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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 Friedrich, Case No. 19-13843-13 (05/05/2020) (618 B.R. 274) -- Judge Catherine J. Furay 05/05/2020

Case Summary:
Debtor was the sole member and owner of a Wisconsin Limited Liability Company. The LLC was indebted to a creditor bank by virtue of three commercial loans (“Notes”) in the amount of $620,121.97. The Notes were secured by all the LLC’s assets. Debtor personally guaranteed the LLC’s repayment through a Commercial Guaranty. The LLC defaulted under the Notes. Creditor filed a lawsuit against the LLC and the Debtor in Dane County Circuit Court seeking the appointment of a receiver under Wis. Stat. Ch. 128. On the morning of the receivership hearing, Debtor dissolved the LLC and transferred all assets and debts of the LLC to himself. Debtor filed his personal Chapter 13 petition on the same day. Creditor bank moved to dismiss the bankruptcy case because the Debtor’s noncontingent, liquidated unsecured claims exceeded the statutory amount of $419,275 set forth in section 109(e). Assuming the attempted transfer of assets was valid, the Court found that the Debtor, as the new owner of the assets, now owned assets subject to the creditor’s liens. As the guarantor of the Notes, Debtor’s liability to creditor bank remained an unsecured obligation. The case was dismissed under section 109(e) of the Code.

Statute References:
11 U.S.C. § 109(e) -- Chapter 13 Eligibility
11 U.S.C. § 1307(c) -- Conversion or Dismissal

Key Terms:
Debt Limit
Dismissal
Ineligible
LLC Asset Transfer
Unsecured Debt

Dells Land & Cattle Company II, LLC v. Jason J. Krus, Trina B. Krus, and Wisconsin Mutual Insurance Company (In re Krus), Adv. No. 19-0048, Case No. 17-12413-13 (04/24/2020) -- Judge Catherine J. Furay 04/24/2020

Case Summary:
Plaintiff filed this adversary proceeding to recover money from the Debtors for alleged damages to collateral under state law causes of action. Plaintiff had received a judgment of strict foreclosure in state court and discovered damages to the property after retaking possession. Plaintiff named the Debtors’ insurer as a co-defendant. Debtors filed a Motion to Abstain and Remand or, in the Alternative, to Dismiss the Adversary Proceeding. Debtors’ insurer and the Plaintiff consented to this Court’s jurisdiction. Debtors’ Motion and arguments raised four issues: (1) whether the Court lacks subject matter jurisdiction under Rooker-Feldman; (2) whether the Court must abstain under mandatory abstention; (3) whether the court should abstain under permissive abstention; and (4) whether the Court should dismiss the adversary proceeding. The Court’s decision made no findings about the merits of the Plaintiff’s adversary action. The Court found that: (1) it does not lack subject matter jurisdiction over Plaintiff’s damage, negligence, conversion, and statutory theft claims; (2) it lacks subject matter jurisdiction over Plaintiff’s delinquent real estate tax claim; (3) mandatory abstention is not required; (4) permissive abstention is not appropriate; (5) Plaintiff’s complaint states claims sufficient to defeat a motion to dismiss except for its delinquent real estate tax claim. The Court dismissed the Plaintiff’s delinquent real estate tax claim.

Statute/Rule References:
28 U.S.C. § 1334
Fed. R. Bankr. P. 7012(b)(6), adopting Fed. R. Civ. P. 12(b)(6) -- Motion to Dismiss for Failure to State a Claim Upon Which Relief Can Be Granted

Key Terms:
Mandatory Abstention
Permissive Abstention 
Rooker-Feldman Doctrine
Subject Matter Jurisdiction

Joseph Gilbert v. Carrie Ann Johnson (In re Johnson), Adv. No. 19-0077, Case No. 19-12155-7 (04/15/2020) -- Judge Catherine J. Furay 04/15/2020

