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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

Kendra Lea Miller v. United States of America, acting through Rural Development Rural Housing Service, successor in interest to the United States Department of Agriculture (In re Miller), Adv. No. 08-0118, Case No. 08-11097-7 (07/08/2009) (414 B.R. 481) 07/08/2009

Case Summary:
Debtor filed an adversary proceeding seeking damages for an alleged violation of the automatic stay. The defendant was an agency of the United States and a creditor of the debtor. The defendant had certified its judgment to the IRS pursuant to statutory provisions which allowed federal agencies to offset their claims against “tax overpayments” made by debtors. The defendant had refused to surrender a refund of $1,393.00 which it had received under this program. The debtor contended that her exemption claim trumped the agency’s setoff rights. The Court found that § 553 preserves whatever setoff rights otherwise exist, and that because the bankruptcy code does not alter or affect setoff rights, the debtor’s exemption claim could not “trump” the creditor’s rights under § 553. Judgment was granted in favor of the creditor.

Statute/Rule References:
11 U.S.C. § 362(h) -- Damages for Willful Stay Violations
11 U.S.C. § 522(c) -- Exemptions - As Against Federal Tax Liens
11 U.S.C. § 553 -- Setoff

Key Terms:
Automatic Stay
Exemptions (Federal Tax Lein)
Setoff

Jeremy Hoffman v. Paul H. Sabaska and Amy S. Sabaska (In re Sabaska), Adv. No. 08-0106, Case No. 08-11068-7 (02/06/2009) – Judge Thomas S. Utschig 02/06/2009

Case Summary:
Creditor brought an adversary proceeding seeking to deny the debtors’ discharge, arguing that the debtors had transferred assets with the intent to hinder, delay, or defraud creditors in violation of § 727(a)(2) or that they failed to satisfactorily explain a loss or diminution in assets in violation of § 727(a)(5). The debtor husband had previously operated a trucking business, and the creditor was a former business partner who had obtained a judgment against him. The creditor contended that the assignment of various leases for semi-trailers to a new entity owned by the debtor’s aunt was a transfer of assets, and the debtor intended to hinder, delay, or defraud creditors by doing so. The creditor also contended that the debtor failed to explain the loss of assets, including business revenues associated with the trucking business. The court found that the debtor wife had no involvement in the conduct in question, and consequently there was no evidence to support denial of her discharge. As to the husband, the court acknowledged that the assignment of leases was a “transfer” of property, but the plaintiff failed to demonstrate any subjective intent as the debtor was simply attempting to stay in business. The court also found that debtor’s explanation as to the ultimate surrender or repossession of the trailers by the lessor was satisfactory, and that the creditor did not demonstrate any other loss of assets for which the debtor did not have an adequate explanation. The adversary complaint was dismissed.

Statute/Rule References:
11 U.S.C. § 727(a)(2) -- Denial of Discharge - Transfer of Assets
11 U.S.C. § 727(a)(5) -- Denial of Discharge - Loss of Assets

Key Terms:
Discharge (Denial of Discharge)

Peter F. Herrell, Trustee v. Daryl DeCora and Ho-Cak Federal (In re DeCora), Adv. No. 07-111, Case No. 06-11697-7 (3/28/2008) (387 B.R. 230) – Judge Thomas S. Utschig 03/28/2008

Case Summary:
Trustee sought to avoid security interest of bank in a debtor’s per capita interest in tribal gaming revenues. The court concluded that the debtor’s right to the distributions was property of the estate, and the bank failed to properly perfect its security interest when it mailed a copy of the assignment documents to the Ho-Chunk Nation but did not file a financing statement as required by Wisconsin law. Trustee, as hypothetical lien creditor, may avoid security interest for benefit of the estate.

Statute/Rule References:
11 U.S.C. § 541 -- Property of the Estate
11 U.S.C. § 544 -- Trustee as Lien Creditor
Wis. Stat. § 409.310 -- Security Interests - Filing of Financing Statement
Wis. Stat. § 409.317 -- Security Interests - Rights of Lien Creditor

Key Terms:
Perfection of Security Interest
Property of the Estate

In re Jafari, Case No. 06-10155-11 (10/16/2007) (378 B.R. 575) – Judge Thomas S. Utschigs. Apr. 7, 2008)] 10/16/2007

Case Summary:
Debtor and chapter 11 trustee objected to claims filed by various casinos, all of which consisted of “markers” owed for gambling debts incurred by the debtor pre-petition. None of the claims had been reduced to judgment in Nevada, and the objecting parties contended that as gambling debts are unenforceable under Wisconsin law, the claims should be disallowed. The bankruptcy court (378 B.R. 575) sustained the objections, ruling that under choice of laws principles Wisconsin law would apply, and that under Wisconsin law the debts would be unenforceable. On appeal, the district court ruled even if Wisconsin choice of law principles applied, Wisconsin courts would apply Nevada law, thus rendering the debts enforceable. The bankruptcy court’s order was reversed.

Statute/Rule References:
11 U.S.C. § 502 -- Allowance of Claims or Interests

Key Terms:
Claims - Allowance

In re Mancl, Case No. 06-10764-13 (08/24/2007) (375 B.R. 514) – Judge Thomas S. Utschig 08/24/2007

Case Summary:
The debtors proposed a chapter 13 plan which calculated their “disposable income” in accordance with their Form B22C. The chapter 13 trustee objected on the grounds that the income reported on the Form B22C was abnormally low because the debtor had been disabled during the six months prior to the bankruptcy filing. The trustee argued that the debtors’ actual income should be used in determining their “disposable income.” The court found that the Form B22C should be the starting point for the disposable income test but is not dispositive. If the six-month average used by the Form B22C to calculate a debtor’s “current monthly income” is not a reasonable forecast of future income, the court may consider the debtors’ actual income.

