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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. 02-10821-7

The debtor-defendant owned and operated a business known at Faval, Inc. In late 1999, Faval was struggling financially. The plaintiff owned and operated a restaurant and two rental buildings and maintained steady employment. Plaintiff had known the debtor-defendant for over 40 years. In January, 2000 debtor-defendant and plaintiff met to discuss the Faval business, culminating in a payment made to debtor-defendant with a promise for more money in the future. In the period January, 2000 through May, 2001 plaintiff gave debtor-defendant in excess of $810,000 through loans, lines of credit, checks and cash to use in Faval. The parties agreed that debtor-defendant would make payments when due on plaintiff’s bank loans and begin to pay plaintiff for his personal loans once Faval became profitable.
During this time, and unknown to plaintiff, debtor-defendant adopted a number of unusual bookkeeping methods that made tracking Faval’s finances virtually impossible. Debtor-defendant did not keep a general ledger and generally relied on her memory instead of books and records. Debtor-defendant is unable to explain how loans were disbursed and even admitted to losing track of large loans made by other investors. Debtor-defendant also frequently dealt with cash in an effort to avoid a Wisconsin Department of Revenue levy for unpaid income taxes.
In January, 2001 plaintiff gave debtor-defendant his employer’s credit card number so she could purchase approximately $3,000 worth of materials from a supplier that would only accept a credit card. Debtor-defendant continued to use the credit card to purchase other supplies, incurring over $6,800 in charges.
In the spring of 2001 debtor-defendant contacted one of the banks with whom plaintiff took out a loan for Faval’s benefit and requested that the address be changed from plaintiff’s home address to debtor-defendant’s business address in an effort to save plaintiff the hassle of being notified when debtor-defendant was late in making payment. Debtor-defendant did not inform plaintiff of the request, instead, the bank contacted him seeking his authorization.
The plaintiff became concerned about debtor-defendant’s management of Faval and sought the assistance of his personal accountant to examine the Faval records. The accountant was unable to trace funds beyond their initial payment and sought bank records from debtor-defendant. Those records were not provided. A disturbing pattern of misappropriation and uncertainty as to the proper allocation of Faval funds was discovered. Debtor-defendant did not provide sufficient information to explain the many discrepancies.
In August, 2001 plaintiff’s attorney demanded that debtor-defendant repay his client $120,000 of the personal loans by the end of the month. Debtor-defendant failed to do so. In October, 2001 plaintiff then changed the locks on the building. In response, debtor-defendant ceased operations of Faval.
In February, 2002 debtor-defendant filed for Chapter 7 protection. At her first meeting of creditors debtor-defendant asserted her Fifth Amendment privilege as to her personal and business financial statements, dates on which she incurred debts to certain creditors, and the use to which she put those funds.
Plaintiff filed an adversary complaint arguing that the court should draw a negative inference from debtor-defendant’s use of the Fifth Amendment privilege and that the debt to him was non-dischargeable under 11 U.S.C. §§ 523(a)(2), (4), and (6). He also argued that debtor-defendant’s behavior warranted the denial of her discharge. In total he sought recovery of $657,700 of funds loaned to debtor-defendant.
The court granted debtor’s discharge before hearing plaintiff’s adversary proceeding. In the vast majority of cases, parties plead adequately in adversary proceedings and the clerk of court’s staff can determine whether a claim has been filed under § 727. If none has, the clerk follows the standard procedure of granting a debtor’s discharge 60 days after their first meeting of creditors as to all debts that are not the subject of a pending adversary proceeding brought under § 523. Plaintiff’s complaint alleged grounds for relief under § 523, not § 727. Thus, on August 19, 2002, following its standard procedure and without evaluating the substance of plaintiff’s claims, the court issued debtor-defendant’s discharge as to all debts not subject to a pending adversary proceeding. At trial it was then determined that the pleadings should be constructively amended to include the § 727 objections and that debtor-defendant should not have received her discharge.
Debtor-defendant’s discharge was revoked and denied pursuant to §§ 727(a)(2), (3), and (5). A money judgment in the amount of $657,700 was entered in favor of plaintiff.

