Duncan v. Asset Recovery Specialists Inc: Another Example of the Wisconsin Courts’ Expansive Interpretation of the Wisconsin Consumer Act

WDC Journal Edition: Spring 2022
By: John H. Healy and Alyssa N. Chojnacki, Corneille Law Group LLC

The Wisconsin Supreme Court’s recent decision in Duncan v. Asset Recovery Specialists, Inc.[i] follows the state courts’ consistent pattern of interpreting the Wisconsin Consumer Act (“WCA”) in a consumer-friendly manner. In the case, the court sought to answer two questions: 1) Whether a “dwelling used by a consumer as a residence” includes an underground/ground floor apartment garage; and 2) Whether the consumer may bring a claim of unconscionability during a nonjudicial repossession. The court concluded: 1) An underground/ground floor garage constitutes a portion of an individual’s dwelling used as a residence; and 2) Claims of unconscionability are not available to consumers after a non-judicial repossession.

I. Introduction

The Wisconsin Supreme Court’s recent decision in Duncan v. Asset Recovery Specialists, Inc.[1] follows the state courts’ consistent pattern of interpreting the Wisconsin Consumer Act (“WCA”) in a consumer-friendly manner. In the case, the court sought to answer two questions: 1) Whether a “dwelling used by a consumer as a residence” includes an underground/ground floor apartment garage; and 2) Whether the consumer may bring a claim of unconscionability during a nonjudicial repossession. The court concluded: 1) An underground/ground floor garage constitutes a portion of an individual’s dwelling used as a residence; and 2) Claims of unconscionability are not available to consumers after a non-judicial repossession.

As a preliminary matter, the WCA is a broadly worded law with the stated intention of protecting consumers from unfair or deceptive practices. Specifically, The WCA states the law “shall be liberally construed and applied . . . to protect customers against unfair, deceptive, false, misleading, and unconscionable practices by merchants.”[2] In other words, the WCA is a very consumer friendly law as drafted and is consistently consumer friendly in its application.

When a customer defaults on a loan for a motor vehicle, a creditor has two available methods to repossess the car under the WCA. The first available option is judicial repossession under Wis. Stat. § 425.205. Under this section, the creditor initiates a formal legal proceeding against the consumer. The second option available to creditors is a nonjudicial repossession under Wis. Stat. § 425.06. When performing a nonjudicial repossession, the creditor and other parties, such as the repossession agency, do not need to inform the court of the repossession upon the consumer’s default on a loan, if certain procedures are followed.

Wis. Stat. § 425.206(2) governs nonjudicial enforcement of repossessions and states that in the process of repossessing a car, a debt collector may not “a) commit a breach of the peace” or “b) enter a dwelling used by a customer as a residence except at the voluntary request of a customer.”[3] If a lender or repossession agency violates Wis. Stat. § 425 during a non-judicial repossession, the parties face exposure for more damages than likely anticipated. The damages under Wis. Stat. § 421.304 (the section applying to nonjudicial repossessions) include statutory damages, return of the vehicle to the consumer, return of costs paid on the loan and deletion of loan remainder, reasonable attorney fees (which increase greatly as litigation proceeds) and potentially punitive damages. These damages are to be “liberally administered.”[4]

II. Duncan v. Asset Recovery Specialists, et al.

In Duncan, the defendants, repossession agency Asset Recovery Specialists, arrived at the apartment building of plaintiff Danelle Duncan to perform a nonjudicial repossession of her vehicle after she defaulted on a loan.[5] Ms. Duncan’s car was parked in a ground floor parking garage, which constituted the first floor of her multi-unit apartment building.[6] The door to the parking garage was open, and the repossession agent entered the parking garage without trouble and repossessed the vehicle, without Ms. Duncan’s knowledge.[7] Ms. Duncan then sued Asset Recovery Specialists under Wis. Stat. § 425.206(2)(b) and Wis. Stat. § 425.107(1), alleging that the agent had entered her dwelling without her permission and that the agent acted in an unconscionable manner.[8]

Plaintiff first filed this case in federal court.[9] At that stage Ms. Duncan made statements regarding the extent of her use of the garage, admitting that she “never lived or resided in the garage.”[10] The case was dismissed from federal court and then refiled in Dane County Circuit Court.[11] Plaintiff filed a motion for summary judgment, arguing that the garage constituted a dwelling and that the unconscionability claims applied to her lawsuit.[12]

The circuit court held that the garage did not qualify as a dwelling used as a residence because Ms. Duncan did not have the right to exclude others from the garage and did not conduct any activities of daily life in the residence.[13] Therefore, the repossession did not violate Wis. Stat. § 425. The court compared the garage of a multi-unit apartment building to that of a garage of single-family home, which occupants typically use in a more intimate manner.[14] The court of appeals reversed the circuit court’s decision, holding that the garage qualified as a portion of the residence.[15] Neither ruled on the issue of unconscionability.[16]

A. Whether a Garage Attached to a Residence Constitutes a Dwelling Used as a Residence under Wis. Stat. 425.206(2)(b)

The Wisconsin Supreme Court first analyzed whether a ground floor/underground parking lot constitutes a part of a dwelling used as a residence. Ultimately, the court affirmed the court of appeals, and held that a ground floor parking garage of a multi-unit apartment building qualifies as a dwelling used as a residence. Therefore, the agent violated Wis. Stat. § 425.

