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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.

Judge Thomas S. Utschig

Christopher Seelen, Trustee of the Douglas L. Couillard and Deborah M. Couillard Bankruptcy Estate v. Douglas L. Couillard, Deborah M. Couillard, and Bank of America, NA (In re Couillard), Adv. No. 12-0132, Case No. 12-11610-7 (12/06/2012) (486 B.R. 481) 12/06/2012

Case Summary:
The chapter 7 trustee sought to exercise his rights as a subsequent purchaser under state law and avoid a mortgage pursuant to 11 U.S.C. § 544(a)(3). The lender filed a motion for summary judgment, which the court denied. The trustee then moved for summary judgment and the bank sought reconsideration. The court found that the mortgage did not identify the property with a “definite reference” because the lender did not attach legal descriptions for two parcels. As such, the mortgage was not recorded “as provided by law” and was subject to the interests of a subsequent purchaser. Because the affidavit of correction filed by the lender was invalid under state law, it did not provide constructive notice of anything beyond the defective original mortgage. Consequently, the trustee was entitled to avoid the mortgage. The trustee’s motion for summary judgment was granted, and the bank’s request for reconsideration was denied.

Statute/Rule References:
11 U.S.C. § 544 -- Trustee as Lien Creditor
Wis. Stat. § 706.05 -- Formal Requisites for Record
Wis. Stat. § 706.085 -- Correction Instruments
Wis. Stat. § 706.09 -- Notice of Conveyance from the Record

Key Terms:
Lien Avoidance
“Strong Arm” Power 

John M. Cirilli, Trustee v. Leonard D. Bronk (In re Bronk), Adv. No. 10-0044, Case No. 09-15224-7 (11/29/2012) -- Judge Thomas S. Utschig 11/29/2012

Case Summary:
The bankruptcy court entered a judgment allowing the debtor an exemption in an annuity, disallowing an exemption in college savings plans, and granting the debtor’s discharge. On appeal, the district court vacated the judgment, affirmed as to the college savings plans and the discharge, and remanded for further factual findings regarding the annuity. After remand, the bankruptcy court conducted a hearing and reviewed the specific terms of the annuity contract. The court found that distributions under the annuity were conditioned upon the debtor’s age, disability, or death. Because the distributions were in fact based upon these conditions, the annuity fell within the statutory terms and was properly claimed as exempt. The trustee’s objection to the annuity was again overruled and judgment was entered in accordance with the court’s findings.

Statute/Rule References:
Wis. Stat. § 815.18 -- Exemptions

Key Terms:
Annuity
Exemptions (Annuity)

Christopher M. Seelen, Trustee of the Douglas L. Couillard and Deborah M. Couillard Bankruptcy Estate v. Douglas L. Couillard, Deborah M. Couillard, and Bank of America, N.A. (In re Couillard), Adv. No 12-0132, Case No 12-11610-7 (11/09/2012)(486 B.R 466) 11/19/2012

Case Summary:
Trustee sought to avoid a mortgage because it did not have legal descriptions of the property attached to it. The lender had filed an “affidavit of correction” in which it attempted to add two parcels to the mortgage. The trustee contended that the mortgage was void against a subsequent purchaser for value and that the affidavit of correction was likewise invalid because it was not executed by the owners of the property. The court found that the original mortgage was defective insofar as the failure to attach the legal descriptions meant that the mortgage did not appear in the relevant tract index. The affidavit of correction was invalid because it was not properly executed, and could not provide constructive notice of another defective instrument. The lender was also not entitled to an equitable lien or equitable subordination. The lender’s motion for summary judgment was denied.

