Donald W. Pelfresne v. Village of Williams Bay
917 F.2d 1017, 1990 WL 171651 (1991)
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Rule of Law:
The Anti-Injunction Act does not bar a federal suit by a subsequent property purchaser seeking to enjoin a state court judgment if they are not in privity with the state court defendant. Privity is established by demonstrating the purchaser had actual, constructive, or inquiry notice of the judgment affecting the property under state law.
Facts:
- In November 1984, the Village of Williams Bay sued property owner Michael Schiessle in state court to have four unsafe houses on his property razed, and filed a notice of lis pendens.
- The suit was dismissed on technical grounds in July 1985 and immediately refiled, but the Village did not file a new notice of lis pendens for the second suit.
- In June 1986, the state court entered a judgment in the refiled suit ordering the buildings razed and awarding the Village $629.42 in damages.
- The clerk of court created a judgment docket card that noted the monetary damages but made no mention of the raze order.
- The property was conveyed through a series of owners, with Schiessle remaining the beneficial owner.
- In September 1987, Donald Pelfresne, Schiessle's nephew, purchased the property for $60,000.
Procedural Posture:
- Donald Pelfresne sued the Village of Williams Bay in U.S. District Court, seeking an injunction to prevent the enforcement of a state court's raze order.
- The district court denied Pelfresne's motion for a preliminary injunction.
- Pelfresne appealed to the U.S. Court of Appeals for the Seventh Circuit, which affirmed the denial but remanded the case for the district court to determine if the Anti-Injunction Act barred the suit.
- On remand, the district court held that the Act did bar the suit and dismissed the complaint.
- The district court also denied Pelfresne's motion to amend his complaint to add constitutional claims.
- Pelfresne (appellant) appealed the dismissal and the denial of his motion to amend to the U.S. Court of Appeals for the Seventh Circuit, with the Village of Williams Bay as appellee.
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Issue:
Does a state court judgment docket card that lists only a monetary award, but omits a related equitable order to raze buildings, provide sufficient constructive notice to a subsequent purchaser to place them in privity with the judgment debtor for purposes of the Anti-Injunction Act?
Opinions:
Majority - Posner, Circuit Judge.
No. A judgment docket card that fails to mention an equitable order does not provide constructive notice of that order, and therefore, does not by itself establish privity. The Anti-Injunction Act only bars federal suits from parties to a state proceeding or those in privity with them. Privity for a subsequent purchaser turns on whether they had notice of the prior judgment. Under Wisconsin law, a lien affecting real estate is created by what is 'properly docketed' on the judgment docket card. Since the raze order was not mentioned on the card, it was not properly docketed, did not create a lien, and was not in the chain of title for the purposes of providing constructive notice. However, the docket card, which did list a monetary judgment against three prior owners, may have been sufficient to place a purchaser on 'inquiry notice'—a duty to conduct a reasonable investigation which would have revealed the full judgment. Whether Pelfresne had inquiry notice or actual notice are questions of fact to be determined by the district court on remand.
Analysis:
This decision clarifies the intersection of the federal Anti-Injunction Act and state real property law, establishing that the determination of 'privity' is not a federal standard but is governed by the applicable state's law of notice. The court's distinction between legally sufficient 'constructive notice' and the fact-based standard of 'inquiry notice' is significant. It demonstrates that even if a public recording is technically deficient, a subsequent purchaser may still be bound by a judgment if the recorded information contained enough 'red flags' to trigger a duty to investigate further. This places a burden of diligence on purchasers and their title searchers beyond merely checking for perfectly recorded instruments.
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