Case Summary:
Plaintiff and Defendant were involved in a romantic relationship that ended in 2012. They lived together for a period time but were never married. The couple held several joint checking and business accounts with the Plaintiff making a substantial portion of the deposits. Defendant regularly withdrew sums from the joint accounts to pay the Plaintiff’s personal bills and expenses. However, the Plaintiff’s adversary complaint accuses the Defendant of intentionally taking and retaining money that did not belong to her. Plaintiff objects to discharge under 11 U.S.C. §§ 523(a)(2), (a)(4), and (a)(6). Defendant filed a motion for judgment on the pleadings seeking a determination that she should not be denied a discharge. Defendant’s motion asserts she did not need the Plaintiff’s permission to access funds and that it is impossible to convert or misappropriate funds that also belonged to her under Wisconsin’s joint bank account laws. The Court denied the motion for judgment on the pleadings because the Plaintiff’s adversary complaint states claims that have facial plausibility. There is a question of actual ownership over the funds since the former couple were never married. There is also a question of whether the Plaintiff had donative intent with respect to the funds. The Court made no findings about the merits of the Plaintiff’s adversary action. This decision was merely a finding that the Plaintiff’s complaint pleads facts that support his claims for relief. Both parties will have an opportunity to present their case at trial.

State/Rule References:
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - False Pretenses, False Representation, or Fraud
11 U.S.C. § 523(a)(4) -- Nondischargeability - Fraud or Defalcation While Acting in a Fiduciary Capacity, Embezzlement, or Larceny
11 U.S.C. § 523(a)(6) -- Nondischargeability - Willful and Malicious Injury
Fed. R. Bankr. P. 7012(b) -- Judgment on the Pleadings
Fed. R. Civ. P. 10(c) -- Form of Pleadings -- Adoption by Reference; Exhibits
Fed. R. Civ. P. 12(c) -- Judgment on the Pleadings

Key Terms:
Facial Plausibility
Judgment on the Pleadings
Nondischargeability
Wisconsin Joint Bank Accounts

David Garnett v. Michael Harvey (In re Harvey), Adv. No. 19-0002, Case No. 18-13398-7 (03/13/2020) -- Judge Catherine J. Furay 03/20/2020

Case Summary:
Plaintiff creditor contracted with Defendant’s business entity to install solar panels for his residence. Plaintiff made a $7,200 down payment for the installations. However, the solar panels were not installed as promised and the Plaintiff did not receive a refund. Plaintiff motioned for summary judgment on his claims. The Court took judicial notice of its own prior litigation during the United States Trustee’s trial denying the Defendant a discharge under 11 U.S.C. §§ 727(a)(3) and (a)(5) in September 2019. Here, the Court determined there was no genuine dispute as to any material fact that the debt owed to the Plaintiff was exempted from discharge under sections 523(a)(2)(A) and 523(a)(6). The facts and evidence of this case resembled the Defendant’s troubling business practices established through the United States Trustee’s trial. Plaintiff’s Motion for Summary Judgment was granted.

Statute/Rule References:
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - False Pretenses, False Representation, or Fraud
11 U.S.C. § 523(a)(2)(B) -- Use of a Statement in Writing
11 U.S.C. § 523(a)(6) -- Nondischargeability - Willful and Malicious Injury
Fed. R. Bankr. P. 7056 -- Summary Judgment
Fed. R. Civ. P. 8(b) -- General Rules of Pleading - Defenses; Admissions and Denials
Fed. R. Civ. P. 56(a) -- Summary Judgment

Key Terms:
Judicial Notice
Nondischargeable Debt
Summary Judgment

In re Frasier, Case No. 19-13159-7 (2/26/2020) (613 B.R. 271) -- Judge Catherine J. Furay 02/26/2020

Case Summary:
Creditor provided printing services to the Debtor and her business prior to her petition date. Debtor owed approximately $5,800 for such services. Debtor filed a voluntary Chapter 7 petition on September 19, 2019, and listed the creditor on her Schedules. Creditor filed a pro se small claims complaint two business days later, and the Debtor was served by a process server thirteen days later. On October 8, 2019, Debtor’s attorney notified the creditor of the bankruptcy filing and offered to settle the stay violation for $1,000, along with the dismissal of the small claims action. Creditor dismissed its complaint two days later but did not pay the $1,000. Debtor filed a Motion for Order for Contempt and Sanctions for Violation of the Automatic Stay more than a month later. The Court denied the Motion because the creditor did not willfully violate the stay and took prompt action to remedy its technical violation. The Court found no damages beyond minimal attorney’s fees incurred to notify the creditor about the bankruptcy. Debtor never had to appear in court to litigate the complaint. The Court found that the Debtor failed to mitigate her damages and that her attorney was not entitled to any attorney’s fees incurred after the creditor had dismissed its small claims complaint.

