Scott R. Schmidt v. Sheila Reiff

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
July 14, 2021
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal Nos. 2019AP1919 Cir. Ct. No. 2018CV611

2019AP2215

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT II

SCOTT R. SCHMIDT,

PLAINTIFF-APPELLANT,

V.

SHEILA REIFF, CLERK OF CIRCUIT COURT, KIMBERLY S. BUSHEY,
RICHARD G. CHANDLER, SECRETARY, STEVEN GORTON, CHIEF,
WALWORTH COUNTY AND DEPARTMENT OF REVENUE,

DEFENDANTS-RESPONDENTS.

APPEALS from orders of the circuit court for Walworth County:
CHAD G. KERKMAN, Judge. Affirmed.

Before Reilly P.J., Gundrum and Davis, JJ.

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).
Nos. 2019AP1919
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¶1 PER CURIAM. In these consolidated appeals, Scott Schmidt
appeals pro se from orders dismissing his complaint for failure to state a claim.
We agree that Schmidt’s complaint does not state a claim, and we affirm.

¶2 In 1990, as a result of convictions for multiple felonies, the circuit
court imposed court costs on Schmidt, which he never paid. 1 Pursuant to WIS.
STAT. § 973.05(4) (2013-14), on August 28, 2014, the circuit court entered a
$2725.20 civil judgment for those costs against Schmidt. Schmidt did not appeal
from the August 2014 judgment. In October 2014, the Walworth County Clerk of
Circuit Court (the clerk) notified Schmidt of the clerk’s intent to certify the debt to
the Wisconsin Department of Revenue (DOR) to offset a tax refund.

¶3 In 2016, the clerk entered into a State Debt Collection Agreement
(the agreement) with the DOR pursuant to WIS. STAT. § 71.93(8)(b)5. (2015-16).
In 2017, the clerk sent two notices to Schmidt that his debt was being sent to the
DOR for collection pursuant to WIS. STAT. § 71.935 (2015-16). On October 2,
2017, the DOR levied Schmidt’s bank account and recovered $351.49 on his 2014
judgment debt (the levy).

¶4 In October 2018, Schmidt commenced the case before us, suing the
clerk, the DOR, and various individuals2 and challenging the levy on a number of
grounds. After concluding that Schmidt owed the debt and that “there was a
mechanism for collecting on that debt,” the circuit court concluded that Schmidt’s

1
State v. Schmidt, Walworth County circuit court case No. 1990CF100338.
2
When we refer to the DOR or to the clerk, we are also referring to the individuals who
were affiliated with each entity when Schmidt filed his complaint.

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complaint failed to state a claim. Schmidt appeals from the dismissal of his
complaint.

¶5 As a threshold matter, we must clarify the scope of this appeal. The
2014 judgment is outside the scope of this appeal because the time for appealing
that judgment has long since expired. See WIS. STAT. RULE 809.10(1)(e) and WIS.
STAT. § 808.04(1) (2019-20). Furthermore, Schmidt’s complaint in this case
constitutes an impermissible collateral attack on the 2014 judgment. Mercado v.
GE Money Bank, 2009 WI App 73, ¶16, 318 Wis. 2d 216, 768 N.W.2d 53. We
do not consider any issue premised on a challenge to the 2014 judgment or the
existence of the judgment debt.

¶6 “A motion to dismiss for failure to state a claim tests whether the
complaint is legally sufficient to state a cause of action for which relief may be
granted.” Tietsworth v. Harley-Davidson, Inc., 2004 WI 32, ¶11, 270 Wis. 2d
146, 677 N.W.2d 233. “We review a dismissal for failure to state a claim de novo,
accepting the facts alleged in the complaint … as true ….” Id. “[T]he sufficiency
of a complaint depends on substantive law that underlies the claim ….” Data Key
Partners v. Permira Advisers LLC, 2014 WI 86, ¶31, 356 Wis. 2d 665, 849 N.W.
2d 693.

¶7 On appeal, Schmidt argues that his complaint states claims upon
which relief could be granted. Of the claims properly before this court, Schmidt
challenges the process by which the clerk sent the debt to the DOR for collection
and the process by which the DOR collected the debt.

¶8 Schmidt’s complaint alleges that in levying against his bank account
to collect upon a judgment debt, the DOR acted outside of its authority under WIS.
STAT. ch. 71 (2015-16) to collect tax due. As the DOR and the clerk correctly

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argue, Schmidt does not state a claim upon which relief can be granted. In
paragraph fifty of his complaint, Schmidt acknowledges that the county can enter
into collection agreements with the DOR to collect funds due the county. WIS.
STAT. § 71.93(8)(b)1. and (b)5. (2015-16). In this case, the DOR was not
collecting a tax due; the DOR was collecting an outstanding judgment debt due to
the county pursuant to the agreement. Schmidt’s complaint does not state a claim
that the DOR should have complied with statutes governing the collection of
taxes.

