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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 Bankrupty 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 Brett H. Ludwig--2017-present
  • Judge Robert D. Martin (retired)--1990-2016
  • Judge Thomas S. Utschig (retired)--1986-2012

Chief Judge Catherine J. Furay

Bankr. Case No. 16-12464-7

 

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.

 

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

Adv. Case No. 16-41, Bankr. Case No. 15-14093-13
 
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.
Code 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
Wisconsin Statutes:
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

Adv. Case No. 17-2, Bankr. Case No. 16-13326-7
 
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.
Code References:
28 U.S.C. § 1334 -- Abstention
28 U.S.C. § 157(a)\

Key Word:
Abstention

Zeddun v. Fiore (In re Szadziewicz), Adv. Case No. 16-15, Bankr. Case No. 14-10716-7 (Bankr. W.D. Wis. April 17, 2017).

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.  

Code/Rule References:

Fed. R. Bankr. P. 9011 -- Sanctions
11 U.S.C. § 544(b)

Wisconsin Statutes:
Wis. Stat. § 242.04 – Transfers fraudulent as to present and future creditors

Key Word:
Safe Harbor

Adv. Case No. 16-25, Bankr. Case No. 16-10249-7
 
Plaintiff Hellenbrand Glass, LLC filed an adversary complaint seeking a determination that a debt evidenced by a state court judgment was nondischargeable under 11 U.S.C. § 523(a)(4). The parties filed a stipulation agreeing inter alia that $15,457.03 was nondischargeable. They also stipulated that the state court trebled this amount pursuant to Wis. Stat §§ 895.446 and 943.20. The only issue before the court was whether the treble damage portion of the debt was dischargeable. The parties agreed there were no material issues of fact and the court ordered briefs. To resolve the state court action, the Plaintiff and Debtor Scott G. Pulvermacher entered into a settlement agreement intending to resolve the Plaintiff’s claim for theft by contractor Plaintiff. The court concluded that the trust created by Wis. Stat. § 779.02(5) establishes the type of express statutory trust contemplated by 11 U.S.C. § 523(a)(4). Accordingly, the court found the entire debt nondischargeable reasoning a party’s breach of a settlement agreement disposing of the underlying action does not erase the history of the debt’s origin.
11 U.S.C. § 523(a)(4) -- Nondischargeability - fraud or defalcation in fiduciary capacity
Wis. Stat. § 779.02(5) -- Theft by contractor
Wis. Stat. § 895.446 -- Action for property damage or loss
Wis. Stat. § 943.20 -- Theft

Bankr. Case No. 16-12556-13

Debtor moved the court to impose sanctions under Rule 9011 and 28 U.S.C. §1927 against counsel for mortgage creditor alleging three (3) separate pleadings violated Rule 9011. The Debtor alleged opposing counsel deliberately misidentified the mortgage creditor in an effort to "conceal the authority under which [counsel] purport[ed] to engage in litigation activities . . . ." The Court concluded sanctions were not warranted because (1) the mortgage creditor filed the pleadings in an effort to protect its security interest in collateral; (2) the mortgage creditor demonstrated a right to payment in state foreclosure proceedings; and (3) the mortgage creditor proposed a legal theory creating a prima facie case as to why the case should be dismissed.

Fed. R. Bankr. P. 9011 -- Sanctions
28 U.S.C. § 1927 -- Counsel’s liability for excessive costs
11 U.S.C. § 1322(b)(2) -- Modification of rights of secured claimants
 

Case Number: 16-12556-13
Debtor Sondra K. Lisse filed a Chapter 13 Plan. Mortgage creditor HSBC objected to confirmation. At a telephonic hearing, the Court permitted discovery. HSBC requested an extension of time; Debtor’s counsel agreed under certain conditions that were not agreeable to HSBC. HSBC then moved to dismiss Debtor’s case. Debtor moved for sanctions under Fed. R. Bankr. P. 7037 or, in the alternative, to determine the sufficiency of responses to her discovery requests, and compel responses. Digging through the cascade of voluminous filings, the Court found Debtor failed to certify that she conferred or attempted to confer in good faith with HSBC prior to bring her motion to compel because she offered HSBC an ultimatum.
Fed. R. Bankr. P. Rule 7033 -- Interrogatories to Parties
Fed. R. Bankr. P. Rule 7036(a)(6) -- Motion Requesting the Sufficiency of an Answer or Objection
Fed. R. Bankr. P. Rule 7037 -- Failure to Make Discovery; Sanctions

Case Number: 15-10704-7
Plaintiff Katherine Hebl brought this action to have her arbitration award of $310,000 declared nondischargeable under 11 U.S.C. § 523(a)(2)(A) or, in the alternative, section 523(a)(4). Plaintiff alleged her business partner Bradley Windeshausen over the course of three and one-half years embezzled funds from a bar in which they operated as equal partners. At a continued hearing, the Court granted in part and denied in part Defendant’s motion to dismiss, finding Plaintiff failed to established section 523(a)(2)(A)’s intent element, but made a prima facie case for liability under section 523(a)(4). The Court found the debt dischargeable because the Plaintiff failed to establish a fiduciary relationship under section 523(a)(4), and failed to establish the element of intent. In addition, the Court found Plaintiff did not establish the existence of a “debt.”
 
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - fraud
11 U.S.C. § 523(a)(4) -- Nondischargeability - embezzlement
11 U.S.C. § 523(a)(4) -- Nondischargeability - fraud or defalcation in fiduciary capacity
11 U.S.C. § 523(a)(4) -- Nondischargeability - larceny
Wis. Stat. § 183.0402 -- Duties of managers and members
 

Case Number: 15-13449-13
Debtor filed a voluntary Chapter 7 petition on September 23, 2015. She converted her case to a Chapter 13 on December 1, 2015, and the Court entered an order to that effect. Consequently, a new meeting of creditors under section 341(a) was set. Notice of the section 341(a) meeting was sent to all creditors, and a new claims bar date was set for April 14, 2016, by operation of Rule 3002(c). The Debtor then filed a Chapter 13 plan and schedules listing specific treatment of a secured creditor. Notice of the plan was sent to all creditors. With no objections, the Court confirmed the Debtor’s plan. The April 14, 2016, claims bar date came and passed without the secured creditor filing a proof of claim. Subsequently, the additional 30 days permitting the Debtor to file a proof of claim also came and passed without the filing of a proof of claim on the secured creditor’s behalf. Debtor filed a proof of claim for the secured creditor on October 26, 2016, approximately six months after the claims bar date. The Trustee requested a hearing. The Court denied the proof of claim, but upheld and enforced the terms and provisions of the confirmed plan. By distinguishing In re Pajian, 785 F.3d 1161 (7th Cir. 2015), and In re Hrubec, 544 B.R. 397 (Bankr. N.D. Ill. 2016), the Court concluded that while the better practice would have been for the secured creditor (or the Debtor or Trustee on its behalf) to file a claim, section 1327(a) binds the debtor and the creditor to the terms of the plan. And, importantly, section 1326(a) directs the trustee to distribute payments in accordance with the plan without referencing Rules 3002 and 3021. Finally, when there is specific notice of the secured creditor’s claim in a proposed plan, plan confirmation, under certain circumstances, serves as a method to determine a secured claim’s treatment.
 
11 U.S.C. § 502 -- Allowance of claims
11 U.S.C. § 1326 -- Payments
11 U.S.C. § 1327 -- Effect of confirmation
Fed.R. Bankr. P. Rule 3002 -- Filing proof of claim or interest
Fed.R. Bankr. P. Rule 3021 --  Distribution under plan
 

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