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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

Judge Robert D. Martin

Case No. 03-12010-13

The debtors filed a Chapter 13 plan which provided for the debtors to make direct monthly payments to the Department of Education on their student loans. The Department of Education consented to a reduced payment on the student loans “to enhance the feasibility of the plan.” The trustee objected to the plan on the grounds that the plan unfairly discriminated against a class of unsecured creditors and that the plan proposed direct payments to the Department of Education in an amount less than that called for by the pre-bankruptcy contract.

The debtors’ Chapter 13 plan was not confirmed. It was determined that the debtors’ plan failed to comply with 11 U.S.C. §1322(b)(5) and failed to demonstrate that its treatment of the Department of Education claim was not unfair discrimination between classed of unsecured claims. Furthermore, it was determined that the direct payment to the Department of Education was impermissible.

11 U.S.C. § 523(a)(8) -- Nondischargeability - student loans

Case No. 03-12802-13

The debtor held a one-third tenancy in common in farmland where he resided. Alliance Bank received judgment against the debtor and subsequently held an execution sale on the property, purchasing debtor’s interest in the real estate. Debtor filed for Chapter 13 bankruptcy one year later, claiming a homestead exemption of $1.00 for the property. Debtor proposed to sell a portion of the property to fund his Chapter 13 plan. Alliance objected to the plan contending that the debtor had no interest in the real estate. Debtor also moved to avoid the judicial liens of Alliance, and Alliance objected.
The debtor did not oppose the execution sale up to and through its execution, nor did he assert an exempt homestead claim. After the sale took place but prior to his bankruptcy filing, debtor then filed a motion in circuit court challenging the execution sale. The circuit court declined to hear the motion stating without written ruling or order that it had no power to hear a post-execution sale argument.
An evidentiary hearing was then held on the confirmation of the plan, the debtor’s motion to avoid the lien of Alliance, and Alliance’s objection to the claimed homestead exemption. Those issues were taken under advisement.
It was determined that the execution sale was voided and the lien held by Alliance be reduced by the $1.00 claimed exemption. The plan was not confirmed. Debtor was given 20 days to amend the plan. Alliance then moved for relief from stay. It was determined that because the proposed plan could not be confirmed, the property was not necessary to debtor’s effective reorganization. The debtor had not provided adequate protection of Alliance’s interest in the property. The stay was lifted to conduct a new execution sale or pursue the lien consistent with the memorandum decision.

11 U.S.C. § 101(37) -- Definitions - "lien"
11 U.S.C. § 108 -- Extension of time
11 U.S.C. § 522(d) -- Exemptions - federal
11 U.S.C. § 522(f) -- Lien avoidance
11 U.S.C. § 522(g) -- Exemptions
11 U.S.C. § 522(h) -- Exemptions
11 U.S.C. § 541 -- Property of the estate
11 U.S.C. § 544 -- Trustee as lien creditor
11 U.S.C. § 1303 -- Rights and powers of debtor
11 U.S.C. § 1325 -- Confirmation of Chapter 13 plan

Fed. R. Bankr. P. Rule 1009 -- Amendment of Petition and Schedules

Wis. Stat. § 815.21 -- Homestead; How to set apart after levy
Wis. Stat. § 815.39 -- Execution sale; redemption of real estate
Wis. Stat.§ 815.40 -- Execution sale; who may redeem
Wis. Stat.§ 815.55 -- Execution sale; deed when to issue; limitation

Case No. 92-13751-13

The debtor filed a Chapter 13 plan in November, 1992. Great Lakes Higher Education Corporation, a predecessor to movant Educational Credit Management Corporation, then filed an unsecured claim in the amount of $31,530.08 for educational loans made between 1981 through 1987 to the debtor. The plan was completed in 1997. A discharge of debtor’s debts was entered using an outdated discharge order form which did not accurately reflect the law regarding the dischargeability of student loans. The case was reopened and Educational Credit Management Corporation filed its motion to reconsider the discharge order.
It was determined that the discharge order was incorrect and misstated the law. Those portions of the order were ruled void and a new discharge order was entered in the form currently in use.