¶9 Schmidt alleges that by levying against his accounts, the DOR was
not acting under WIS. STAT. § 71.935(3)(a) (2015-16), which authorizes the DOR
to set off debts against a tax refund. Schmidt does not state a claim. The
agreement authorizes the DOR to act pursuant to WIS. STAT. § 71.93(8)(b)5.
(2015-16). The DOR may collect debts by collecting against any property of the
debtor. WIS. STAT. §§ 71.93(8)(b)5. and 71.91(6)(b) (2015-16).

¶10 Schmidt claims due process violations because he did not receive
notice of collection activities before they started in October 2014 and the 2017
levy occurred without notice to him.3 Schmidt’s 2018 complaint alleges that he is
subject to a WIS. STAT. ch. 980 (2019-20) commitment and has been residing at
Sand Ridge Secure Treatment Center since September 2010. The clerk sent the
August 2014 judgment to Schmidt at Sand Ridge. The clerk complied with WIS.
STAT. § 973.05(4)(a) (2013-14) (the clerk shall “send to the defendant at his or her

3
Even though Schmidt contends that he did not receive the October 2014 Notice of
Certification, Schmidt’s complaint alleges that he has resided at Sand Ridge Secure Treatment
Center since September 2010. The October 2014 notice shows that it was sent to Schmidt at Sand
Ridge.

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last-known address written notification that a civil judgment has been issued”).
The clerk also sent the October 2014 Notice of Certification to Schmidt at Sand
Ridge. In 2017, the clerk twice sent notices of intent to collect to Schmidt. These
notices appear in the docket entries for the 1990 felony case in which the financial
obligation was first imposed.

¶11 Schmidt is charged with knowledge of debt collection laws affecting
his property. See Ritter v. Ross, 207 Wis. 2d 476, 493, 558 N.W.2d 909 (Ct. App.
1996). We conclude that as with “proceedings for the levy and collection of taxes,
due process ‘does not imply or require the right to such notice and hearing as are
deemed essential to the validity of the proceedings and judgments of judicial
tribunals.’” Devitt v. City of Milwaukee, 261 Wis. 276, 279, 52 N.W.2d 872
(1952) (citation omitted). “[T]ax statutes may adopt a procedure summary in
nature and that notice of such proceedings need not be more than reasonably
adequate to afford the owner an opportunity to protect his property.” Id. at 280.

¶12 Schmidt was provided with notice of the debt and notices that the
clerk was taking steps to collect it. After considering the allegations in the
complaint, including the allegation that Schmidt has resided at Sand Ridge since
2010, we conclude that Schmidt was provided with the notice contemplated by
WIS. STAT. §§ 71.93(8)(b) and 71.935(2) (2015-16). His complaint does not state
a claim for relief.

¶13 Schmidt challenges the information contained in the October 2014
Notice of Certification as insufficient because while it informs the debtor of a right
to appeal, it does not express a deadline for doing so. Schmidt cites no authority
for his contention that the October 2014 certification is defective for this reason.
We do not decide inadequately briefed issues. See Vesely v. Security First Nat’l

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Bank, 128 Wis. 2d 246, 255 n.5, 381 N.W.2d 593 (Ct. App. 1985) (we will not
independently develop a litigant’s argument).

¶14 Schmidt cites no applicable authority for his claim that the DOR
should have delayed collection activities to give him a chance to pay the August
2014 judgment memorializing an obligation first imposed in 1990. The DOR
pursued collection activities as authorized by WIS. STAT. § 71.93(8)(b)5. (2015-
16), and the DOR had authority to levy upon any property belonging to Schmidt,
WIS. STAT. § 71.91(6)(b) (2015-16). Schmidt does not state a claim.

¶15 Relying on the provisions governing a delinquent tax obligation,
Schmidt claims that the interest rate on his debt should be adjusted downward, and
he should be afforded the opportunity to seek a compromise with the DOR on the
amount due. The compromise and interest provisions upon which Schmidt relies,
WIS. STAT. § 71.92 (2017-18), do not apply to him because the DOR is not
collecting delinquent income or franchise tax. The debt is not owed to the DOR;
the DOR is collecting a debt owed to Walworth County. Schmidt has not stated a
claim upon which relief can be granted.

¶16 Schmidt argues that the defendants in his case violated the
agreement between the DOR and Walworth County. Schmidt is not a party to the
agreement, and he cannot enforce its terms. See Goossen v. Standaert, 189
Wis. 2d 237, 249, 525 N.W.2d 314 (Ct. App. 1994). Schmidt has not stated a
claim upon which relief can be granted.

