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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.

Judge Robert D. Martin

In re Herbst, Case No. 12-11044-13 (04/11/2012) (469 B.R. 299) -- Judge Robert D. Martin 04/11/2012

Case Summary:
The Chapter 13 Debtor alleged that Talmer Bank & Trust willfully violated the automatic stay by refusing to return equipment it repossessed prepetition. The Bank had exercised its rights under a security agreement and repossessed the Debtor’s equipment pursuant to a default judgment and writ of replevin. The Bankruptcy Court held that the Bank violated 11 U.S.C. § 362(a)(3) by exercising control over property of the bankruptcy estate. The equipment had not yet been sold or transferred, and no evidence of a contract for disposition was presented. Therefore, under Wis. Stat. § 409.623(3) and Wis. Stat. § 409.617(a), the Debtor retained rights in the equipment even after the bank repossessed it. Further, the judgment of replevin did not extinguish the Debtor’s legal and equitable interests in the equipment. Therefore, it remained property of the Estate and subject to the automatic stay. Finding the violation to be willful, the Court held the Bank in contempt until it returned the equipment.

Statute/Rule References:
11 U.S.C. § 362(a)(3)
11 U.S.C. § 362(k)(1)
Wis. Stat. § 409.617(a)
Wis. Stat. § 409.623(3)

Key Terms:
Property of the Estate
Willful Violation
Automatic Stay
Collateral
Replevin

Associated Bank, N.A. v. Jonathan L. Graham and Veronica L. Graham (In re Graham), Adv. No. 11-0105, Case No. 11-10930-7 (02/16/2012) (472 B.R. 524) -- Judge Robert D. Martin 02/16/2012

Case Summary:
Associated Bank erroneously deposited $64,467.67 into the Debtors’ personal account, and the Debtors spent the funds. The Bank alleged that the amount the Debtors owed was non-dischargeable under 11 U.S.C. § 523(a)(2)(A) and 11 U.S.C. § 523(a)(6). The Bankruptcy Court held that the elements of 11 U.S.C. § 523(a)(2)(A) were not met because the money was not obtained by false pretenses. The Bank also failed to meet its burden of proof under 11 U.S.C. § 523(a)(6). While the evidence supported an inference that the Debtors knew the deposit was made in error, it also supported an inference that the Debtors believed the deposit was part of an expected inheritance. The Bank failed to establish the time period when the Debtors knew they were spending money that did not belong to them. It was therefore impossible to determine what portion of debt was based on a willful and malicious injury. The Court held that the debt owed to the Bank was dischargeable.

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

Key Terms:
Willful and Malicious - Defined
Deposit
Error

Claire Ann Resop, Trustee v. Julie Anne Alberta McCoy et al. (In re McCoy), Adv No. 11-0090, Case No. 10-17916-7 (12/21/2011) (464 B.R. 832) -- Judge Robert D. Martin 12/21/2011

Case Summary:
The Trustee sought turnover of the Debtor’s interest in a trust, as well as turnover of an annual trust payment to which the Debtor was entitled. The Bankruptcy Court held that the Debtor’s interest in the Trust was not part of the bankruptcy estate because the trust was an enforceable spendthrift trust under Wisconsin law. The Court further held that the Trustee was not entitled to the annual payment, notwithstanding a Wisconsin statute that authorized judgment creditors to apply for principal payments of a spendthrift trust when they have become due or payable. Because the Trustee of the Trust had discretion to withhold the annual payment from the Debtor, it was not “due or payable,” and the Bankruptcy Trustee was not entitled to turnover. The Court granted summary judgment in favor of the Debtor.

Statute/Rule References:
11 U.S.C. § 523(a)(15) -- Nondischargeability - Marital Obligations
11 U.S.C. § 524 -- Discharge Injunction
11 U.S.C. § 541(c)(2)
Wis. Stat. § 701.06 -- Spendthrift Provisions and Rights of Creditors of Beneficiaries

Key Terms:
Discharge 
Divorce Decrees - Post Discharge Enforcement
Due or Payable
Principal Payment
Specificity of Statute
Spendthrift Trust
Turnover of Property

In re Keena, Case No. 09-14663-7 (12/13/2011) -- Judge Robert D. Martin 12/13/2011

Case Summary:
The Debtors own two parcels of real estate, which are adjacent to one another. One parcel contains the Debtors’ residence, the other parcel is a vacant lot on which the Debtors occasionally hunt and gather firewood. The Debtors claimed an exemption in both parcels of land under § 522(d)(1). The Trustee filed an objection to the Debtors’ claim of homestead exemption, contending that Debtors could not claim the exemption in both their residence property and an attached vacant lot. The Bankruptcy Court granted summary judgment in favor of the Trustee, holding that the adjoining parcel of land was not property that the Debtor or a dependent of the Debtor uses as a residence, and therefore, the Debtors could not claim an exemption in that parcel under § 522(d)(1).