Statute/Rule References:
11 U.S.C. § 544 -- Trustee as Lien Creditor
Wis. Stat. § 706.05 -- Formal Requisites for Record
Wis. Stat. § 706.085 -- Correction Instruments
Wis. Stat. § 706.09 -- Notice of Conveyance from the Record

Key Terms:
Lien Avoidance
“Strong Arm” Power

In re Haake, Case No. 12-11398-11 (09/18/2012) (483 B.R. 524) -- Judge Thomas S. Utschig 09/18/2012

Case Summary:
The debtor was a Minnesota resident who purchased her home through a contract for deed. The contract called for full payment of the balance due by a specific date. After she failed to pay, the vendor served the debtor with a notice of cancellation of the contract in accordance with Minnesota law. She filed bankruptcy in an effort to save her home. The vendor moved for relief from the stay and argued that her right to “cure” the contract had expired under § 108(b) and she had no further right to the property. The court ruled that under relevant Eighth Circuit precedent, a notice of cancellation of a contract for deed created a cure period under § 108(b) that was not stayed by § 362(a); as such, the debtor’s redemption rights had expired. Even if she still held an interest in the property, the debtor could not modify the contract for deed because of the anti-modification provisions of § 1123(b)(5). The motion for relief from stay was granted.

Statute/Rule References:
11 U.S.C. § 108(b)
11 U.S.C. § 1123(b) -- Contents of Plan

Key Terms:
Anti-Modification Provisions

Melvyn L. Hoffman, Trustee v. Denise Renee Hartley and Vincent Levi Hartley (In re Hartley), Adv. No. 12-0050, Case No. 11-13956-7 (09/11/2012) (483 B.R. 700) -- Judge Thomas S. Utschig 09/11/2012

Case Summary:
The debtors owned an 82-acre parcel of real estate, 40 acres of which the parties agreed constituted their homestead. The entire property was encumbered by a single mortgage. The chapter 7 trustee sought to apportion the mortgage balance between the homestead and non-homestead parcels in accordance with their relative values. The debtors objected, arguing that the trustee’s request constituted an impermissible infringement of their homestead rights. The bankruptcy court ruled that Wisconsin courts have held that under § 846.11, debtors have the right to “insist” that when a single mortgage covers both homestead and non-homestead property, the non-homestead property must be sold first. The homestead exemption is to be liberally construed and is favored above the rights of creditors. Under the circumstances, the debtors were entitled to allocate the mortgage in such a way as to maximize their homestead exemption. The complaint

Statute/Rule References:
Wis. Stat. § 846.11 -- Homestead, How Sold

Key Terms:
Exemptions (Homestead)

Howard D. White, as Trustee of the Chad L. Pawlak and Jo Ann Pawlak Bankruptcy Estate v. Coyne, Schultz, Becker & Bauer, S.C. (In re Pawlak), Adv. No. 12-0036, Case No. 10-11787-7 (08/29/2012) (483 B.R. 169) -- Judge Thomas S. Utschig 08/29/2012

Case Summary:
Chapter 7 trustee sought to recover $50,000 “flat fee” paid to law firm to represent debtors in potential bankruptcy adversary proceeding. The Trustee alleged that payment of the fee constituted a fraudulent transfer as the Debtors did not receive “reasonably equivalent value” at the time the transfer was made (i.e., prior to the bankruptcy filing). The Bankruptcy Court ruled that the flat fee was not property of the estate at the time of filing. However, all fees paid to attorneys in connection with a bankruptcy case (or a related adversary case) remain subject to review by the Bankruptcy Court. Payment of the fee constituted a pre-petition transfer of the Debtors’ property, even though the funds were paid directly to the law firm as part of a settlement with a third-party insurance company. The promise of future representation constituted a legally binding obligation which had value, even though there was no certainty that an adversary proceeding would be filed. Under the facts of the case, at the time of the transfer the Debtor obtained rights to representation which were roughly worth about the amount they paid. The transfer could not be avoided, and judgment was entered for the Defendant.