As stated above, Wis. Stat. § 425.206(2) prohibits a repossessing agent from “enter[ing] a dwelling used by a customer as a residence except at the voluntary request of a customer.”[17] The court notes that the WCA does not define dwelling. Next, the court stated that the common definition of a dwelling is a “building in which at least one person lives.”[18] Further, a dwelling is “not just parts of the building in which the residents might eat, sleep or shower.”[19] The court then turned to definitions of dwelling in other statutes and even the Wisconsin Administrative Code to confirm its interpretation of the word dwelling.[20]

After concluding a garage is a dwelling, the court analyzed whether the second part of the statute, “used by the customer as a residence,” could be read to exclude the garage as part of a dwelling. The court held that the use of the word “residence” does not exclude the garage as a part of a dwelling.

The parties offered differing interpretations of the phrase “used by the customer as a residence.” The defendants proposed that the phrase was meant to indicate a location where the consumer actually lived and performed daily living activities such as eating, sleeping, and showering.[21] In other words, places that are “integral parts” of a residence.[22] By contrast, the plaintiff proposed the phrase was only meant to distinguish the consumer’s residence from all other residences, and that the garage constituted a part of a consumer’s residence.[23] The court agreed with the plaintiff, stating that the more “natural reading” of the phrase “used by the customer as a residence” is meant to apply to the entire dwelling, and not just part of the dwelling.[24] Arguably, such an interpretation ignores the plain meaning of the statute. The court explained, however, that its decision would help to provide clear guidance moving forward regarding repossessions and added further strength to their decision to interpret the garage as a dwelling a consumer uses as a residence.[25]

Writing in dissent, Justice Patience D. Roggensack noted that the court ignored the plain meaning of the statute, instead focusing on a patchwork like analysis to affirm the court of appeals’ decision that a ground floor/underground parking garage constitutes a dwelling that a consumer uses as a residence.[26] Justice Roggensack’s dissent seems to be a more “natural reading” of the phrase “dwelling used as a residence.” Under a plain reading of the statute, specifically the phrase “used as a residence,” one would assume the place must constitute the location where one eats, sleeps, and generally lives their life. As stated above, Ms. Duncan admitted at one point that she did not reside in the garage or perform any kind of activities in the garage. She did not have the ability to exclude others from the garage, and a third party cleaned and maintained the garage rather than Ms. Duncan herself. Holding that the garage constitutes a part of a dwelling that a customer uses a residence is not a natural reading but is not surprising given the courts’ propensity to read these statues in favor of consumers.

Overall, the court’s holding demonstrates that the court is willing and likely will continue to read the Wisconsin Consumer Act in a manner favorable to consumers. Arguably, the most natural definition of “residence” is the location in which a person actually lives, as initially ruled by the circuit court, proposed by the defendants, and emphasized in the dissent.

B. Availability of Unconscionability Defense Against Creditors in Non-Judicial Repossessions under Wis. Stat. 425.107(1)

The court next held that claims of unconscionability are not available to consumers in lawsuits regarding nonjudicial repossessions. Notably, the decision is more favorable to defendants as it places a limiting factor on damages. However, the damages available to consumers under the WCA are still significant and the court’s decision likely will not have a significant impact on the litigation of non-judicial repossession cases.

Wis. Stat. 427.107(1) states:

With respect to a consumer credit transaction, if the court as a matter of law finds that any aspect of the transaction. . . .is unconscionable, the court shall, in addition to the remedy and penalty authorized in sub. (5), either refuse to enforce the transaction against the customer, or so limit the application of any unconscionable aspect or conduct to avoid any unconscionable result.[27]

If the court finds that an aspect of the transaction was unconscionable, the plaintiff is entitled to greater damages, such as statutory damages, than those initially available for a violation of Wis. Stat. § 425.206(2)(b).

