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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

Case Summary:

Debtor’s ex-spouse filed a claim for a domestic support obligation in Debtor’s Chapter 13 bankruptcy case. The subject of the claim was a home equity line of credit obligation that was secured by the ex-spouse/claimant’s homestead. The Debtor incurred the obligation under the line of credit, and although his ex-spouse was co-liable for it, the Debtor was ordered to pay the obligation under the parties’ divorce judgment. The Debtor failed make all payments due under the line of credit, and the lender filed a foreclosure against the ex-spouse’s homestead. She was forced to cure the deficiency herself, and thereafter obtained a contempt judgment against the Debtor for failing to pay the line of credit obligation. Her claim in the bankruptcy case was that the obligation which she paid was a domestic support obligation under the parties’ judgment of divorce. The Court agreed and held that her claim was nondischargeable. Principally, the divorce judgment specified that the obligation was a nondischargeable domestic support obligation and was assigned to the Debtor in lieu of maintenance. Testimony of the parties also supported the conclusion that the obligation was meant to be a domestic support obligation.

Statute/Rule References:

11 U.S.C. § 523(a)(5) -- Nondischargeability - Domestic Support Obligation
11 U.S.C. § 523(a)(15) -- Nondischargeability - Marital Obligations
11 U.S.C. § 1328(a)(2) -- Discharge
Fed. R. Bankr. P. 3001(f)

Key Terms:

Claims – Allowance
Domestic Support Obligation
Marital Settlement Agreement
Nondischargeable Debt


Case Summary:

Creditor Newtek Small Business Finance, LLC, filed a motion for relief from stay to foreclose against real property owned by the Debtor for cause, including lack of adequate protection, and on the basis that there was no equity in the property and it wasn’t necessary for an effective reorganization. Prior to the hearing, the Debtor stipulated that there was no equity in the property. But the Debtor argued that Newtek over-valued the property, and that based on an actual, lower valuation, the Debtor could afford adequate protection payments. Debtor also argued that his primary source of income derived from a business that he operated out of the property, and thus it was necessary for an effective reorganization.

The Court ruled for Newtek. First, Newtek presented testimony from an appraiser and an appraisal report establishing the value of the property as significantly higher than what the Debtor listed in its schedules. The Debtor attempted to counter Newtek’s evidence on valuation through personal testimony, but the weight of the evidence, including a bid at a recent sheriff’s sale, persuaded the Court that the true value of the property aligned with Newtek’s valuation. Thus, the amount of adequate protection that the Debtor would be required to pay was much higher than he could afford, and cause was shown in support of lifting the stay. Second, the Debtor stipulated that there was no equity in the property, and the evidence showed that the property wasn’t necessary for an effective reorganization, because no such reorganization was reasonably in prospect. More than four months into the case, the Debtor had not employed an appraiser, had not filed a disclosure statement or plan, and was delinquent on taxes. Plus, based on profit and loss statements from the Debtor and his related entities, there was no evidence that the Debtor would be able to present a plan that satisfied the best interest of creditors.

Statutes and Rules:

11 U.S.C. § 362(d)(1), (2)

Key Terms:

Adequate Protection
Automatic Stay
Equity
Valuation


Case Summary:

Creditor Newtek Small Business Finance, LLC, filed a motion for relief from stay to foreclose on certain real property owned by the Debtor. The Debtor objected, and the Court scheduled a final hearing. The Court issued a standard final hearing order, requiring the parties to exchange and submit witness and exhibit lists no less than 7 days before the date set for hearing. Newtek timely submitted its witness and exhibit lists. The Debtor filed its lists 1 day late. On its witness list, the Debtor stated that an appraiser, Darin Voegeli, would be testifying as to the value of the real property. And on its exhibit list, Debtor stated that it intended to introduce an appraisal prepared by Mr. Voegeli “when received.” Newtek moved to prohibit the Debtor from calling Mr. Voegeli as a witness and prohibit the Debtor from introducing the appraisal as evidence. The Court granted the motion.  Newtek did not have sufficient opportunity to review the appraisal or any opinions. There was no explanation for the failure to comply with the Court’s final hearing order and no suggestion of excusable neglect.

Statutes & Rules:

Fed. R. Evid. 403 -- Excluding Relevant Evidence for Prejudice, Confusion, Waste of Time, or Other Reasons
Fed. R. Evid. 702 -- Testimony by Expert Witnesses
Fed. R. Evid. 703 -- Bases of an Expert

Key Terms:

Evidence
Motion in Limine


Case Summary:
Debtor claimed an interest in a life insurance contract as an exempt annuity under Wis. Stat. § 815.18(3)(f) and claimed an interest in tools as exempt under section 815.18(3)(b). The Debtor first argued that the annuity exemption statute was ambiguous, and that the Debtor in fact owned the annuity. Second, he argued that the exemption statute regarding tools was also ambiguous and that it didn’t require active use of tools in a business to qualify for the exemption. The Trustee objected, first arguing that the funds derived from the life insurance contract did not qualify as an exempt annuity, and second, that the tools were not used in a business of the Debtor, and thus also did not qualify for an exemption. This Court ruled for the Trustee and found that the Debtor could not use the claimed exemptions. First, the Court found that the life insurance contract was unambiguous: the Debtor’s late mother was listed as the owner, not the Debtor. Under the plain language of the statute, Debtor did not qualify for the exemption because he was not the owner. And second, there was no evidence that the Debtor used the tools in connection with any business in the past 4 years, or that he was going to use the tools in a business in the future. Thus, he also couldn’t claim the tools as exempt.

