U. S. Bank Nat. Assn. v. Patricia Ann Murphy, 2020AP000537

Patricia Ann Murphy and Patricia Gaffney executed a mortgage and note in 2007 and faced foreclosure; the circuit court entered summary judgment in September 2017.
This court reversed and remanded because Murphy’s affidavit alleged a fall 2014 phone call in which a servicer representative told her to stop payments while a loan modification was pending, creating a fact issue on an unclean hands defense.
Nationstar (the original servicer) later assigned its rights to U.S. Bank, the respondent here.
On remand the circuit court held an evidentiary hearing (Jan. 28, 2020) and heard testimony from Murphy, Gaffney, and a servicer representative.
The circuit court found Murphy credible that she believed partial-payment comments suggested default might be required for modification, but concluded the statements were ambiguous, Murphy still made payments, and there was insufficient evidence that the servicer’s conduct caused the default.
The court entered judgment of foreclosure; the Court of Appeals affirmed that ruling.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether defendants proved the causation element of the equitable "unclean hands" defense to bar foreclosure	U.S. Bank: defendants cannot prove the servicer’s statements caused their nonpayment; servicer evidence contradicts Murphy’s account; no equitable bar	Murphy/Gaffney: a servicer representative told Murphy to stop payments while a modification was pending, which caused default and bars relief under unclean hands	Held: Affirmed. Defendants failed to prove causation; statements were ambiguous, payments were made, and the court’s credibility and factual findings were reasonable

Security Pac. Nat. Bank v. Ginkowski, 140 Wis. 2d 332 (Wis. Ct. App. 1987) (unclean hands requires showing the defendant’s alleged misconduct caused the harm for which plaintiff seeks relief)
Timm v. Portage Cnty. Drainage Dist., 145 Wis. 2d 743 (Wis. Ct. App. 1988) (equitable relief under unclean hands is within trial court discretion)
Randall v. Randall, 235 Wis. 2d 1 (Wis. Ct. App. 2000) (appellate review of discretionary decisions requires that court examined facts, applied correct law, and reached a reasonable conclusion)
Dickman v. Vollmer, 303 Wis. 2d 241 (Wis. Ct. App. 2007) (appellate courts generally do not reweigh evidence or reassess witness credibility)