11 U.S.C. § 105 -- Power of court
11 U.S.C.§ 523(a) -- Execptions to discharge
11 U.S.C. § 727 -- Discharge

Case No. 01-34625-11
Defendants filed a motion to compel the production of all documents pertaining to a stock purchase agreement and a supply agreement, the former of which was the focus of a breach of contract action against defendant. These documents contained a memorandum from counsel marked "attorney-client communication." Defendants argued that plaintiff had waived any attorney-client privilege by disclosing it to defendant. Fed. R. Civ. P. 26(b)(1) allows a court to limit discovery to the actual claims or defenses pled in a case. The court also has discretion under Fed. R. Civ P. 26(b)(2)(iii) to limit discovery if it determines that "the burden or expense of the proposed discovery outweighs its likely benefit . . . ." This court determined that even though the attorney-client privilege was waived, discovery is not compelled. Defendants' motion to compel is denied.
Fed. R. Evid. Rule 26(b)(1) -- Discovery Scope and Limits -- In General
Fed. R. Evid. Rule 26(b)(2) -- Discovery Scope and Limits -- Limitations

Case No. 01-34494-13
Estate moved for sanctions against debtor's counsel for filing a chapter 13 petition solely to harass the estate and cause it unnecessary delay. The estate had received a judgment of foreclosure against certain real property of debtor and a sheriff's sale had been scheduled On the date of the sheriff's sale debtor filed a chapter 7 petition, staying the sheriff's sale. The estate then obtained relief from stay. A second sheriff's sale was scheduled. Debtor's counsel filed a chapter 13 petition without schedules or plan shortly before the sheriff's sale was to take place. Another automatic stay was obtained. The period in which the debtor may file a payment plan ended without any plan being filed. Debtor's counsel filed a motion to withdraw as counsel citing debtor's failure to confer with him on a payment plan and to pay his retainer fee. Counsel's motion was granted and the chapter 13 case was dismissed. The estate then filed a motion for sanctions under Bankruptcy Rule 9011. The estate claims that debtor's counsel had no legal basis for filing the chapter 13 petition before a discharge was entered in the prior chapter 7 and that the debtor's sole purpose in filing the chapter 13 was to prevent the second sheriff's sale from proceeding. The estate established that debtor's counsel had violated Rule 9011. Sanctions was ordered for fees and expenses related to filing of the chapter 13 petition.

Case No. 01-30061-13

Debtor returned to this court asking that his second amended chapter 13 plan be confirmed. Debtor initially came under this court's jurisdiction as an involuntary chapter 7 debtor and subsequently converted to a chapter 13. Debtor filed a plan of reorganization and sought its confirmation. One of debtor's petitioning creditors objected to the plan on the grounds that it did not satisfy 11 U.S.C. sec. 1325(a)(3)'s good faith requirement. Supporting its argument, the creditor pointed out that debtor owes it a potentially non-dischargeable debt. It further argued that no sum would be paid to unsecured creditors under debtor's plan and that the purpose of the debtor's plan was to thwart his unsecured creditors. The trustee also raised an issue as to the plan's feasibility noting that the original plan failed to satisfy a priority tax claim. Debtor had intended to use the proceeds from the sale of his gas station to pay that priority claim, but he did not have a full right to such proceeds at that time because his ex-wife also held a security interest in the property. This court ruled that the plan could not be confirmed for its failure to meet the requirements of sec. 1322(a)(2) and sec. 507. This court, however, granted debtor leave to amend his plan to account for the priority tax claim. Debtor then obtained consent from his ex-wife to apply her share of the gas station's sale proceeds to the tax claim and filed an amended plan. The objecting creditor renewed its objection to confirmation and the trustee also objected to this amended plan because the debtor proposed to make priority claim payments directly instead of through the trustee's office. The debtor agreed to file a second amended plan responding to the trustee's objection and the trustee moved to dismiss the case. The case was then dismissed with a 14-day stay. The debtor filed the second amended plan within the 14-day stay period with an increase in payments and an extended plan length. The trustee recommended confirmation of the second amended plan, but the creditor reasserted its prior objections. This court determined that the plan could be confirmed over the objection of the creditor since it appears that debtor has made attempts to work out a repayment plan in accord with his current employment. The fact that debtor had incurred a non-dischargeable debt to the objecting creditor would not mandate a finding of bad faith. Debtor's repayment plan appears to represent his best effort to repay his creditors and satisfies the good faith requirements for confirmation.