11 U.S.C.§ 523(a)(8) -- Nondischargeability - student loans
11 U.S.C. §: 1328(a) -- Discharge

Case No. 00-34080-7

The Debtor is a graduate of the University of Wisconsin Law School who began her study of law at Marquette University School of Law (“Marquette”). In her application for admission to the Wisconsin bar, she was required to present a transcript from Marquette. Marquette conditioned its delivery of a transcript upon Debtor’s payment of past due student loans. Debtor had yet to pay Marquette or to receive her Marquette transcript and brought a motion to hold Marquette in violation of her bankruptcy discharge injunction.

As part of her student loan package at Marquette, Debtor signed a promissory note under which Marquette disbursed funds toward tuition costs, and to the Debtor directly. After receiving the loan funds and prior to the “drop deadline,” Debtor withdrew from Marquette. Marquette reversed the tuition charge leaving Debtor owing the amount paid to her directly. Marquette received one nominal payment from the Debtor in April, 1999. After receiving no further payments, the account was turned over to a collection agency.

Debtor filed a Chapter 7 petition in September, 2000. She included the debt to Marquette on her schedules designating it as “tuition.” The collection agency ceased its collection efforts. In January, 2001 Debtor received her discharge.

Debtor contends that her debt to Marquette was not a student loan and that it had been discharged. She argued that Marquette was violating the permanent injunction provision of 11 U.S.C. § 524(a). She is incorrect. Marquette is subrogated to the government entities which it reimbursed for Debtor’s student loans, and its methods of collecting from Debtor are unexceptionable as a matter of bankruptcy law.

It was determined that Marquette complied with the requirements established by the U.S. Department of Education with respect to the loans made to Debtor. As a subrogee, Marquette was entitled to all of the U.S. Department of Education’s rights against the Debtor, including the right to collect the non-dischargeable loan. Marquette was not required to release the transcripts to Debtor. Debtor’s arguments based upon Marquette’s subsequent characterization of the funds owed to it by Debtor are of no merit. The true nature of the obligation, not how it was described after it became past due, governs how the obligation is viewed in bankruptcy.

11 U.S.C. § 523(a)(8) -- Nondischargeability - student loans
11 U.S.C. §: 524(a)
34 CFR § 668.22(g) and (g)(2) -- Treatment of title IV funds when a student withdraws
34 CFR § 685.300 -- Agreements between an eligible school and the Secretary for participation in the Direct Loan Program
34 CFR § 685.306 -- Payment of a refund or return of title IV, HEA program funds to the Secretary

Case No. 02-16113-11
In March, 2003 this court issued a memorandum decision and judgment awarding Plaintiff, Western Wisconsin Water, Inc. d/b/a LaCrosse Premium Water (“Western”) damages against the Defendant, Quality Beverages of Wisconsin, Inc. (“Quality”) for Quality’s breach of contract to give Western a first right of refusal to acquire certain accounts. In mitigating its damages, Western recovered 400 of the 552 accounts that Quality should have offered. Western was awarded sums for lost profits based on the 152 accounts that Western did not recover and in mitigation expenses.
Western moved to amend the judgment on two theories. First, Western argued that profits from the resale of the 400 accounts that it recovered should have been included in its damages because the market for the accounts evaporated after Quality’s actions. Western stated that it showed that it could resell the 400 accounts. They further argued that the court should add to Western’s damages the difference between the value of all 552 accounts before Quality’s breach and the value of the 400 accounts recovered after Quality’s breach.
Second, Western contended that its mitigation expenses were higher than the estimated net profit Western would have realized in the future from its mitigation efforts and produced exhibits detailing its actual out-of-pocket expense in establishing its own distributorship.
Western’s first claim amounted to a request for damages that Western did not make successfully at trial. Western sought the profits that it claimed it could not realize from the resale of the recovered accounts because of the effects of Quality’s actions on the market. At trial, however, Western did not establish that Quality’s actions affected the market in the manner and to the extent claimed. Western also failed to demonstrate that the expected net profit is in fact the market price. It was determined that the potential windfall of retaining the recovered accounts and receiving the profits from the resale of the recovered accounts is inconsistent with Wisconsin’s application of the expectation interest in breaches of contract.
As to Western’s second claim, it was determined that mitigation damages in a breach of contract are an injured party’s actual expenditures made in reasonable efforts to minimize its losses. In arguing its motion, some confusion arose as to Western’s reference to its “net mitigation amount” and to its “start up costs”. It appears that a manifest factual error had been made and Western’s claimed actual cost of mitigation incurred
 
