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

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

Case Summary:
Though represented by an attorney, Debtors filed two pro se motions requesting various relief, including a motion to stay plan payments and administration, a claim objection, a motion to avoid a lien, and a request for an emergency hearing. The Court summarily denied the motions on several grounds. First, neither motion was accompanied by a notice or opportunity for objection. Second, the request for emergency hearing was not warranted; the basis for the emergency request was that plan payments should not continue until a purported claim objection and lien avoidance disputes are resolved. But the Court reasoned that claim objections and lien avoidance motions are somewhat routine, and other creditors should not be prejudiced by delay in administration simply because the Debtors had a dispute with their mortgage holder. Third, both motions suffered service deficiencies. The certificates of service were unsigned and failed to specify which documents were served, who served them, or by what means. Finally, the Court noted that there were substantive deficiencies, including citations to the federal criminal code, state medical assistance procedures, and the U.C.C., all of which were irrelevant or beyond the scope of the requested relief.

Statute/Rule References:
Fed. R. Bankr. P. 7001
Fed. R. Bankr. P. 9006 -- Time
Fed. R. Bankr. P. 9011 -- Signing of Papers
Fed. R. Bankr. P. 9014 -- Contested Matters

Key Terms:
Notice
Relevance
Service

Case Summary:
Plaintiff Chapter 7 Trustee filed an adversary proceeding seeking (i) a determination that Defendant’s asserted lien was invalid under state law, and (ii) a preliminary injunction enjoining Defendant from continuing state court litigation and collection efforts. Defendant filed a response along with a motion to abstain or, alternatively, to dismiss the case. The Court held that it was not required to abstain under 28 U.S.C. § 1334(c)(2) because the primary issue in the complaint regarding the validity of Defendant’s lien was a core proceeding under 28 U.S.C. § 157. Also, the Court did not discretionarily abstain under section 1334(c)(1) because permissive abstention was not in the best interest of justice, respect for state law, or comity with state courts. The proceeding concerned property of the estate, which this Court maintains exclusive jurisdiction over under § 1334(e).

Statute/Rule References:
11 U.S.C. § 362 -- Automatic stay
11 U.S.C. § 541 -- Property of the estate
28 U.S.C. § 157(b)(2)(K) -- Determination of the validity, extent, or priority of liens
28 U.S.C. § 1334(c), (e)

Key Terms:
Core Proceeding
Mandatory Abstention
Motion to Dismiss
Permissive Abstention
Property of the Estate