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Opinions

The Western District of Wisconsin offers a database of opinions for the years 1986 to present, listed by year and judge. For a more detailed search, enter a keyword, statute, rule or case number in the search box above.

Opinions are also available on the Government Printing Office website for Appellate, District and Bankruptcy cases. The content of this collection dates back to April 2004, though searchable electronic holdings for some courts may be incomplete for this earlier time period.

For a direct link to the Western Wisconsin Bankruptcy Court on-line opinions, visit this link.

Available Decisions:

  • Chief Judge Catherine J. Furay -- 2013 - present
  • Judge William V. Altenberger -- 2016 - present
  • Judge Rachel M. Blise -- 2021 - present
  • Judge William H. Frawley -- 1973 - 1986
  • Judge G. Michael Halfenger -- 2020 - present
  • Judge Beth E. Hanan -- 2023 - present
  • Judge Brett H. Ludwig -- 2017 - 2020
  • Judge Thomas M. Lynch -- 2018 - present
  • Judge Robert D. Martin -- 1990 - 2016
  • Judge Katherine M. Perhach -- 2020 - present
  • Judge Thomas S. Utschig -- 1986 - 2012

Chief Judge Catherine J. Furay

Aaron Holzhueter v. David J. Groth, et al. (In re Holzhueter), Adv. No. 16-0079, Case No. 16-13134-11 (10/18/2017) (575 B.R. 444) -- Judge Catherine J. Furay 10/18/2017

Case Summary:
The Debtor filed this adversary proceeding seeking a declaratory judgment that he was not liable to the Defendants and that the Defendants' claims were disallowed against him and the bankruptcy estate. The Debtor's father ran a Ponzi scheme through his insurance business, where Debtor had been an employee and director. The Defendants represent a small portion of the total number of individuals and families who were defrauded in that Ponzi scheme. The Defendants filed a counterclaim for a determination that their claims were nondischargeable on the ground that the Debtor was involved in the Ponzi scheme and therefore owed them a nondischargeable debt under 11 U.S.C. §§ 523(a)(2)(A) and 523(a)(6). The court granted summary judgment to the Debtor on the section 523(a)(2)(A) claim on the grounds that: (1) the Defendants failed to allege the Debtor "obtained" money through fraud, and (2) the Defendants failed to produce evidence that would show that the Debtor made any false representations, intended to commit fraud, or committed "actual fraud." The Court granted summary judgment to the Debtor on the section 523(a)(6) claim on the ground that Defendants failed to produce evidence that the Debtor acted willfully and maliciously.

Statute/Rule References:
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability – Fraud Pretenses, False Representation or Fraud
11 U.S.C. § 523(a)(6) -- Nondischargeability – Willful and Malicious Injury

Key Terms:
Actual Fraud
Civil Theft
Conversion
False Representation
Nondischargeable Debt
Ponzi Scheme

In re First Phoenix-Weston, LLC, and FPG & LCD, LLC, Case No. 16-12820-11 and 16-12821-11 (Jointly Administered) (08/14/2017) (575 B.R. 828) -- Judge Catherine J. Furay 08/14/2017

Case Summary:
Prior to filing this Chapter 11, Debtor entered into a Loan Agreement with Sabra Phoenix Wisconsin, LLC. The loan provided the Debtor with financing necessary for the completion of a construction project. Simultaneously with the Loan Agreement, Debtor and Sabra Phoenix entered into an Option Agreement. Debtor subsequently filed in bankruptcy and Sabra filed a proof of claim for $17,773,438.77, which included damages for Debtor's alleged breach of the Option Agreement. The Debtor objected to the claim insofar as it sought damages related to the Option. The Court granted Debtor's objection and determined that Sabra was not entitled to a claim for breach of the Option Agreement. In so holding, the Court found that the Option served as additional security for the Loan Agreement, that there was insufficient consideration in the transaction, that the Option impermissibly clogged Weston's right of redemption of its mortgage, and that the Option Agreement was unconscionable.

Statute/Rule References:
11 U.S.C. § 502 -- Allowance of Claims or Interests

Key Terms:
Additional Security
Clogging the Right of Redemption
Consideration
Unconscionability

C. Brate Bryant, Elizabeth A. Bryant Living Trust, and C. Brate Bryant 1990 Revocable Trust v. Paul L. Clements and Tina M. Clements (In re Clements), Adv. No. 17-0012, Case No. 16-13848-7 (07/27/2017) (570 B.R. 803) -- Judge Catherine J. Furay 07/27/2017

Case Summary:
Plaintiffs filed an action against the Debtor in state court on May 13, 2009. The state court found Debtors had obtained money in violation of state securities law and issued a default judgement against them for $974,104.46. The Plaintiffs then brought this adversary seeking a determination that the state court judgment is nondischargeable under 11 U.S.C. § 523(a)(19). Defendants responded that the state court judgment was invalid. The Court held the state court judgment was valid and enforceable against Debtors and nondischargeable.