Fed. R. Evid  Rule 59 -- New trials

Case No. 02-16114-11
At the close of trial in this proceeding it was determined that the 1997 contract between the Plaintiff, Western Wisconsin Water, Inc. d/b/a LaCrosse Premium Water (“Western”), and the Defendant, Quality Beverages of Wisconsin, Inc. (“Quality”), gave Western a “first right of refusal” to acquire (1) all of the 469 accounts sold to Quality; and (2) all growth attributable to those accounts. Quality’s failure to offer to sell Western the accounts constituted a breach of the contract. Western was entitled to compensation for losses necessarily flowing from that breach. Those losses included anticipated profits from the resale of the accounts and from exclusive distributorship agreements into which Western would have entered. Western was also entitled to recover expenses incurred in mitigating its losses and damages as well as judgment for the account payable from Quality.
The contract provided Western a sort of option to purchase 552 accounts from Quality when Quality sold those accounts and others to Crystal Canyons in 2001. That number includes the accounts sold under the 1997 contract (469) and the proportionate increase in Quality’s accounts attributable to those original accounts (83). After the breach, Western mitigated its damages by acquiring 400 of the 552 accounts subject to its option. As to those 400 accounts, Western was entitled to be reimbursed its costs of mitigation.

It was determined that on the remaining 152 accounts that Western did not acquire, it was entitled to recover its lost profits. Based upon the calculations outlined in the memorandum decision, Plaintiff was granted judgment against the Defendants.

Case No. 02-11588-13
The Debtor’s son-in-law, Ronald Vogt, had been managing VATW, a satellite operation of Monroe Ag-Tech (“Monroe”). Monroe advanced operating funds on a monthly basis to VATW, including an amount designated as Mr. Vogt’s salary. Badger State Bank (“Badger”) permitted VATW to pay Mr. Vogt from accounts in which Badger had a security interest. In early 2001, VATW began having financial difficulties. Monroe stopped advancing operating funds and Mr. Vogt stopped receiving his salary. By August, 2001, VATW was insolvent and owed Mr. Vogt a substantial amount of unpaid salary. VATW closed its doors to the public and surrendered its assets to Badger. However, the assets were insufficient to satisfy VATW’s debt.
At the time VATW was closing, Mr. Vogt issued three checks in the amount of $29,000 drawn on VATW’s account to the Debtor to repay money lent to him. The parties agreed that the amount owed to Mr. Vogt was more than $29,000.
In January 2002, Badger sued the Debtor in Circuit Court seeking to recover the transfers as fraudulent under state law. The Debtor was unable to bear the costs associated with defending herself and filed for Chapter 13 protection. Her schedules did not include assets under her husband’s exclusive control.
Badger presented an elaborate objection to confirmation of Debtor’s Chapter 13 plan. Badger claimed to be a creditor of the Debtor by virtue of her having received a fraudulent transfer of property from a company at a time when that company was indebted to Badger. Badger had no other claims against Debtor. If Badger were entitled to recover the transferred property from the Debtor, complicated issues would arise as to whether the Debtor’s plan was in the creditors’ best interest.
The Debtor denied that a fraudulent transfer occurred and that Badger had a claim against her estate. She argued that neither she nor her creditors had any rights to property under her husband’s exclusive control pursuant to a marital property agreement that she and her husband signed in 1995. Badger claimed that the marital property agreement was too vague to be enforced.
It was determined that Badger’s standing to object to the plan depended upon the Debtor’s receipt of a fraudulent transfer. Badger’s transfer was not fraudulent and the Debtor was not obligated to Badger and Badger did not have standing to object to her plan. Thus, Badger’s objection based on the marital property agreement was not explored.
Wis. Stat. § 242 -- Fraudulent conveyance
 