In its decision, the Wisconsin Supreme Court held that a non-judicial repossession is not an “action or proceeding brought by a creditor” and therefore consumers cannot allege unconscionability claims after nonjudicial repossessions.[28] The court limits “action or proceeding” to highly formalized circumstances, such as the initiation of litigation, and not the informal demands placed upon a non-judicial repossession.[29] Since a non-judicial repossession is not a “action or proceeding brought by a creditor” claims of unconscionability are not available to the consumers.[30]

While this holding is more favorable to defendants than consumers, it is less indicative of the court’s reading of the statutes, if for no reason other than the holding is less consequential than that posed by the first question. The damages available to a plaintiff alleging a violation of Wis. Stat. § 425 are still often largely outsized compared to the egregiousness of the act or error performed during a repossession.

III. Recommendations

Following the decision in Duncan, it is recommended that lenders, forwarding agencies, repossession agencies, and their counsel in the State of Wisconsin make a concerted effort to ensure their employees are up to date on the consumer-friendly nature of the Wisconsin Consumer Act. Counsel for these parties cannot emphasize enough that when faced with a questionable, borderline, or ambiguous situation, repossession agencies should simply abandon that attempt to repossess the vehicle and try again at a different time. While this may lead to initial frustration or further complicate an already complicated job, it will reduce the amount and likelihood of litigation regarding nonjudicial repossessions.

IV. Conclusion

In Duncan v. Asset Recovery Specialists, the Wisconsin Supreme Court held that: 1) An underground/ground floor garage constitutes a portion of an individual’s dwelling; and 2) Claims of unconscionability are not available to consumers after a non-judicial repossession. The first holding is much more relevant to both consumers and potential defendants because it demonstrates Wisconsin Courts’ propensity to broadly favor the consumer in actions under the WCA, even when such a decision may go against the plain language meaning of the statute. Accordingly, creditors, lenders, and repossession agencies need to be aware of this pattern and adjust their practices so as not to face potential liability.

Author Biographies:

John H. Healy is an attorney at Corneille Law Group where he practices primarily medical negligence, personal injury, property damage disputes, large construction losses and intellectual property disputes. He obtained his B.S. magna cum laude from Loras College and earned his J.D. from the University of Wisconsin-Madison. During both undergraduate and law school, John actively participated in moot court and mock trial. While in college, he was recognized as an All-American Attorney by the American Mock Trial Association and captained one of the top undergraduate mock trial teams in the country. In 2017, he was selected by the Wisconsin Law Journal as an “Up and Coming Lawyer.” Every year since 2019, he has been recognized as a “Rising Star” by Super Lawyers. John currently sits on the Board of Directors for the Wisconsin Defense Counsel. He has authored several articles for legal journals and has presented at legal conferences on various topics.

Alyssa N. Chojnacki is an attorney at Corneille Law Group. She received her B.A. from the University of Michigan and her J.D. from the University of Wisconsin-Madison. While in law school, Alyssa served as a managing editor of the Wisconsin Law Review. She was also a member of the Wisconsin Moot Court team, and as a competitor she won the 2020 National Tax Moot Court Competition. During law school Alyssa worked as a teaching assistant for the UW political science department and as a law clerk at a plaintiff side personal injury firm. 


[1] Duncan v. Asset Recovery Specialists, Inc., 2022 WI 1, 400 Wis. 2d 1, 968 N.W.2d 661.

[2] Wis. Stat § 421.102.

[3] (Emphasis added.) Interpretation of breach of peace is a good example of the courts’ willingness to read the WCA in favor of consumers. A breach of peace does not necessarily have to be a loud and obvious confrontation between parties; a simple verbal protest over the repossession of a vehicle constitutes a breach of peace.  Hollibush v. Ford Motor Credit Co., 179 Wis. 2d 799, 808 (1993) (an oral statement that is an “unequivocal protest” qualifies as a breach of peace). 

[4] Wis. Stat. § 425.301.

[5] Duncan, 400 Wis. 2d 1, ¶¶ 3-5.

[6] Id. ¶¶ 4-5.

[7] Id. ¶ 5.

[8] Id. ¶ 2.

[9] Id. ¶ 63 (dissent).

[10] Id. ¶ 81 (dissent).

[11] Id. ¶ 64 (dissent).

[12] Id. ¶ 7.

[13] Id.

[14] Id.

[15] Id. ¶ 8.

[16] Id.

[17] (Emphasis added).

[18] Id. ¶ 11.

[19] Id. ¶ 12.

[20] The Wisconsin Administrative Code, which is not a part of the WCA, defines “dwelling” as “any garage, shed, barn or other building on the premises whether attached or unattached.”

[21] Id. ¶ 17.

[22] Id.

[23] Id.

[24] Id. ¶ 18.

[25] Id. ¶ 19.

[26] Id. ¶ 55 (dissent).

[27] (Emphasis added).

[28] Id. ¶ 27.

[29] Id.

[30] Id.

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