011AP1121, unpublished slip op.,
¶9 (Wis. Ct. App. June 12, 2012).
¶38 Before us, Northeast again contends that a judgment
against a trade name is unenforceable. Northeast agrees that
2
No one has argued that the slight difference in the names
of Paul Davis Restoration of Northeast Wisconsin and Paul Davis
Restoration & Remodeling of NE WI is significant or that both do
not refer to the same d/b/a for EA Green Bay, so I do not
consider it further.
4
No. 11AP1121.pdr
Southeast attempted to convince the Milwaukee County Circuit
Court to add EA Green Bay as a debtor and that the circuit court
did not do so. At oral argument, Chief Justice Abrahamson asked
counsel for Northeast whether a predecessor attorney had
represented to the Milwaukee County Circuit Court that EA Green
Bay was bound by the judgment even without being named. Counsel
admitted that that had happened, but asserted that it was an
erroneous statement to the court, which she characterized as a
mistake insufficient to support judicial estoppel.
II. DISCUSSION
A. Standard of Review
¶39 Whether judicial estoppel applies presents a question
of law for our independent review. State v. Petty, 201 Wis. 2d
337, 346-47, 548 N.W.2d 817 (1996).
B. Principles of Judicial Estoppel
¶40 Statements of law upon which a circuit court relies
may give rise to the equitable doctrine of judicial estoppel.
Under that doctrine, a party is precluded from asserting a
position in litigation after having previously asserted an
inconsistent position at a different stage in the litigation, or
in another proceeding. See State v. Ryan, 2012 WI 16, ¶¶32–34,
338 Wis. 2d 695, 809 N.W.2d 37 (discussing elements and
application of judicial estoppel in two separate, but factually
interrelated proceedings).
¶41 Judicial estoppel is intended to protect the integrity
of the judicial process against parties playing "fast and loose
with the courts by asserting inconsistent positions." Petty,
5
No. 11AP1121.pdr
201 Wis. 2d at 347 (internal quotation marks and citation
omitted). The doctrine, therefore, does not operate on the
relationship between the parties, but instead operates on the
relationship between each party and the judicial system. See
id. at 346 (noting that "judicial estoppel is not directed to
the relationship between the parties").
¶42 As with other equitable doctrines, the application of
judicial estoppel is typically within the discretion of the
circuit court. State v. Fleming, 181 Wis.2d 546, 558, 510
N.W.2d 837 (Ct. App. 1993). However, because the elements of
judicial estoppel are questions of law, a circuit court's
failure to address the doctrine will not preclude an appellate
court from doing so. See Petty, 201 Wis. 2d at 346–47
(recognizing propriety of appellate court addressing judicial
estoppel where doctrine had not been applied by circuit court).
¶43 For a party to be judicially estopped from maintaining
a particular position in litigation, three elements must be met.
Id. at 348. First, the party's position must be "clearly
inconsistent" with an earlier position. Id. Second, the facts
relevant to the party's position must have been the same at both
points in litigation. Id. Third, the party to be judicially
estopped "must have convinced the first court to adopt its
position." Id. Additionally, because judicial estoppel "looks
toward cold manipulation and not unthinking or confused
blunder," the doctrine will not be applied to inadvertent
representations. Id. at 347.
6
No. 11AP1121.pdr
C. Application
¶44 Northeast's representations to the Milwaukee County
Circuit Court meet the three criteria necessary for judicial
estoppel. Therefore, I conclude that Northeast is estopped from
contending that the judgment upon which the garnishment is based
may not be enforced because Northeast is not a legal entity.
First, the facts relevant to whether Northeast was a legal
entity did not change between the hearing before the Milwaukee
County Circuit Court and the commencement of this garnishment
action. During the relevant time period, Northeast remained a
d/b/a or trade name of EA Green Bay.
¶45 Second, Northeast represented to the Milwaukee County
circuit court that EA Green Bay's use of the d/b/a designation
would not prevent enforcement of the judgment. Counsel for
Northeast said, "the idea that a judgment can't be enforced
against it is simply untrue as a matter of law." Northeast's
contention was made to the court when Southeast moved to add EA
Green Bay as a party to the judgment and argued that EA Green
Bay must be added in order to prevent the judgment from being
unenforceable. Southeast said that without a legal entity as a
party to the judgment, "we'll have a judgment that I believe
would be worthless." After consideration of the arguments of
counsel, the circuit court denied Southeast's request to add EA
Green Bay as a party to the judgment.
¶46 Third, as repeated more fully in the quote in
paragraph 7 above, Northeast's legal position was carefully
stated and urged the circuit court not to name EA Green Bay as a
7
No. 11AP1121.pdr
party to the judgment. Northeast's contention was not
inadvertently made but was placed before the court in direct
response to Southeast's position that without the addition of EA
Green Bay, Southeast would have a judgment that was "worthless."
Before us, Northeast attempts to make the judgment worthless in
this garnishment action.
¶47 Accordingly, Northeast's position before us meets all
the elements for judicial estoppel. Therefore, I conclude that
Northeast is estopped from asserting that its bank account
cannot be garnished based on Northeast not having the legal
status that would permit it to have ownership rights in the
account.
III. CONCLUSION
¶48 Because of Northeast's prior inconsistent
representations to the circuit court, which the circuit court
apparently accepted, I conclude that Northeast is judicially
estopped from challenging the garnishment on the ground that the
judgment is not enforceable because Northeast is not a legal
entity. Accordingly, I respectfully concur with the majority
opinion's reversal of the decision of the court of appeals,
albeit on a different rationale.
¶49 I am authorized to state that Justice ANNETTE
KINGSLAND ZIEGLER joins this concurrence.
8
No. 11AP1121.pdr
1