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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.

Chief Judge Catherine J. Furay

In re Sloniker, Case 25-10673-7 (5/21/25) -- Judge Catherine J. Furay 05/21/2025

Case Summary:
Debtors filed a voluntary Chapter 7 bankruptcy, and creditor John Deere Financial Services moved for relief from the automatic stay to enforce its contractual rights regarding a tractor and lawn mower deck. Deere submitted evidence that it had security interests in the collateral and that Debtors had failed to make postpetition payments. Debtors’ scheduled value of the collateral showed that there was no equity in the equipment. Debtors, however, maintained that they were sovereign citizens, that they were the secured creditors, that all their bills are paid by a trust the government holds under Mrs. Sloniker’s Social Security number, and that unspecified fraud had been committed. The Court refused to entertain Debtors’ arguments based on their sovereign-citizenship theory. The Court granted Deere’s motion and ordered the Chapter 7 trustee to abandon the collateral. Also, the Court noted that stay relief may not be necessary in the first place under section 362(c)(3). But the Court acknowledged that seeking stay relief was best practice.

Statute/Rule References:
11 U.S.C. § 362(c)(3)
11 U.S.C. § 362(d)
11 U.S.C. § 554 -- Abandonment of property of the estate

Key Terms:
Abandonment
Automatic Stay
Equity
Sovereign Citizen

In re Sloniker, Case No. 25-10673-7 (5/21/25) -- Judge Catherine J. Furay 05/21/2025

Case Summary:
Debtors filed prior case in June 2024. They both received a discharge. But after their discharge, the Chapter 7 trustee moved to compel production of certain documents. The Court held a hearing on the motion to compel in November, at which Mrs. Sloniker stated that she wouldn’t produce certain trust documents, even if ordered to do so by the Court. The Court ordered the Debtors to produce the documents, which they ultimately failed to do. The U.S. Trustee filed an adversary proceeding seeking revocation of Mrs. Sloniker’s discharge for failing to comply with the Court’s order. The Court ruled in favor of the U.S. Trustee and revoked Mrs. Sloniker’s discharge. Mr. Justo’s discharge remained intact. Later, the Chapter 7 trustee moved to dismiss the prior case for failure to comply with the Court-ordered motion to compel. The Court granted the motion and dismissed that case in March 2025. The Debtors then filed this case a week later. The U.S. Trustee moved to dismiss, arguing that the Debtors were ineligible to be debtors under section 109(g) for having a prior case dismissed within the past 180 days for failure to comply with a Court order. The Court held a hearing on the motion at which counsel for the U.S. Trustee and the Debtors each appeared in person. The Court granted the U.S. Trustee’s motion and dismissed the case as to Mrs. Sloniker under section 109(g). The case wasn’t dismissed as to Mr. Justo, but the Court noted that he was ineligible for a discharge under section 727(a)(8) and provided him time to decide whether he wants to remain in the case.

Statute/Rule References:
11 U.S.C. § 109(g) -- Who may be a debtor
11 U.S.C. § 727(a)(8) -- Nondischargeability – previous discharge

Key Terms:
Discharge
Eligibility

In re Conway, Case No. 24-10126-7 (5/9/2025) -- Judge Catherine J. Furay 05/09/2025

Case Summary:
Debtors George and Ellen Conway claimed a $150,000 exemption in proceeds from the prepetition sale of their homestead. Chapter 7 Trustee Brian Hart objected to their exemption. Creditor Greenwich Business Capital had obtained a default judgment against George Conway and his entity and was seeking to attach the judgment to Debtors’ homestead. Trying to avoid liability and on advice of counsel, George Conway quit claimed his interest in the homestead to Ellen Conway. Greenwich filed a UCC financing statement with the Dane County Register of Deeds. Ellen tried to sell the property to a third party, but the UCC was identified as a potential cloud on title. The title agency required the Debtors to enter into a secured indemnity agreement which allowed the title company to keep the sale proceeds in trust until the UCC was extinguished or otherwise disposed of. Debtors filed their petition while the title company was in possession of the proceeds. The Court denied the homestead exemption for George but allowed Ellen to claim the exemption. George willfully relinquished his ownership to Ellen well in advance of the petition and thus was not an "owner" of the homestead and did not have a legal or equitable interest in the proceeds on the petition date. With respect to Ellen, even though the secured indemnity agreement gave legal ownership and possession of the proceeds to the title company, the intent of the agreement was not to permanently deprive Ellen of the proceeds, and she retained a contingent interest. Thus, she could claim the exemption.