Statute/Rule References:
11 U.S.C. § 362 -- Automatic Stay
11 U.S.C. § 362(k)(1) -- Automatic Stay Damages

Key Terms:
Automatic Stay
Duty to Mitigate Damages
Technical Violation of the Automatic Stay
Willful Violation of the Automatic Stay

In re Perry, Case No. 15-12294-7 (09/13/2019) (2019 WL 4410226) -- Judge Catherine J. Furay 09/13/2019

Case Summary:
Debtor received a Chapter 7 discharge in November 2015. Four years later, he filed a Motion for Contempt with this Court against three individuals: his ex-wife; her attorney during their divorce; and the State Court Judge who presided over their divorce. Debtor alleged the continued pursuit of a state court action, stemming from the divorce, by his ex-wife and her attorney, as well as the orders entered by the Judge, violated the discharge injunction under 11 U.S.C. § 524. Debtor’s ex-wife, her attorney, and the Judge all moved to deny the Motion for Contempt. The Court reserved judgment as it pertains to the ex-wife and her attorney. A further hearing will be scheduled to adjudicate their motions to deny the Debtor’s Motion for Contempt. The Court found that the Judge is entitled to Judicial Immunity because he acted within his judicial capacity and had proper jurisdiction over the divorce proceedings. The Court denied the Motion for Contempt against the Judge.

Statute/Rule References:
11 U.S.C. § 524 -- Effect of Discharge

Key Terms:
Discharge Injunction
Judicial Immunity
Motion for Contempt

Pamela Haglund v. Edward W. Rusch (In re Rusch), Adv. No. 19-0020, Case No. 18-14155-7 (08/09/2019) (2019 WL 3773884) -- Judge Catherine J. Furay 08/09/2019

Case Summary:
Defendant acted in the capacity of financial power of attorney for his mother, who passed away in 2013. Plaintiff is the Personal Representative of the late mother’s estate. Defendant could not account for $240,927.70 belonging to the mother’s estate. In October 2017, a state court Judge entered an order pursuant to a stipulation between the parties and awarded the Plaintiff $120,463.85. Defendant filed a voluntary Chapter 7 in December 2018. Plaintiff brought this adversary seeking a nondischargeability determination with respect to the state court order under 11 U.S.C. § 523(a)(4). Defendant filed a pro se answer and moved to dismiss the adversary complaint without any statutory citations. The Court interpreted the Defendant’s answer to move for dismissal under Federal Rule of Bankruptcy Procedure 7012(b), adopting Federal Rule of Civil Procedure 12(b)(6). The Court ruled that the Plaintiff’s complaint is well pleaded and states a plausible claim that the Plaintiff is entitled to relief. The Court denied the Defendant’s motion to dismiss.

Statute/Rule References:
11 U.S.C. § 523(a)(4) -- Nondischargeability - Fraud or Defalcation in Fiduciary Capacity
Fed. R. Bankr. P. 7012(b) -- Defenses and Objections
Fed. R. Civ. P. 12(b)(6) -- Motion to Dismiss for Failure to State a Claim

Key Terms:
Motion to Dismiss
Nondischargeability
Plausibility Standard

Minnesota Department of Labor and Industry v. Michael Harvey (In re Harvey), Adv. No. 18-0079, Case No. 18-13398-7 (08/08/2019) -- Judge Catherine J. Furay 08/08/2019

Case Summary:
The Minnesota Department of Labor and Industry ("MNDLI") is a state-based agency with the authority to license and regulate electrical contractors and electricians within Minnesota. In June 2018, MNDLI filed a civil lawsuit against the Defendant. A Minnesota state court granted summary judgment in favor of MNDLI and ordered the Defendant to pay the Restitution Judgment of $1,560,311.12. Defendant filed a voluntary Chapter 7 petition in October 2018. MNDLI filed this adversary seeking a nondischargeability determination for the Restitution Judgment under 11 U.S.C. §§ 523(a)(2) and/or 523(a)(6). Defendant's answer moved for dismissal without any statutory citations. The Court interpreted the Defendant's answer to move for dismissal under Federal Rule of Bankruptcy Procedure 7012(b), adopting Federal Rule of Civil Procedure 12(b)(6). The Court denied the motion to dismiss because MNDLI's complaint met the plausibility standard to overcome a 12(b)(6) motion.

Defendant also filed a counterclaim, seeking damages in the approximate amount of $7 million stemming from a host of torts he alleged MNDLI committed, including defamation. MNDLI moved to dismiss the counterclaim on three grounds: (1) the Court's lack of subject-matter jurisdiction under Rooker-Feldman; (2) principles of collateral estoppel and res judicata barred the re-litigation of issues in the counterclaim; and (3) Defendant failed to state a claim upon which relief can be granted.

