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Keywords

contractstatuteappealtrustforeclosuregood faith
contractstatuteappealforeclosuregood faith

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Kordecki v. Rizzo, 106 Wis.2d 713, 317 N.W.2d 479

Facts

In 1974, the Katts entered into a land contract with the Garcias, who defaulted in 1977, leading to a foreclosure action. A lis pendens was filed, indicating the foreclosure proceedings. Before the redemption period ended, the Garcias attempted to sell the property to Kordecki through a quit claim deed, which Kordecki recorded. However, Rizzo, acting as trustee for a buyer, had already received a warranty deed from the Garcias, which was not recorded until after Kordecki's deed. The dispute arose when Kordecki sought to establish his claim to the property against Rizzo.

In 1974 the Katts entered into a land contract as vendors with the Garcias, vendees. In 1977, the Garcias defaulted on the land contract, and the Katts brought a foreclosure action in the circuit court for Kenosha county. A lis pendens advising of the foreclosure action was filed in the office of the register of deeds for Kenosha county on June 17, 1977, pursuant to sec. 840.10(1), Stats. 1979–80.

Issue

Did Kordecki qualify as a purchaser in good faith under the notice-race recording statute, thereby entitling him to protection against Rizzo's claim to the property?

Did Kordecki qualify as a purchaser in good faith under the notice-race recording statute, thereby entitling him to protection against Rizzo's claim to the property?

Rule

Under the notice-race recording statute, a purchaser in good faith and for valuable consideration whose conveyance is first duly recorded is protected against prior unrecorded interests. However, a purchaser is deemed to have constructive notice of all recorded instruments in the chain of title.

Under the notice-race recording statute, a purchaser in good faith and for valuable consideration whose conveyance is first duly recorded is protected against prior unrecorded interests.

Analysis

The court determined that Kordecki could not claim the protections of the notice-race recording statute because he failed to examine the public records, which would have revealed the lis pendens and the ongoing foreclosure action. This lack of inquiry meant that Kordecki was charged with constructive notice of the prior conveyance to Rizzo, and thus he could not be considered a purchaser in good faith.

Had Kordecki examined the record, which he did not, he would have found the lis pendens which would have led him to the Kenosha county circuit court file on the proceedings to foreclose the land contract and more specifically to the documents terminating the period of redemption on December 1, 1977.

Conclusion

The Supreme Court affirmed the Court of Appeals' decision, concluding that Kordecki was not a purchaser in good faith and therefore could not prevail in his claim to the property.

Because Kordecki cannot claim sanctuary under the notice-race recording statute, we affirm the decision of the court of appeals.

Who won?

Rizzo prevailed in the case because the court found that Kordecki did not exercise due diligence in examining the public records, which would have revealed the prior claim to the property.

Rizzo prevailed in the case because the court found that Kordecki did not exercise due diligence in examining the public records, which would have revealed the prior claim to the property.

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