Statute/Rule References:
11 U.S.C. § 523(a)(19) -- Nondischargeability - Violation of Securities Laws

Key Terms:
Nondischargeable Debt

Aaron Holzhueter v. David J. Groth, et al. (In re Holzueter), Adv. No. 16-0079, Case No. 16-13134-11 (07/18/2017) (571 B.R. 812) -- Judge Catherine J. Furay 07/18/2017

Case Summary:
Debtor filed a voluntary Chapter 11 petition on September 12, 2016. He filed an adversary complaint on September 14, 2016, against Defendants David J. and Gale I. Groth, David J. and Judith A. Heinecke, James G. Pritchard, John W. and Patricia Tesch, and Barbara L. Wegner (collectively as the "State Court Plaintiffs") seeking a declaratory judgment that he is not liable to these individuals, that their claims be disallowed, and that any debt owed to them is dischargeable. The State Court Plaintiffs filed an Answer and Counterclaim to the Debtor's Complaint. They seek a determination that under 11 U.S.C. §§ 523(a)(2), (a)(6), and (a)(19) that certain debts are nondischargeable. The State Court Plaintiffs filed a motion requesting that the Court abstain from determining issues related to liability under 11 U.S.C. § 523(a)(19), or in the alternative that a non-bankruptcy tribunal must determine liability under 11 U.S.C. § 523(a)(19). The Court denied the State Court Plaintiffs' motion for permissive abstention. In addition, the Court sided with the growing number of bankruptcy courts that reason section 523(a)(19)'s plain language does not divest the Court from fully adjudicating liability, damages, and exception to discharge in a section 523(a)(19)-based adversary proceeding.

Statute/Rule References:
11 U.S.C. § 523(a)(19) -- Nondischargeability - Violation of Securities Laws
28 U.S.C. § 1334 -- Abstention

Key Terms:
Abstention

In re Manor, Case No. 17-10248-13 (06/27/2017) (569 B.R. 764) -- Judge Catherine J. Furay 06/27/2017

Case Summary:
Debtor purchased a new Dodge Ram truck. As part of the purchase, she traded in a Chevrolet Silverado. Debtor owed more on the Silverado than its trade-in value, resulting in negative equity of $6,343.65, which she included in the financing of the new Dodge Ram. Members Cooperative Credit Union held a purchase money security interest in the Dodge Ram, and filed a proof of claim in Debtor's bankruptcy. The parties agreed the Dodge Ram was purchased within 910 days prior to Debtor's bankruptcy petition. Debtor objected to the Credit Union's claim seeking to cram down the amount of the Credit Union's to the value of the Dodge Ram. Following the Seventh Circuit's decision in In re Howard, 597 F.3d 852 (7th Cir. 2010), the Court overruled the Debtor's objection concluding a purchase money security interest in a vehicle includes negative equity.

Statute/Rule References:
11 U.S.C. § 506(a) -- Determination of Secured Status
11 U.S.C. § 1325(a) -- Confirmation of Plan - 910-day Hanging Paragraph

Key Terms:
Cramdown
Negative Equity

In re Strom, Case No. 16-12464-7 (06/21/2017) (569 B.R. 494) -- Judge Catherine J. Furay 06/21/2017

Case Summary:
Debtor filed a voluntary Chapter 7 petition on July 18, 2016. The Trustee entered a Final Report on December 20, 2016. Creditor Lakeview Care Partners objected to the Trustee’s Final Report seeking a Court Order to disapprove the report and require the Trustee to pursue collection of its debt from the Debtor’s ex-spouse. Lakeview argued the debt was nondischargeable under 11 U.S.C. § 523(a)(15). Pursuant to a marital settlement agreement, the Debtor’s ex-spouse was assigned the Lakeview debt. The ex-spouse filed bankruptcy on December 29, 2016. She received a discharge of her Lakeview debt on April 25, 2016. The instant Debtor also listed Lakeview as a creditor on his Schedules. The Court held the debt to Lakeview was dischargeable. The ex-spouse incurred a “new debt” when the state court granted the marital settlement agreement. Her debt to Lakeview was discharged with her bankruptcy. Similarly, when the Debtor received a discharge, his liability on that same debt was also discharged.

Statute/Rule References:
11 U.S.C. § 523(a)(5) -- Nondischargeability – Divorce Decrees
11 U.S.C. § 523(a)(15) -- Nondischargeability – Marital Obligations

Key Terms:
Marital Settlement Agreement
Nondischargeable Debt

Peggy A. Berg v. Social Security Administration (In re Berg), Adv. No. 16-0089, Case No. 14-13435-7 (06/15/2017) (569 B.R. 755) -- Judge Catherine J. Furay 06/15/2017

Case Summary:
Debtor filed a Chapter 13 petition on August 7, 2014. The Court entered a final decree on January 21, 2015. On August 4, 2016, Debtor moved to reopen her bankruptcy and filed the present adversary case to unwind the Social Security Administration’s (“SSA”) prepetition setoff of her social security disability benefits. The Court concluded under 11 U.S.C. § 553(b) that the SSA improved its insufficient position during the 90-day setoff period prescribed under the statute.