Statute/Rule References:
11 U.S.C. § 105 -- Power of court
11 U.S.C. § 522 -- Exemptions
Fed. R. Bankr. P. 4003(c) -- Burden of proof
Wis. Stat. § 706.01(4) -- Meaning of “conveyance”
Wis. Stat. § 766.63 -- Mixed property
Wis. Stat. § 815.20 -- Homestead exemption

Key Terms:
Exemptions
Homestead Exemption

In re Conway, Case No. 24-10126-7 (5/9/2025) -- Judge Catherine J. Furay 05/09/2025

Case Summary:
Debtors George and Ellen Conway sought to convert their Chapter 7 case to Chapter 13. They moved to convert more than eight months after they filed their case and after the Chapter 7 trustee had initiated three adversary proceedings to recover assets for their estate. The Debtors' motion was filed in conjunction with a proposed settlement agreement with a creditor, Greenwich Business Capital, which had sued Debtors for alleged fraud and objected to their claimed exemption. This Court determined that Greenwich wasn't properly secured and denied the settlement. Debtors continued to seek conversion, but the Court denied their motion. Administration of the Debtors' case was already well underway, and the Debtors' apparent motives seeking conversion were not to benefit creditors, but rather to attempt to shield assets from administration by the Chapter 7 trustee. Debtors had not demonstrated good faith, and Debtors' proposed Chapter 13 plan was not in the best interest of creditors.

Statute/Rule References:
11 U.S.C. § 704 -- Duties of trustee
11 U.S.C. § 706 -- Conversion
11 U.S.C. § 1307 -- Conversion or dismissal
11 U.S.C. § 1325 -- Confirmation of plan

Key Terms:
Conversion
Good Faith
Time Value of Money

Cerny, et al. v. Old National Bank, et al. (In re Cerny), Adv. No. 24-00061, Case No. 24-10322-13 (03/21/2025) -- Judge Catherine J. Furay 03/21/2025

Case Summary:
Debtors Gary and Barbara Cerny filed a pro se action against their mortgage lender, Old National Bank; Old National's state court lawyers, Eckberg Lammers, P.C.; and State Court Judge Jeffrey S. Kuglitsch over a July 2023 foreclosure judgment. Plaintiffs argued that Old National wasn't the proper holder of their mortgage, and thus the foreclosure judgment should be declared null and void. They also alleged violations of the Uniform Commercial Code and the United States Constitution. Each Defendant moved to dismiss the case based on various theories, which the Court granted. First, this Court determined that it did not have jurisdiction to hear the complaint under the Rooker-Feldman doctrine, along with principles of full faith and credit, and claim and issue preclusion. Next, although the complaint alleged fraud, it failed to state allegations of fraud with particularity and thus couldn't withstand Defendants' motions to dismiss under Fed. R. Civ. P. 12(b). Plaintiffs' claims that Old National wasn't the proper holder of the note under the U.C.C. were also without merit. Finally, even if this Court had jurisdiction to hear the complaint, Judge Kuglitsch would be immune from liability in both his professional and personal capacities.