Statute/Rule References:
11 U.S.C. § 548 -- Fraudulent Conveyance

Key Terms:
Fraudulent Conveyance

In re Woller, Case No. 11-14298-7 (08/16/2012) (483 B.R. 886) -- Judge Thomas S. Utschig 08/16/2012

Case Summary:
The Chapter 7 trustee objected to various exemptions, including a semi-tractor which the debtors claimed as “business property,” a bank account, revenues from the husband’s trucking business which had been claimed under an exemption for 75% of a debtor’s weekly “net income,” and an annuity purchased on the eve of bankruptcy with funds from the sale of real estate inherited from the wife’s father. The Court found that while the semi-tractor was a “motor vehicle,” the Debtors were still entitled to claim it as “business property” as it qualified as equipment within the meaning of that exemption. The trucking revenue also qualified as “net income” and the debtors’ exemption planning as to the purchase of the annuity did not rise to the level of “extrinsic” conduct which would justify the denial of the exemption. However, the debtors were not entitled to exempt a bank account used solely for the purpose of depositing the husband’s trucking receipts, as it was not used for the debtor’s “personal” use. The objection was granted in part and denied in part.

Statute/Rule References:
Wis. Stat. § 815.18 -- Exemptions

Key Terms:
Exemptions

James Paul Pulaski and Judith Pearl Pulaski v. Dakota Financial, LLC (In re Pulaski), Adv. No. 11-0282, Case No. 11-14135-13 (07/13/2012) (475 B.R. 681) -- Judge Thomas S. Utschig 07/13/2012

Case Summary:
The Debtors filed an adversary proceeding to avoid the defendant’s mortgage. They alleged that the mortgage was invalid due to unconscionability, lack of consideration, mistake, misrepresentation, unjust enrichment, breach of contract, and breach of the duty of good faith and fair dealing. The defendant argued that the court lacked the constitutional authority to rule on these claims under Stern v. Marshall, __ U.S. __, 131 S. Ct. 2594 (2011). The court found that the debtors’ claims all related to issues which would be resolved in the process of adjudicating the defendant’s claim, which would not be an allowed secured claim until the debtors’ claim objection (and their adversary proceeding, which was the vehicle for resolving the objection) was resolved. The request to dismiss the adversary proceeding was denied.

Statute/Rule References:
28 U.S.C. § 157(b)(2) -- Core Proceeding

Key Terms:
Constitutional Authority of Article I Court
Core Proceedings

In re Mississippi Sports and Recreation, Inc., Case No. 10-17601-11 (06/08/2012) (483 B.R. 164) -- Judge Thomas S. Utschig 06/08/2012

Case Summary:
The Wisconsin Department of Natural Resources moved to dismiss the case and alleged that the debtor had not obtained confirmation of a plan within the time periods required in a small business case. The plan was filed in a timely fashion and the first hearing on confirmation occurred within 45 days of the filing of the plan. The confirmation hearing was adjourned several times, although the debtor did not file a formal motion to extend the time for confirmation. The court found that the adjournments occurred prior to the expiration of the existing deadline, parties in interest had sufficient opportunity to object to any extension, and all parties acquiesced to the adjournments. The code does not require a formal motion but simply a “demonstration” that a plan is likely to be confirmed within a reasonable time. The motion to dismiss was denied. Reversed and remanded on appeal.

Statute/Rule References:
11 U.S.C. § 1121(e)(3)(A)
11 U.S.C. § 1129(e) -- Confirmation of Small Business Case

Key Terms:
Confirmation of Plan (Small Business Chapter 11)

In re Thulis, Case No. 10-16841-7 (06/04/2012) (474 B.R. 668) -- Judge Thomas S. Utschig 06/04/2012

Case Summary:
Chapter 7 Trustee objected to bank’s secured claim on the grounds that its mortgage did not cover the specific parcel previously sold by the Trustee. The bank contended that as a hypothetical subsequent purchaser under § 544(a)(3), the Trustee would have had constructive notice of its claim. The Bankruptcy Court found that although Wisconsin law charges prospective purchasers with constructive notice of certain things that might be ascertained by a review of the land or an inquiry of those in possession, nothing about the parcel in question would provide notice of the bank’s mortgage. The mortgage was not in the property’s chain of title and Wisconsin’s doctrine of constructive notice would not require a prospective purchaser to make inquiries about an owner’s financing arrangements. The trustee’s objection was sustained, and the bank’s claim was allowed as unsecured.

Statute/Rule References:
11 U.S.C. § 544 -- Trustee as Lien Creditor

Key Terms:
Lien Avoidance
“Strong Arm” Power

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