11 U.S.C. §507(a)(1) -- Priorities
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - fraud
11 U.S.C. § 523(a)(6) -- Nondischargeability - willful and malicious injury
11 U.S.C. § 1322(a)(2)
11 U.S.C. § 1325(a)(3)
11 U.S.C. § 1325(b)

Case No. 01-30061-13
Debtor returned to this court asking that his second amended chapter 13 plan be confirmed. Debtor initially came under this court's jurisdiction as an involuntary chapter 7 debtor and subsequently converted to a chapter 13. Debtor filed a plan of reorganization and sought its confirmation. One of debtor's petitioning creditors objected to the plan on the grounds that it did not satisfy 11 U.S.C. sec. 1325(a)(3)'s good faith requirement. Supporting its argument, the creditor pointed out that debtor owes it a potentially non-dischargeable debt. It further argued that no sum would be paid to unsecured creditors under debtor's plan and that the purpose of the debtor's plan was to thwart his unsecured creditors. The trustee also raised an issue as to the plan's feasibility noting that the original plan failed to satisfy a priority tax claim. Debtor had intended to use the proceeds from the sale of his gas station to pay that priority claim, but he did not have a full right to such proceeds at that time because his ex-wife also held a security interest in the property. This court ruled that the plan could not be confirmed for its failure to meet the requirements of sec. 1322(a)(2) and sec. 507. This court, however, granted debtor leave to amend his plan to account for the priority tax claim. Debtor then obtained consent from his ex-wife to apply her share of the gas station's sale proceeds to the tax claim and filed an amended plan. The objecting creditor renewed its objection to confirmation and the trustee also objected to this amended plan because the debtor proposed to make priority claim payments directly instead of through the trustee's office. The debtor agreed to file a second amended plan responding to the trustee's objection and the trustee moved to dismiss the case. The case was then dismissed with a 14-day stay. The debtor filed the second amended plan within the 14-day stay period with an increase in payments and an extended plan length. The trustee recommended confirmation of the second amended plan, but the creditor reasserted its prior objections. This court determined that the plan could be confirmed over the objection of the creditor since it appears that debtor has made attempts to work out a repayment plan in accord with his current employment. The fact that debtor had incurred a non-dischargeable debt to the objecting creditor would not mandate a finding of bad faith. Debtor's repayment plan appears to represent his best effort to repay his creditors and satisfies the good faith requirements for confirmation.

Case No. 01-34926-13
Debtor sought to obtain credit to continue the operations of a ballroom. He eventually turned to Action Mortgage and its manager, Robert Call, for a loan. Following a strange transaction, debtor ended up the confused owner of a mortgage on a house he had never offered to purchase. Debtor also gave Action Mortgage a security interest in some construction equipment and vehicles which he owned. Debtor was unable to maintain payments on the mortgage and quitclaimed the house to Robert Call. Mr. Call took possession of the house and collected rents from the lessees who occupied it, but did not credit any amount to debtor's obligation to Action Mortgage. Debtor filed for chapter 13 relief and objected to the validity of Action Mortgage's claim against him alleging that the claim was obtained by fraud. Debtor further objected to the amount of Action Mortgage's claim arguing that the quitclaim terminated all or a significant portion of his debt. Mr. Call, on behalf of Action Mortgage, disagreed with debtor's contention and testified that the quitclaim did nothing to alter the original terms of the loan. Action Mortgage further alleged that its claim against debtor had risen to include accrued interest and filed a proof of claim in that amount. Action Mortgage also obtained a default judgment in state court for replevin of specified equipment against debtor and sought relief from the automatic stay to enforce its judgment. Debtor objected to Action Mortgage's claim and his testimony supported his allegations of fraud. He also called into question the amount owed to Action Mortgage in light of the quitclaim. The final burden of persuasion rested upon Action Mortgage to prove its claim. Action Mortgage did not present evidence sufficient to carry this burden. Debtor's objection to Action Mortgage's claim was sustained and Action Mortgage's motion for relief from stay was denied.

