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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

In re Palmer Lake Plaza, LLC, Case No. 12-11183-11 (04/16/2012) (470 B.R. 511) -- Judge Thomas S. Utschig 04/16/2012

Case Summary:
A creditor moved to transfer venue. The debtor’s primary asset was an office building located in Minnesota. The debtor was organized under Minnesota law, its principal place of business was in Minnesota, and the sole member of the debtor was a Minnesota resident. The case was filed in Wisconsin based entirely upon the debtor’s affiliation” with another entity whose case was presently pending in Western Wisconsin. While venue was technically proper under the statute, the court agreed with the creditor that the case should be transferred to Minnesota. It would be far easier for all parties for the case to be heard in Minnesota, and the debtor’s connection with Wisconsin was tenuous at best. Motion granted.

Statute/Rule References:
28 U.S.C. § 1408 -- Venue of Cases Under Title 11
28 U.S.C. § 1412 -- Change of Venue

Key Terms:
Transfer

Karina Amundson and Steven Lankford v. Theodore Duane Slaton and Vicki Lynn Slaton (In re Slaton), Adv. No. 10-0120, Case No. 10-10704-13 (04/06/2012) (469 B.R. 814) -- Judge Thomas S. Utschig 04/06/2012

Case Summary:
The plaintiffs alleged that the debtors fraudulently induced them to invest in an auction business. The parties had become friends after a chance meeting at a rummage sale, and their shared interests made them believe that they could operate a business together. The court found that the debtors did not make any false representations to the plaintiffs. The debtors used the plaintiffs’ investment in their partnership to pay down the secured debts of the business, but the plaintiffs were informed of this plan. There was no fiduciary relationship between the parties and the debtors’ conduct did not amount to a willful and malicious injury. However, the court found in the plaintiffs’ favor on their unjust enrichment claim, as the proceeds from the sale of the business real estate were the direct result of the plaintiffs’ investment in the business. Under the circumstances, it would be inequitable for the debtors to retain that benefit without payment to the plaintiffs.

Statute/Rule References:
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - Fraud
11 U.S.C. § 523(a)(4) -- Nondischargeability - Fraud in Fiduciary Capacity
11 U.S.C. §523(a)(6) -- Nondischargeability - Willful and Malicious Injury

Key Terms:
Fraud
Fraud - Fiduciary Capacity
Injust Enrichment
Willful and Malicious

Howard D. White, Trustee v. River Valley Bank (In re Elsemore), Adv. No. 11-0057, Case No. 10-15229-7 (03/20/2012) -- Judge Thomas S. Utschig 03/20/2012

Case Summary:
The chapter 7 trustee sought to recover an alleged preference. The defendant had received the proceeds of the sale of various assets, including several patents. The defendant subsequently obtained the patents and offered to return them to the estate in satisfaction of the preference claims. The trustee refused the offer and the defendant moved for summary judgment, arguing that under § 550(a) the trustee was only entitled to “the property transferred” if that property was actually available. The court ruled that the purpose of the statute is to restore the bankruptcy estate to the financial condition it would have enjoyed if the transfer had not occurred. As such, the statute permits bankruptcy courts the flexibility to award either the return of the property or a money judgment for its value, depending upon what would best return the estate to its pre-transfer position. The motion for summary judgment was denied.

Statute/Rule References:
11 U.S.C. § 547-- Preference
11 U.S.C. § 550 -- Recovery of Preferences

Key Terms:
Preferences

Melvyn L. Hoffman, Trustee v. Nancy Kay Fassett and Chaunda L. Fassett (In re Fassett), Adv. No. 11-0331, Case No. 11-15594-7 (03/20/2012) -- Judge Thomas S. Utschig 03/20/2012

Case Summary:
The trustee sought to recover a transfer as constructively fraudulent under § 548. The debtor transferred money to her daughter about 11 months before the bankruptcy. She withdrew the funds from a 401(k) account and placed them into her personal account prior to the transfer. The funds were intended to help the daughter buy a mobile home. The transfer was essentially a gift and the debtor received only intangible, emotional satisfaction in exchange for the funds. Further, even if the money did not lose its exempt character once it was removed from the 401(k) account, the debtor voluntarily transferred the funds to the daughter. Once the transfer is avoided by the trustee and the property is returned to the bankruptcy estate, the debtor is precluded from asserting an exemption in such assets under § 522(g)(1). Judgment was entered in the trustee’s favor.

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

Key Terms:
Fraudulent Conveyance

In re Singer, Case No. 08-16874-13 (03/15/2012) (469 B.R. 293) -- Judge Thomas S. Utschig 03/15/2012

Case Summary:
The debtors and their mortgage lender negotiated a forbearance agreement which contemplated that they would make reduced mortgage payments for a six-month period pending consideration of a loan modification. After the forbearance period, the lender denied the modification request and informed the debtors that they were obligated to pay the balance of the previously reduced payments. The debtors contended that those payments had been deferred to the end of the mortgage. The court found that a forbearance agreement is a contract and must be interpreted in accordance with its terms. As the agreement was drafted by the lender and was ambiguous as to the final treatment of the deferred payments, it would be construed in favor of the debtors. As such, they were entitled to treat the deferred payments as part of the unpaid balance due on the maturity date of the loan rather than as mortgage arrears which would need to be paid through the chapter 13 plan.