The Court dismissed the Defendant's defamation counterclaim under Rule 12(b)(6) because the claim failed to state that the alleged defamatory statements were untrue. The Court also held it was barred from relitigating the remaining counterclaim allegations because of collateral estoppel and/or res judicata. Defendant had a full and fair opportunity to litigate the issues he presented in the counterclaim, however, he chose to not appear in the state court action. The Court further held that it lacked subject-matter jurisdiction under the Rooker-Feldman doctrine. The Court made no findings about the merits of MNDLI's nondischargeability action against the Defendant. This decision was merely a finding that the Court lacked subject-matter jurisdiction over the Defendant's counterclaim.

Statute/Rule References:
Fed. R. Bankr. P. 7012(b) -- Defenses and Objections
Fed. R. Civ. P. 12(b)(6) -- Motion to Dismiss for Failure to State a Claim

Key Terms:
Collateral Estoppel
Counterclaim
Motion to Dismiss
Nondischargeability
Res Judicata
Rooker-Feldman
Subject-Matter Jurisdiction

In re Olsen, Case No. 18-14255-13 (07/22/2019) (2019 WL 3294745, 604 B.R. 790) -- Judge Catherine J. Furay 07/22/2019

Case Summary:
Debtor and State Bank of Cross Plains (“State Bank”) executed a mortgage on real property containing the Debtor's homestead and business workshop in 2014. They renewed the Note in 2018. Debtor defaulted by failing to pay the required balloon payment. He then filed a Chapter 13. He had no unsecured debt and the only debt he defaulted on was the balloon payment. The parties agreed the Plan must pay State Bank's claim in full over the life of the Plan. The Plan provided, on account of State Bank's claim, monthly payments followed by an eventual refinance and balloon payment before the end of the Plan. State Bank objected to the Plan on three grounds: (1) the Debtor lacked the income necessary to make Plan payments whether or not the balloon payment was allowed; (2) the balloon payment was an impermissible modification of State Bank's claim; and (3) a future refinance was too speculative. The Court confirmed the Plan over State Bank's objection. The Plan was feasible. While the Debtor had good months and bad months, the good months more than compensated for the bad months. Given the unique facts of the case, notably the Debtor's substantial equity in the real property collateral, the Court found the balloon payment was permissible under sections 1322(b)(2) and 1325(a)(5). Further, a future refinance and balloon payment was not unduly speculative given the Debtor's equity and quality job outlook.

Statute/Rule References:
11 U.S.C. § 1322(b)(2) -- Modification of Rights of Secured Claimants
11 U.S.C. § 1325(a)(5) -- Providing for Curing of Default
11 U.S.C. § 1325(a)(6) -- Feasibility

Key Terms:
Balloon Payment
Confirmation
Feasibility
Modification

Harold F. Jung v. Internal Revenue Service (In re Jung), Adv. No. 18-0052, Case No. 18-12211-7 (07/02/2019) (604 B.R. 773) -- Judge Catherine J. Furay 07/02/2019

Case Summary:
The Internal Revenue Service ("IRS") asserted Harold Jung (“Debtor”) owed additional taxes and penalties. The Debtor commenced an adversary seeking to determine and discharge his tax liability, if any. The IRS filed a Motion to Dismiss for lack of subject-matter jurisdiction. The Court denied the Motion. The IRS then filed a Motion to Reconsider or, in the alternative, to hold the matter in abeyance pending the resolution of another case awaiting decision from the Seventh Circuit (In re Bush). The Court denied the Motion to Reconsider. There were no material changes in circumstances warranting a revisiting of the prior decision. Dischargeability of the taxes was still at issue. Dischargeability is a core proceeding and fundamental component of title 11. The Court likewise denied holding the matter in abeyance pending the resolution of Bush. Given the factual distinctions between this case and Bush, there was no guarantee the Bush decision would resolve this case. In addition, it is unfair to make the Debtor wait an indefinite amount of time before Bush is decided.

Statute/Rule References:
11 U.S.C. § 505(a) -- Determination of Tax Owed
11 U.S.C. § 523(a)(1) -- Nondischargeability – Taxes
28 U.S.C. § 157(a) -- Jurisdiction
28 U.S.C. § 1334 -- Abstention

Key Terms:
Dischargeability
Jurisdiction
Reconsideration
Tax Liability

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