Case No. 01-34821-7
This case involves hypothetical discharge and its procedural requirements.  Plaintiff filed an adversary complaint to determine whether a debt was dischargeable and the debtor answered.  But the plaintiff filed the initial complaint thinking it was against debtor’s husband who has a similar first name as debtor.  Plaintiff amended the complaint by adding allegations against debtor’s husband and objecting to the hypothetical discharge of his tortious debt.  However, plaintiff did not seek the debtor’s or court’s consent before amending the complaint.  In addition, the plaintiff did not name debtor’s spouse on the amended complaint.  The time limit to object to debtor’s discharge had since passed.  Debtor filed a motion to dismiss the adversary proceeding contending that any complaint seeking to deny debtor’s spouse’s hypothetical discharge is now time barred.  Plaintiff responded by filing a motion to enlarge the time within which to bring the action under § 523(a)(6), which motion in itself is untimely but which was considered as a motion to further amend the complaint under Fed. R. Civ. P. 15(c).  It was determined that the motion to amend the complaint to name debtor’s spouse as a defendant is granted
11 U.S.C. § 523(a)(3)
11 U.S.C. § 523(a)(6) -- Nondischargeability - willful and malicious injury
11 U.S.C. § 524(a)
Fed. R. Civ. P. Rule 15(a) -- Amendments
Fed. R. Civ. P. Rule 15(c)(3)

Case No. 98-35054-7
In 1996 debtor physically attacked plaintiff.  Debtor was charged with aggravated battery with intent to cause substantial bodily harm and pled guilty.  In 1998 plaintiff commenced an intentional tort action against debtor.  Prior to judgment being rendered debtor filed her chapter 7 petition staying the tort action.  Plaintiff filed this adversary proceeding seeking summary judgment arguing that as a result of the guilty plea in the criminal action, debtor was collaterally estopped from contesting the willful and malicious nature of the injury that gave rise to the debt.  The court denied the summary judgment motion.  The parties agreed to lifting the stay to permit the state tort action to proceed to judgment, which was subsequently entered.  Plaintiff then moved for summary judgment for a second time contending that the tort judgment supports collateral estoppel and bars debtor from contesting the willful and malicious nature of her debt for purposes of § 523(a)(6).  This court determined that she was correct and granted her motion for summary judgment.
11 U.S.C § 523(a)(6) -- Nondischargeability - willful and malicious injury
28 U.S.C. § 1738 -- State and Territorial statutes and judicial proceedings: full faith and credit
Wis. Stat. § 940.19(5)

Case No. 00-34495-7
Debtors challenged claim of First American Credit Union (“FACU”). At issue is whether a car pledged as security for a direct loan also secured a credit card debt by virtue of a dragnet clause in the loan contract. Both parties moved for summary judgment based on stipulated facts. Debtors made three arguments: that FACU never explained the meaning of the dragnet clause in the contract; that they did not read the dragnet clauses and had no intention of pledging the car as security for the credit card debt, and that the dragnet clauses in the Rules and car loan contract "were in boilerplate fine print." FACU countered that the dragnet clauses were customary and ordinary provisions and that debtors’ intent to pledge the car as security interest for the credit card debt is evident from the fact that debtors received the Rules and signed the car loan contract, both of which included dragnet clauses. FACU further argued that it had no obligation to explain the meaning or effect of the dragnet clauses to debtors. It was determined that the intent of debtors to grant FACU a security interest in the car for other debts is evident from the clear language of the dragnet clauses in the Rules and the car loan contract.

Case No. 98-36236-7

This adversary proceeding was brought by the trustee against Farmers Bank to determine the validity of Farmers Bank’s security interest in proceeds from crop support contracts between debtors and the USDA.  The parties reached a stipulated resolution.  In exchange, Farmers Bank released its claim on proceeds that had been paid to the estate and the trustee agreed to assist Farmers Bank in securing unpaid proceeds that the USDA had refused to pay.  The USDA was then joined.  The USDA argued that the PFC contracts were rejected and deemed that rejection a breach of the PFC contracts, which entitled the USDA to treat the contracts as void.  The trustee and Farmers Bank argued that the PFC contracts were abandoned in the chapter 11 case, leaving nothing to be rejected either before or after the case was converted.  The PFC contracts were abandoned by a proper order in the chapter 11 case.  That abandonment removed the contracts from the chapter 11 estate and ended the bankruptcy court’s jurisdiction over them.  The abandoned status of the contracts was not altered by the conversion of the case to chapter 7.  The effect of abandonment was to return all parties to the PFC contracts to their legal positions prior to the bankruptcy filing.

11 U.S.C. § 348 -- Conversion
11 U.S.C. § 365 -- Executory contracts\
11 U.S.C. § 541 -- Property of the estate

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