Statutes/Rule References:

Wis. Stat. § 815.18(3)(b) -- Business property
Wis. Stat. § 815.18(3)(f) -- Annuities
Fed. R. Bankr. P. 4003(c) -- Burden of proof

Key Terms:

Business and Farm Property Exemption
Exemptions
Life Insurance and Annuities Exemption
State Law Exemptions


Case Summary:
This Court entered an order avoiding 21st Mortgage's lien on the Warfels' manufactured home. 21st Mortgage appealed the ruling. While the appeal was pending, the parties agreed to settle the matter; the Warfels would grant 21st Mortgage a replacement lien on their property in exchange for postpetition financing. To accomplish the refinance, the parties needed to vacate the bankruptcy court's order; however, the bankruptcy court lacked jurisdiction to do so since the appeal was pending in front of the district court. So, the parties moved under Federal Rule of Bankruptcy Procedure 8008 for an indicative ruling. They filed a notice in the district court that they were seeking an indicative ruling from the bankruptcy court that would vacate the order and reinstate the lien. This Court issued an indicative ruling stating that it would grant the parties' request to vacate the order on remand, and the district court subsequently remanded the case and closed the appeal. The parties then submitted a joint motion to obtain postpetition credit.

Rule References:
Fed. R. Bankr. P. 8008 -- Indicative Rulings

Key Terms:
Indicative Ruling


Case Summary:
Debtor Jennifer Nordgaard moved to receive funds held in her counsel’s trust account as exempt funds, and the Trustee objected and separately filed an objection to the Debtor’s claim of exemptions. Debtor divorced her ex-spouse several months before filing her petition. As part of the divorce, her husband was ordered to refinance the couples’ marital homestead and pay the Debtor her interest in the homestead’s equity. Her husband failed to refinance the property. Debtor listed the funds that she was entitled to receive from her husband on her Schedule C as exempt under Wisconsin’s homestead exemption and a retirement account exemption. Two months after filing, the divorce court ordered the ex-spouse to pay Debtor the funds, which were then held in Debtor’s counsel’s trust account. After the funds were received, the Debtor quitclaimed her interest in the property to her ex-spouse. Debtor then moved to receive the funds. The Trustee objected. The Court ruled for the Debtor regarding the homestead exemption, and against the Debtor regarding the retirement account exemption. The Debtor was entitled to receive the funds as exempt homestead proceeds because they derived from the Debtor’s former homestead and the Debtor did not relinquish her interest in the property until after the funds were paid. But the funds were not properly exempted as retirement funds because they were not held in a retirement account, they were not employer sponsored, and there was no assertion that the account the funds were held in qualified as an IRA under the Internal Revenue Code.

Statute References:
11 U.S.C. § 522(b)(2) -- Exemptions – State Law
Wis. Stat. § 815.18 -- Exemptions (Homestead and Retirement Benefits)
Wis. Stat. § 815.20 -- Homestead Exemption
Wis. Stat. § 990.01(14)

Key Terms:
Exemptions
Homestead Exemption
Retirement Account Exemption


Case Summary:
On remand from the district court, the Court ruled in favor of the Warfels and avoided 21st Mortgage’s lien. The Court first determined that joinder of the standing trustee under Fed. R. Bankr. P. 7021 was proper. Second, the Court found that the trustee’s joinder was not precluded by undue prejudice to 21st Mortgage or unsecured creditors. There was no prejudice to 21st Mortgage because it was aware of all the facts and legal arguments that would be presented by the Debtors and had already litigated the issues at trial. There also wasn’t prejudice to unsecured creditors because they were still receiving at least as much as they would in a hypothetical chapter 7 liquidation. Third, the Court found that the complaint was not time barred by section 546 because the Trustee was simply being joined as a party, and the amended complaint adding him sufficiently related back to the original complaint. Finally, since no new facts were presented, the Court reiterated its original finding that 21st Mortgage’s lien was avoidable under section 544. The Court highlighted important facets of the evidence that indicated that the home was intended to be a permanent homestead and not moveable.