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¶17 Schmidt claims equal protection violations because he should have
the ability to pay the judgment without having his account levied.4 Schmidt’s
equal protection claim fails because the applicable collection statutes apply to all
debtors,5 and they do not classify debtors or treat different debtors differently. See
Nankin v. Shorewood, 2001 WI 92, ¶11, 245 Wis. 2d 86, 630 N.W.2d 141.

¶18 We turn to Schmidt’s challenges to other aspects of the circuit court
proceedings. Schmidt argues that the circuit court erred when it denied his motion
for default judgment arising out of the DOR’s late response to his complaint. We
reject this argument. “Even if a party is in default, there is no right to judgment
upon a claim not recognized by law.” Johnson v. Grzadzielewski, 159 Wis. 2d
601, 612, 465 N.W.2d 503 (Ct. App. 1990); Davis v. City of Elkhorn, 132 Wis. 2d
394, 398-99, 393 N.W.2d 95 (Ct. App. 1986) (a party’s failure to answer does not
automatically entitle the complainant to a judgment when the complaint does not
state a claim for relief).

¶19 Schmidt argues that he should have been permitted to amend his
complaint. As the clerk points out, Schmidt’s proposed amendment did not add a
claim to his complaint. Rather, Schmidt merely wanted to amend his complaint to
include the agreement between Walworth County and the DOR. This document
was already before the circuit court as part of the clerk’s answer. The circuit court
did not misuse its discretion when it denied Schmidt’s request to amend his

4
Schmidt makes an ex post facto challenge in relation to the collection of the judgment
debt. Ex post facto challenges only arise in the context of a statute that imposes punishment.
Kaufman v. Walker, 2018 WI App 37, ¶18, 382 Wis. 2d 774, 915 N.W.2d 193. Collecting the
judgment debt did not punish Schmidt within the meaning of ex post facto law.
5
For example, WIS. STAT. § 71.93(1)(b) (2015-16).

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complaint.6 See Mach v. Allison, 2003 WI App 11, ¶20, 259 Wis. 2d 686, 656
N.W.2d 766.

¶20 Schmidt argues that the circuit court was biased against him. A
judge is presumed to be “free of bias and prejudice.” See State v. McBride, 187
Wis. 2d 409, 414, 523 N.W.2d 106 (Ct. App. 1994). That a judge rules against a
party is not evidence, in and of itself, of bias. See OLR v. Nora, 2018 WI 23, ¶35,
380 Wis. 2d 311, 909 N.W.2d 155 (judicial rulings alone almost never constitute a
valid basis for a bias or impartiality motion). There is no indication, by citation to
the record on appeal, that Schmidt raised the bias claim in the circuit court. We do
not search the record to support a litigant’s arguments, see Wisconsin Power &
Light Co. v. Public Serv. Comm’n, 171 Wis. 2d 553, 572, 492 N.W.2d 159 (Ct.
App. 1992), we do not address issues raised for the first time on appeal, Segall v.
Hurwitz, 114 Wis. 2d 471, 489, 339 N.W.2d 333 (Ct. App. 1983), and we will not
find facts relating to the bias claim, Kovalic v. DEC Int’l, 186 Wis. 2d 162, 172,
519 N.W.2d 351 (Ct. App. 1994).

¶21 We decide cases “on the narrowest possible ground,” and we do not
reach issues we need not reach.7 Village of Slinger v. Polk Properties LLC, 2021
WI 29, ¶26 n.12, 396 Wis. 2d 342, 957 N.W.2d 229. While we have considered
all of the arguments in the briefs, we have only discussed those arguments

6
The circuit court’s dismissal of Schmidt’s complaint for failure to state a claim had the
effect of denying all pending requests for relief, including Schmidt’s motion for leave to amend
his complaint. See WIS. STAT. RULE 809.10(4) (2019-20).
7
Because we affirm the dismissal for failure to state a claim, we do not address any
other issues, including Schmidt’s discovery issue.

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necessary to our decision. See State v. Waste Mgmt. of Wis., Inc., 81 Wis. 2d
555, 564, 261 N.W.2d 147 (1978) (we are not bound by the manner in which the
parties have structured or framed the issues). Arguments not discussed have been
considered and rejected. Id.

¶22 We conclude that Schmidt’s complaint does not state a claim for
relief. See Data Key Partners, 356 Wis. 2d 665, ¶31. Therefore, we affirm the
circuit court’s dismissal of the complaint for failure to state a claim.

By the Court.—Orders affirmed.

This opinion will not be published. See WIS. STAT. RULE
809.23(1)(b)5. (2019-20).

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