Key Terms:
Full Faith and Credit
Judicial Immunity
Jurisdiction
Rooker-Feldman Doctrine

Statute/Rule References:
28 U.S.C. § 157 -- Jurisdiction
28 U.S.C. § 1334 -- Bankruptcy cases and proceedings
Fed. R. Civ. P. 12(b)(6) -- Failure to state a claim
Fed. R. Civ. P. 9(b) -- Fraud or mistake

Heyerholm, et al. v. Johnson, et al. (In re Johnson), Adv. No. 22-00049, Case No. 22-11548-7 (3/4/2025) -- Judge Catherine J. Furay 03/04/2025

Case Summary:
The District Court remanded this case to apply the appropriate standard for “maliciousness” under Code section 523(a)(6). This Court decided that Defendants' actions weren't malicious because there was no evidence that they consciously disregarded their duty, or that their actions lacked just cause or excuse. Since this Court had initially made an oral ruling, the decision began by itemizing specific findings of fact from trial. This Court then determined that the nature of the duty to be examined was relevant because, even though this Court already found Defendants' actions to be willful, the facts initially determined at trial would not have necessarily been sufficient to find that an intentional tort had occurred. Next, Defendants' actions weren't malicious because there was no evidence that they consciously disregarded their duty of care. The record showed that alleged mechanical issues with their boat were infrequent, and that the issue that occurred on the day Plaintiff was injured was new and unpredictable. Thus, their assumption that the boat would operate as normal was reasonable. Defendant was also attempting to align his conduct with his duty by moving the boat away from Plaintiff when the accident occurred. Plaintiffs also failed to establish a clear ordinary standard of care that Defendants allegedly violated. Finally, the record showed that Defendants acted with just cause and excuse because they were attempting to move the boat away from Plaintiff in an effort to prevent harm.

Statute Reference:
11 U.S.C. § 523(a)(6) -- Nondischargeability - willful and malicious injury

Key Terms:
Duty
Nondischargeability
Remand
Willful and Malicious Injury

In re Conway, Case No. 24-10126-7 (1/22/2025) -- Judge Catherine J. Furay 01/22/2025

Case Summary:
Debtors moved to approve settlement with a creditor, proposing to pay the creditor from proceeds held in escrow held by a title company. The settlement required the Debtors to convert their case from Chapter 7 to Chapter 13, and to treat the creditor as a secured claimant in the Chapter 13 plan. But before conversion, the Chapter 7 Trustee of the Debtors’ estate filed an adversary proceeding seeking a determination that the creditor was unsecured. The Court ruled in the Trustee’s favor. Thus, the Court then denied the Debtors’ motion to approve settlement because the Court had already determined that the creditor was unsecured, and because the Debtors couldn’t settle claims using estate property.

Statute/Rule References:
11 U.S.C. § 541 -- Property of the Estate
Fed. R. Bankr. P. 9019(a) -- Compromise or Settlement

Key Terms:
Property of the Estate
Settlement

Brian A. Hart, Chapter 7 Trustee v. Greenwich Business Capital, LLC (In re Conway), Adv. No. 24-00034, Case No. 24-10126-7 (12/19/2024) -- Judge Catherine J. Furay 12/19/2024

Case Summary:
Chapter 7 Trustee Brian Hart moved for summary judgment seeking to avoid a lien claimed by Defendant Greenwich Business Capital. Alternatively, Trustee Hart requested an order that any potential lien would be an avoidable preference. The Court granted his motion. The parties stipulated that Defendant failed to docket a foreign judgment on the Dane County judgment and lien docket before the Debtors sold their real property in that county. Thus, by operation of Wisconsin statute, the Defendant did not have a lien on the property when it was sold. Nonetheless, Defendant argued that since it filed a UCC financing statement with the register of deeds, it should be afforded an equitable lien. But the Court disagreed – Defendant could not invoke equity to protect its alleged interest when the statutory procedure for obtaining a lien was available to it. Also, any equitable interest could not defeat the interest of a Chapter 7 trustee, who is treated as a properly secured judgment lien creditor under the Code. Finally, the Court agreed with Trustee Hart that, to the extent that a later-filed foreign judgment case filed by Defendant gave it an interest in proceeds from the sale of the property, such an interest would be an avoidable preference.