Statute/Rule References:
11 U.S.C. § 522(h) -- Exemptions
11 U.S.C. § 553 -- Setoff

Key Terms:
Setoff

Aaron J. Lofton and Linda L. Lofton v. Beneficial Financial I Inc. and Portfolio Recovery Associates LLC (In re Lofton), Adv. No. 16-0041, Case No. 15-14093-13 (06/05/2017) (569 B.R. 747) -- Judge Catherine J. Furay 06/05/2017

Case Summary:
Plaintiffs/debtors filed an adversary complaint against servicer Beneficial Financial I Inc. (“Beneficial”) alleging Beneficial impermissibly transferred servicing of their note and mortgage in violation of the Real Estate Settlement Procedures Act’s (“RESPA”) notice requirements. Following a foreclosure judgment, the Plaintiffs stated that they attempted to contact Beneficial to negotiate a workout agreement on their second mortgage. Beneficial assumed servicing of the Plaintiffs’ second note and mortgage when it acquired and/or merged with Beneficial Financial Wisconsin Inc. In addition, the Plaintiffs argued that Beneficial improperly and fraudulently denied it owned or serviced their loan, which constituted a violation under Wis. Stat. § 224.77(1)(m). That state law makes it unlawful for a mortgage banker to engage in improper, fraudulent or dishonest dealing. Beneficial moved for summary judgment. The Court granted summary judgment in favor of Beneficial because the Plaintiffs did not present any evidence that they sustained actual damages.

Statute/Rule References:
12 U.S.C. § 2605(b) -- Servicing of Mortgage Loans - Notice of Transferor of Loan Servicing at Time of Transfer
12 U.S.C. § 2605(f) -- Servicing of Mortgage Loans - Damages and Costs
12 C.F.R. § 1024.33(b) -- Real Estate Settlement Procedures Act – Notices of Transfer of Loan Servicing
Wis. Stat. § 224.77 -- Prohibited Acts and Practices of Mortgage Bankers, Mortgage Loan Originators, Mortgage Brokers
Wis. Stat. § 224.80 -- Penalties and Private Cause of Action

Key Terms:
RESPA

Brian P. Petska and Lori J. Petska v. Jeffrey J. Hazuga (In re Hazuga), Adv. No. 17-0002, Case No. 16-13326-7 (05/11/2017) -- Judge Catherine J. Furay 05/11/2017

Case Summary:
Plaintiffs filed an adversary complaint against Debtor seeking an exception to discharge under 11 U.S.C. §§ 523(a)(2) and (a)(6). The Plaintiffs moved the Court to permissively abstain under 28 U.S.C. § 1334(c)(1). The Plaintiffs agreed that whether a debt is nondischargeable in a bankruptcy case is a “core” proceeding as defined by 28 U.S.C. § 157(b)(2)(I). The Court concluded that since the Plaintiffs’ Complaint raised issues of nondischargeability under 11 U.S.C. § 523, it had authority to decide the issue of dischargeability. Since Stern v. Marshall, 564 U.S. 462 (2011), the United States Supreme Court in Wellness Int’l Network, Ltd. v. Sharif, __ U.S. __, 135 S. Ct. 1932 (2015), clarified that bankruptcy courts are permitted to adjudicate liability and damages existing under non-bankruptcy law provided the parties consent to the court’s jurisdiction. The Court concluded it had both jurisdictional and constitutional authority to determine whether there was a non-dischargeable debt.

Statute/Rule References:
28 U.S.C. § 157(a)
28 U.S.C. § 1334 -- Abstention

Key Terms:
Abstention

Brenda L. Zeddun v. Francis F. Fiore, Jr. (In re Szadziewicz), Adv. No. 16-0015, Case No. 14-10716-7 (04/17/2017) -- Judge Catherine J. Furay 04/17/2017

Case Summary:
Trustee filed an adversary complaint against Fiore alleging conveyance of a home constituted a fraudulent transfer. On August 23, 2016, the Trustee moved to dismiss her Complaint with prejudice. Fiore moved for sanctions under Fed. R. Bankr. P. 9011 arguing the Trustee’s Complaint lacked an evidentiary foundation. The Court denied Fiore’s motion for sanctions concluding Fiore did not comply with Rule 9011’s safe-harbor. In addition, the Court concluded Fiore’s motion for sanction was untimely. While Rule 9011 does not set a specific time for bringing a sanctions motion, in the Seventh Circuit, a party should file a motion for sanctions “as soon as practicable after discovery of a Rule 11 violation.” Kaplan v. Zenner, 956 F.2d 149, 151 (7th Cir. 1992). Fiore asserted the Trustee violated Rule 9011 on February 22, 2016, but did not move for sanctions until September 7, 2016, over six months after the first Complaint and over four months after the Amended Complaint. Accordingly, the Court denied Fiore’s motion for sanctions.

Statute/Rule References:
Fed. R. Bankr. P. 9011 -- Sanctions
11 U.S.C. § 544(b)
Wis. Stat. § 242.04 -- Transfers Fraudulent as to Present and Future Creditors

Key Terms:
Safe Harbor

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