Statute/Rule References:
11 U.S.C. § 101(13A)
11 U.S.C. § 522(d) -- Exemptions - federal
Wis. Stat. § 990.01(13)(a)
Wis. Stat. § 990.01(14)

Key Terms:
Adjacent Property
Homestead Exemption
Principal Residence
Vacant Lot

Michael E. Kepler, Trustee v. Earl Arthur Eichline, et al. (In re Eichline), Adv. No. 11-0100, Case No. 06-10658-11 (12/13/2011) -- Judge Robert D. Martin 12/13/2011

Judge Thomas S. Utschig

Karina Amundson and Steven Lankford v. Theodore Duane Slaton and Vicki Lynn Slaton (In re Slaton), Adv. No. 10-0120, Case No. 10-10704-13 (04/06/2012) (469 B.R. 814) -- Judge Thomas S. Utschig 04/06/2012

Case Summary:
The plaintiffs alleged that the debtors fraudulently induced them to invest in an auction business. The parties had become friends after a chance meeting at a rummage sale, and their shared interests made them believe that they could operate a business together. The court found that the debtors did not make any false representations to the plaintiffs. The debtors used the plaintiffs’ investment in their partnership to pay down the secured debts of the business, but the plaintiffs were informed of this plan. There was no fiduciary relationship between the parties and the debtors’ conduct did not amount to a willful and malicious injury. However, the court found in the plaintiffs’ favor on their unjust enrichment claim, as the proceeds from the sale of the business real estate were the direct result of the plaintiffs’ investment in the business. Under the circumstances, it would be inequitable for the debtors to retain that benefit without payment to the plaintiffs.

Statute/Rule References:
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - Fraud
11 U.S.C. § 523(a)(4) -- Nondischargeability - Fraud in Fiduciary Capacity
11 U.S.C. §523(a)(6) -- Nondischargeability - Willful and Malicious Injury

Key Terms:
Fraud
Fraud - Fiduciary Capacity
Injust Enrichment
Willful and Malicious

Howard D. White, Trustee v. River Valley Bank (In re Elsemore), Adv. No. 11-0057, Case No. 10-15229-7 (03/20/2012) -- Judge Thomas S. Utschig 03/20/2012

Case Summary:
The chapter 7 trustee sought to recover an alleged preference. The defendant had received the proceeds of the sale of various assets, including several patents. The defendant subsequently obtained the patents and offered to return them to the estate in satisfaction of the preference claims. The trustee refused the offer and the defendant moved for summary judgment, arguing that under § 550(a) the trustee was only entitled to “the property transferred” if that property was actually available. The court ruled that the purpose of the statute is to restore the bankruptcy estate to the financial condition it would have enjoyed if the transfer had not occurred. As such, the statute permits bankruptcy courts the flexibility to award either the return of the property or a money judgment for its value, depending upon what would best return the estate to its pre-transfer position. The motion for summary judgment was denied.

Statute/Rule References:
11 U.S.C. § 547-- Preference
11 U.S.C. § 550 -- Recovery of Preferences

Key Terms:
Preferences

Melvyn L. Hoffman, Trustee v. Nancy Kay Fassett and Chaunda L. Fassett (In re Fassett), Adv. No. 11-0331, Case No. 11-15594-7 (03/20/2012) -- Judge Thomas S. Utschig 03/20/2012

Case Summary:
The trustee sought to recover a transfer as constructively fraudulent under § 548. The debtor transferred money to her daughter about 11 months before the bankruptcy. She withdrew the funds from a 401(k) account and placed them into her personal account prior to the transfer. The funds were intended to help the daughter buy a mobile home. The transfer was essentially a gift and the debtor received only intangible, emotional satisfaction in exchange for the funds. Further, even if the money did not lose its exempt character once it was removed from the 401(k) account, the debtor voluntarily transferred the funds to the daughter. Once the transfer is avoided by the trustee and the property is returned to the bankruptcy estate, the debtor is precluded from asserting an exemption in such assets under § 522(g)(1). Judgment was entered in the trustee’s favor.

Statute/Rule References:
11 U.S.C. § 548 -- Fraudulent Conveyance

Key Terms:
Fraudulent Conveyance

In re Singer, Case No. 08-16874-13 (03/15/2012) (469 B.R. 293) -- Judge Thomas S. Utschig 03/15/2012

Case Summary:
The debtors and their mortgage lender negotiated a forbearance agreement which contemplated that they would make reduced mortgage payments for a six-month period pending consideration of a loan modification. After the forbearance period, the lender denied the modification request and informed the debtors that they were obligated to pay the balance of the previously reduced payments. The debtors contended that those payments had been deferred to the end of the mortgage. The court found that a forbearance agreement is a contract and must be interpreted in accordance with its terms. As the agreement was drafted by the lender and was ambiguous as to the final treatment of the deferred payments, it would be construed in favor of the debtors. As such, they were entitled to treat the deferred payments as part of the unpaid balance due on the maturity date of the loan rather than as mortgage arrears which would need to be paid through the chapter 13 plan.

Statute/Rule References:
11 U.S.C. § 1322(b)(3)

Key Terms:
Contract – Rules of Construction
Loan Modification

Organic Family, LLC, et al. v. Chad L. Pawlak and Jo Ann Pawlak (In re Pawlak), Adv. No. 10-0148, Case No. 10-11787-7 (02/07/2012) (467 B.R. 462) -- Judge Thomas S. Utschig 02/07/2012

Case Summary:
Plaintiffs sought to prevent the discharge of a $1.1 million default judgment for breach of fiduciary duty by member and general manager of limited liability company. On summary judgment, the court found that the default judgment did not preclude the debtor from revisiting issues of liability for fraud or fraud in a fiduciary capacity. The plaintiffs alleged that the debtor had concealed the existence of a lucrative contract and attempted to obtain the contract for his own company. The court found that even presupposing that the original contract existed, it was illusory and the plaintiffs suffered no actual harm from the alleged fraud. The court also concluded that even construing the facts in the light most favorable to the plaintiff, the debtor’s fiduciary obligations under state law did not constitute a fiduciary capacity under bankruptcy law. Summary judgment was granted in favor of the debtor.

Statute/Rule References:
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - Fraud
11 U.S.C. § 523(a)(4) -- Nondischargeability - Fraud in Fiduciary Capacity

Key Terms:
Discharge
Fiduciary Capacity
Fraud
Fraud – Fiduciary Capacity

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