Case No. 01-34985-13

The debtors filed their Chapter 7 petition on August 8, 2001. An attorney for the trustee was appointed. The debtors valued certain owned real estate. The trustee’s attorney investigated that value and found that the county tax assessor valued the property substantially higher and informed the debtors. The debtors then moved to convert their case to Chapter 13 and their motion was granted. The trustee’s attorney objected to confirmation of the plan because it failed to meet the best interest of creditors’ test. The debtors amended their plan before the final confirmation hearing was held. Meanwhile attorneys fees were incurred on behalf of the trustee preparing for the hearings, hiring an appraiser, and examining the debtors at their § 341 meeting.

In December, 2002 the trustee’s attorney moved for an allowance of an administrative claim for services rendered in connection with the bankruptcy case and debtors objected. The Chapter 13 trustee did not object.

At their motion hearing, trustee’s attorney argued that it was entitled to administrative expense priority under U.S.C. § 503(b)(1). Trustee’s attorney filed a brief supporting their motion. Debtors did not file a brief.

It was determined that trustee’s attorney objected to confirmation and incurred post-conversion costs and expenses, based upon its pre-conversion investigation of the value of debtors’ real estate. The post-conversion costs and expenses were intertwined with the pre-conversion services that trustee’s attorney rendered and are reasonable in light of the benefit to creditors. Post-conversion costs and expenses should be treated as administrative expenses.

11 U.S.C.  327 -- Employment of professionals
11 U.S.C. § 329 -- Debtor's transactions with attorneys
11 U.S.C. § 330 -- Compensation of professionals
11 U.S.C. § 330 (a)(4)(A) and (B) -- Compensation of officers
11 U.S.C. § 348 -- Conversion
11 U.S.C. §503 -- Administrative expenses
11 U.S.C. § 507(a)(1) -- Priorities
11 U.S.C. § 507(b) -- Priorities
11 U.S.C. § 726 -- Distribution of property of estate
11 U.S.C. § 1306 -- Property of the Estate
11 U.S.C. § 1322(a)(2)

Fed. R. Bankr. P.  Rule 2016 (a) -- Application for compensation of reimbursement
Fed. R. Bankr. P. Rule 2016 (b) -- Disclosure of compensation paid or promised to attorney for debtor

Wisconsin Supreme Court Rule 20:1:1 -- Comptenence
Wisconsin Supreme Court Rule 20:3:3 -- Candor toward the tribunal
 

Judge Thomas S. Utschig

Case No. 99-33737-BKC-SHF-11
Liquidating trustee of corporate debtor brought an action against the debtor’s former officers and directors, alleging that they “looted” the company of millions of dollars through a variety of fraudulent schemes. The court found that the evidence established a pattern of activity designed to “hinder, delay, or defraud” creditors, and that the CEO of the company was demonstrably responsible for looting the company’s assets. The trustee failed to present sufficient evidence regarding the other officers and directors.

Case No. 02-16039-7
Debtor was entitled to an exemption for retirement funds received pursuant to Qualified Domestic Relations Order executed in accordance with the debtor’s divorce decree. The funds were held in an “ERISA-qualified” pension plan and therefore excluded from the debtor’s bankruptcy estate; even if it were part of the bankruptcy estate, it fell within the Wisconsin exemption for retirement assets.

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