Statute/Rule References:
11 U.S.C. § 544(b) -- Lien Avoidance
11 U.S.C. § 546 -- Limitations on Avoiding Powers
Fed. R. Bankr. P. 7021 -- Misjoinder and Non-Joinder of Parties
Fed. R. Civ. P. 21 -- Misjoinder and Nonjoinder of Parties
Wis. Stat. § 101.9218(1), (2) -- Applicability of manufactured home security provisions

Key Terms:
Joinder
Lien Avoidance


Case Summary:
Debtors Amy and Dennis Eliason sued the Bank of North Dakota to have Amy’s student loan debt discharged as an undue hardship under Code section 523(a)(8). Amy took out the loans to attend Globe University in Eau Claire, with the goal of becoming a certified medical assistant. Amy was misled about the medical assistant program at Globe and was thus never able to obtain her medical assistant certification. The Court discharged the loans. Applying the Brunner test, it was clear that Amy and Dennis maintained a minimal standard of living. Most of their expenses were at or below the national standards for a household of three. Second, the Court found that Amy and Dennis have never been able to significantly increase their earning potential, and each have only held low-skilled hourly wage positions for most of the past decade. Dennis has been found administratively disabled for several years and cannot work more than a couple of hours each day. And Amy, having never obtained her medical assistant certification, has been working only part-time, low-wage positions, in between periods of unemployment due to a complicated pregnancy and the deaths of her parents. Also, since the loans were in default, the Bank of North Dakota conceded that if they were found nondischargeable, the entire balance would be due and owing after the case was closed. Lastly, the Court found that the Debtors had made a good faith effort to stay on top of their loans but were simply unable to. The Debtors received at least two deferments and a forbearance during the loan repayment period. They were on a zero-dollar monthly payment schedule for their federal student loans. In sum, the Debtors satisfied the prongs of Brunner, and the loans were discharged.

Statute/Rule References:
11 U.S.C. § 523(a)(8) -- Nondischargeability - student loans

Key Terms:
Brunner Test
Student Loans
Undue Hardship


Judge Rachel M. Blise

Case Summary:
The Court held that a Subchapter V debtor-in-possession was required to obtain court approval before employing and paying an accountant to prepare its tax returns during bankruptcy.  Section 327(a) specifically includes “accountant” in the list of professionals that a trustee or debtor-in-possession must seek court approval to employ, and the Seventh Circuit has held that employment under § 327(a) is a condition precedent to payment of professionals under § 330(a).  The debtor argued that employment under § 327(a) was not required because the accountant’s services were not central to the administration of the bankruptcy estate and because the debtor would need to prepare tax returns regardless of the pendency of the bankruptcy.  The court disagreed, holding that the debtor-in-possession was required to file tax returns and that the accountant assisted with that duty.  The Court also rejected the debtor’s arguments that the accountant’s fees could be paid under § 363(c) as an ordinary course business expense and that the permissive language in § 327(a) means that court approval is not mandatory.  Finally, the Court held that the statutes requiring prior authorization to pay professionals do not have a de minimus exception.  Though the accountant’s fee was only $500, the debtor was still required to employ and pay the account under §§ 327(a) and 330(a).  The Court ordered the accountant to disgorge all fees received after the petition date.

Statute/Rule References:
11 U.S.C. § 327
11 U.S.C. § 330(a)
11 U.S.C. § 363(c)

Key Terms:
Professional(s), accountant


Case Summary:
The chapter 7 trustee filed a three-count complaint under 11 U.S.C. § 544(b) and Wisconsin Statutes §§ 242.04(1)(a), 242.04(1)(b), and 242.05(1) against the debtor and his non-filing spouse to recover an allegedly fraudulent transfer of the couple’s residence, which the debtor and his spouse transferred to only the spouse via quit claim deed in 2017.  The parties disputed whether the trustee’s claims were timely.  Section 544(b) allows a trustee to avoid a transfer of property that is voidable under applicable law by a creditor holding an allowable unsecured claim.  Under the applicable Wisconsin law, the statute of limitations for a fraudulent transfer claim is generally one or four years.  However, if the IRS is the creditor seeking to avoid a fraudulent transfer, then the applicable reach-back period is 10 years under 26 U.S.C. § 6502(a)(1).  The Court determined that the trustee could step into the shoes of the IRS and take advantage of the longer limitations period available to the IRS.  The Court reasoned that there is no limitation in § 544(b), and that the claim should be allowed to proceed if the underlying creditor (here, the IRS) could avoid the transfer under the law applicable to that creditor.  Conversely, a claim should not be allowed to proceed if the underlying creditor could not pursue the claim.  The Court also held that the debtor-transferor was a proper party defendant to the fraudulent transfer claim because a transferor could be made a party to a fraudulent transfer action if he had retained some benefit in the property after it was transferred.  Finally, the Court held that the trustee’s allegations were insufficient under Civil Rules 8 and 9 and on that basis granted the motions to dismiss.  The Court held that the trustee had pleaded insufficient facts to support an inference that the debtor had transferred the property with actual intent to defraud his creditors.  The Court also held that the trustee’s constructive fraudulent transfer claim was insufficient because the trustee had not pleaded facts regarding the value, or an estimate of the value, of the property at the time of the transfer and had not pleaded facts demonstrating that the debtor was insolvent at the time of or because of the transfer.  The Court granted the trustee leave to amend the complaint.

Statute/Rules References:
11 U.S.C. § 544(b) -- Trustee as Successor to Certain Creditors
26 U.S.C. § 6502(a)(1) -- Collection After Assessment
Wis. Stat. §§ 242.04(1)(a), (1)(b) -- Transfers Fraudulent as to Present and Future Creditors
Wis. Stat. § 242.05(1) -- Transfers Fraudulent as to Present Creditors

Key Terms:
Fraudulent Transfer


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