Statutes/Rule References:
11 U.S.C. § 544 -- Lien avoidance
11 U.S.C. § 547 -- Preferences
Wis. Stat. § 409.102 -- Definition of “secured party”
Wis. Stat. § 806.15 -- Lien of judgment; priority

Key Terms:
Avoidance
Equitable Lien
Foreign Judgment
Judgment Lien
Preference

Judge Rachel M. Blise

In re Bizeau, Case No. 24-11074 (03/21/2025) -- Judge Rachel M. Blise 03/21/2025

Case Summary:
After the United States Trustee (UST) moved to dismiss the debtor's chapter 7 case on the grounds that there was a presumption of abuse under 11 U.S.C. § 707(b), the debtor amended his schedules to include a $425,088.66 non-consumer debt owed to the SBA Disaster Loan Servicing Center. The SBA Debt was based on a guarantee signed by the debtor's non-filing spouse for a loan related to her insurance business. With the additional obligation added to his scheduled debts, the debtor certified that his debts were not primarily consumer debts and he was not subject to any presumption of abuse in § 707(b). The UST then argued that neither the debtor nor his property were liable for the SBA Debt because the debtor's non-filing spouse received a chapter 7 discharge in late 2023. Although the debtor did not sign the SBA loan documents, he argued that he and/or his property were liable for the debt under Wisconsin law. The Court concluded that the debtor was not personally liable to the SBA because he did not sign or otherwise agree to be bound by the loan documents evidencing the SBA Debt and no other statute or law made him personally liable for the debt; the debtor's individual property could not be used to satisfy the SBA Debt because he was not an incurring or obligated spouse; and the debtor's marital property could not be used to satisfy the SBA Debt because the discharge injunction entered in his non-filing spouse's case prevented collection of the SBA Debt from the couple's marital property. Because the SBA did not have a right to payment from the debtor or any of his property, the SBA did not have a claim in the debtor's case and the SBA Debt was not properly included on the debtor's schedules. Without the SBA Debt, the debtor's debts were “primarily consumer debts,” and the debtor was subject to the requirements of § 707(b).

Statute/Rule References:
11 U.S.C. § 541(a)(2)
11 U.S.C. § 707(b)
Wis. Stat. § 766.55

Key Terms:
Motion to Dismiss
Primarily Consumer Debts
Marital Property Act

Badalov, et al. v. Buzhunashvili et al (In re Buzhunashvili, et al.), Adv. Case No. 24-00054, Case No. 24-10209-7 (02/06/2025) -- Judge Rachel M. Blise 02/06/2025

Case Summary:
The plaintiffs filed an adversary proceeding requesting a declaration of nondischargeability under 11 U.S.C. § 523(a)(2) and seeking relief on three related counts. The debtor answered the complaint, but the joint debtor moved to dismiss the claims against her, arguing that the plaintiffs had not sufficiently alleged the existence of an underlying debt. The plaintiffs argued in response that the Supreme Court’s decision in Bartenwerfer v. Buckley, 598 U.S. 69 (2023), rendered the debt nondischargeable based on the agency relationship between the debtor and the joint debtor. The Court granted the motion to dismiss. The Court held that a claim under § 523(a)(2) requires a plaintiff to plead facts sufficient to support the existence of an underlying debt, in addition to facts sufficient to support the elements of nondischargeability under § 523(a)(2). In Bartenwerfer v. Buckley, a state court had already determined that the joint debtor was liable on an underlying debt, and the issue was whether the debt could be nondischargeable if the joint debtor was not the primary fraudster. In this case, in contrast, there was no determination as to the existence of an underlying prepetition debt, and the plaintiffs did not plead sufficient facts to establish that the joint debtor was liable to the plaintiffs on a prepetition debt.

Statute/Rule References:
11 U.S.C. § 523(a)(2)(A) - Nondischargeability
Fed. R. Civ. P. 12(b)(6) - Motion to Dismiss

Key Terms:
Motion to Dismiss
Nondischargeable Debt

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