Statute/Rule References:
11 U.S.C. § 1325 -- Confirmation of Chapter 13 Plan

Key Terms:
Confirmation of Chapter 13 Plan
Disposable Income
Means Test
Projected Disposable Income
 

In re Kogler, Case No. 06-12027-7 (03/30/2007) (368 B.R. 785) – Judge Thomas S. Utschig 03/30/2007

Case Summary:
The United States Trustee brought a motion to dismiss based on the “presumption of abuse” found in 11 U.S.C. § 707(b)(2). The debtors argued that the presumption of abuse did not apply because the debtors’ deductions, including deductions for secured debt, indicated that they had no disposable income. At issue were deductions for a home and a vehicle that the debtors proposed to surrender. The Court ruled that § 707(b)(2) contemplated a “snapshot” review of the debtors’ finances as of the petition date, and that the debtors were entitled to deduct secured debt which was contractually due as of that date regardless of their subsequent intentions toward the collateral. Consequently, the motion was denied.

Statute/Rule References:
11 U.S.C. § 707 -- Dismissal

Bremer Bank, N.A. v. Joy Ann Wyss and Scott Duane Wyss (In re Wyss), Adv. No. 04-0276, Case No. 04-16465-7 (09/27/2006) (355 B.R. 130) – Judge Thomas S. Utschig 09/27/2006

Case Summary:
Creditor sought determination that its claims against the debtors were nondischargeable. The creditor alleged that the debtors had misrepresented the existence of certain accounts receivable which served as the borrowing base of a line of credit. The court found that, under the facts of the case, the debtors’ loan obligation was not a factoring arrangement but a capital loan. The debtors did not “obtain” an extension of credit from the plaintiff through the use of the allegedly fraudulent borrowing base certificates. At most, the certificates induced the creditor to forbear collection activities, but it did not surrender or lose any legal rights as a result of its reliance on the documents. The debtors also did not engage in fraud in a fiduciary capacity or harm any property interest of the plaintiff. The plaintiff’s claim was discharged.

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

William T. Neary, Trustee v. Wendy Jean McKittrick (In re McKittrick) Adv. No. 06-0116, Case No. 06-10071-7 (08/24/2006) (349 B.R. 569) -- Judge Thomas S. Utschig 08/24/2006

Case Summary:
Debtor previously filed bankruptcy in 1998, and refiled in January 2006, shortly after the effective date of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The U.S. Trustee objected to the debtor’s discharge, contending that the debtor was not eligible to receive one under 11 U.S.C. § 727(a)(8), which as amended extended the period between chapter 7 discharges to eight years. The Court found that the debtor did not have a substantive right to receive a discharge within six years of her prior filing. As the bankruptcy amendments only affected her ability to prospectively file bankruptcy, she was subject to the statutory terms in effect when she filed the new case. Consequently, the debtor’s discharge was denied.

Statute/Rule References:
11 U.S.C.§ 727 -- Discharge

Gustavo Adolfo Manzanares v. State Farm Fire and Casualty Company (In re Manzanares) Adv. No. 05-1185, Case No. 04-10876-7 (5/24/2006) (345 B.R. 773) -- Judge Thomas S. Utschig 05/24/2006

Case Summary:
The debtor filed an adversary proceeding against State Farm for a violation of the discharge injunction. At the time of the debtor’s bankruptcy, State Farm’s subrogation unit had two lawsuits pending against the debtor; both lawsuits stemmed from the same automobile accident. State Farm was represented by different law firms in each action. One law firm was clearly notified of the bankruptcy, and forwarded that notice to State Farm’s collection/subrogation unit. An agent in the subrogation unit thereafter directed the dismissal of that lawsuit; the other lawsuit, however, was not dismissed. The lawyer for State Farm thereafter obtained a judgment against the debtor and had the debtor’s driver’s license suspended.

The court concluded that State Farm had actual knowledge of the debtor’s bankruptcy, and that the second claim had been discharged in the debtor’s bankruptcy. The court also found that the insurer was responsible for a willful violation of the discharge injunction when it failed to supervise the attorney acting as its agent or to notify him of the pending bankruptcy. The debtor was awarded $66,629.66 for lost wages, emotional distress, and the discomfort and costs associated with the loss of his driver’s license for almost six months.

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

Alan L. Goldberg, Trustee v. Countrywide Home Loans, Inc. (In re Seaway International Transport, Inc), Adv. No. 05-1426, Case No. 03-41181-7 and 03-41182-7 (03/08/2006) (341 B.R. 333) -- Judge Thomas S. Utschig 03/08/2006

Case Summary:
Trustee sought to avoid certain alleged fraudulent transfers under 11 U.S.C. §§ 544 and 548. The corporate debtor made payments on the home mortgage of its sole principal and officer totaling some $14,000 over the four years prior to bankruptcy. The trustee contended that the debtor did not receive “reasonably equivalent value” for the transfers. The debtor’s principal argued that the payments were a portion of his compensation. In general, payments on behalf of a third party can be avoided in bankruptcy unless there was a clear benefit (or “value”) to the debtor. The principal took no salary or compensation from the debtor companies; the court concluded that the payments constituted a pattern of compensation and that the debtor received an “indirect benefit” from the payments.

Statute/Rule References:
11 U.S.C. § 544 -- Trustee as Lien Creditor
11 U.S.C. § 548 -- Fraudulent Conveyance

Key Words:
Trustee as Lein Creditor
Fraudulent Conveyance

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