Statute/Rule References:
11 U.S.C. § 1322(b)(3)

Key Terms:
Contract – Rules of Construction
Loan Modification

Organic Family, LLC, et al. v. Chad L. Pawlak and Jo Ann Pawlak (In re Pawlak), Adv. No. 10-0148, Case No. 10-11787-7 (02/07/2012) (467 B.R. 462) -- Judge Thomas S. Utschig 02/07/2012

Case Summary:
Plaintiffs sought to prevent the discharge of a $1.1 million default judgment for breach of fiduciary duty by member and general manager of limited liability company. On summary judgment, the court found that the default judgment did not preclude the debtor from revisiting issues of liability for fraud or fraud in a fiduciary capacity. The plaintiffs alleged that the debtor had concealed the existence of a lucrative contract and attempted to obtain the contract for his own company. The court found that even presupposing that the original contract existed, it was illusory and the plaintiffs suffered no actual harm from the alleged fraud. The court also concluded that even construing the facts in the light most favorable to the plaintiff, the debtor’s fiduciary obligations under state law did not constitute a fiduciary capacity under bankruptcy law. Summary judgment was granted in favor of the debtor.

Statute/Rule References:
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - Fraud
11 U.S.C. § 523(a)(4) -- Nondischargeability - Fraud in Fiduciary Capacity

Key Terms:
Discharge
Fiduciary Capacity
Fraud
Fraud – Fiduciary Capacity

Randi L. Osberg, Trustee v. George T. Fibison (In re Fibison), Adv. No. 10-0025, Case No. 08-15440-7 (12/12/2011) (474 B.R. 864) -- Judge Thomas S. Utschig 12/12/2011

Case Summary:
The trustee sought to recover a parcel of real estate as a fraudulent transfer. The defendant had purchased the property from his son pursuant to an unrecorded land contract and received title to the property via quit claim deed about ten months prior to the bankruptcy filing. The trustee contended that execution of the quit claim deed constituted a fraudulent transfer as the debtor did not receive reasonably equivalent value for the property. A “transfer” occurs for purposes of fraudulent conveyance law at the time when a subsequent purchaser could no longer acquire an interest in the property which is superior to that of the transferee. The defendant took actual possession of the property long before the date of the quit claim deed and a subsequent purchaser would have had constructive notice of his claim. The trustee likewise could not avoid the transfer as a fraudulent conveyance.

Statute/Rule References:
11 U.S.C. § 548 -- Fraudulent Conveyance
Wis. Stat. § 242 -- Fraudulent Conveyance

Key Terms:
Fraudulent Conveyance

Duane Joseph Kolve and Angela Susan Kolve v. Internal Revenue Service (In re Kolve), Adv. No. 11-0063, Case No. 10-18348-7 (09/22/2011) (459 B.R. 376) -- Judge Thomas S. Utschig 09/22/2011

Case Summary:
Debtors sought a determination that certain tax obligations were discharged as they had come due more than three years prior to the petition date. The IRS contended that the statutory “lookback” period should be extended due to the debtors’ prior chapter 13 case. The court concluded that the language of the statute which references the period in which “the stay of proceedings was in effect in a prior case” only authorizes an extension of the lookback period if the automatic stay in a prior case actually precluded the IRS from pursuing collection actions. The debtors’ plan had been confirmed before the taxes came due, and as a result the IRS was not “disabled” from collecting the taxes by the prior case. The taxes were discharged.

Statute/Rule References:
11 U.S.C. § 523(a)(1) -- Nondischargeability - Taxes

Key Terms:
Taxes - Nondischargeability

In re Fryseth, Case No. 11-12489-7 (09/14/2011) -- Judge Thomas S. Utschig 09/14/2011

Case Summary:
The debtors attempted to avoid a lien on a car on the grounds that the lien had not been properly assigned.  The court found that the lien had been assigned under the terms of Wis. Stat. § 342.21, which provides that a secured party may assign a security interest in a vehicle and that upon assignment, the assignee does not need to reissue the certificate of title with the assignee named as the secured party.  Under Wisconsin law, the assignment affected neither the owner’s interest nor the validity of the original security interest.  The debtors could not avoid the lien.

Statute/Rule References:
Wis. Stat. § 342.21-- Assignment of Security Interest

Key Terms:
Assignment of Security Interest
Security Interest - Assignment

James Arthur Sandus v. Educational Credit Management Corporation (In re Sandus), Adv. No. 10-0128, Case No. 10-10832-7 (06/03/2011) – Judge Thomas S. Utschig 06/03/2011

Case Summary:
The debtor owed approximately $147,000.00 in student loans. He was 52 years old, single, with no dependents. He had obtained an undergraduate degree and a master’s degree in computer science from Northwestern University. He finished his education in 1999. He worked in his field until 2003, when he lost his job and then worked as a contract computer technician. His last job in the computer science field was in 2007, and he worked as a carpenter for a time until his health prevented him from doing so. He had a heart condition which first manifested in 2004; this condition mandated several surgeries and required medication, regular medical appointments, and physical restrictions which would continue indefinitely. He also suffered from a physical condition which made it difficult to engage in computer keyboarding (and for which he had four unsuccessful surgeries). He began receiving social security disability payments in May of 2008. He had sought employment in the computer field and been unsuccessful. The Court concluded that his financial situation was likely to persist for a significant portion of the repayment period, thus satisfying the “certainty of hopelessness” mandated by the Seventh Circuit in In re Roberson, 999 F.2d 1132 (7th Cir. 1993), and Goulet v. Educ. Credit Mgmt. Corp., 284 F.3d 773 (7th Cir. 2002).

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

Key Terms:
Student Loans

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