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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

Matthew S. Deardorff and Terri S. Deardorff v. Ford Motor Credit Company (In re Deardorff), Adv. No. 95-1164, Case No. 95-12152-7 (04/10/1996) (195 B.R. 904) -- Judge Thomas S. Utschig 04/10/1996

Case Summary:
Debtors filed adversary proceeding, contending that garnishment payments to creditor within the 90 days preceding bankruptcy constituted a preference under 11 U.S.C. § 547.  The “transfer” of the debtor’s wages did not take place until the point at which the debtor earned the wages.  Until that time, he had no right to the funds and could not transfer them before that time.  As a result, the garnishment of his wages within the 90 days prior to the bankruptcy filing constituted a preference.  Citing In re Ballard, 131 B.R. 97 (Bankr. W.D. Wis. 1991).

Key Terms:
Preferences

In re Plover Motel, Inc., Case No. 94-50567-7 (03/26/1996) -- Judge Thomas S. Utschig 03/26/1996

Case Summary:
Chapter 7 trustee brought motion to have creditor disgorge allegedly improper payments.  Court examined stipulations entered into by the debtor while in chapter 11 and concluded that creditor had not acted improperly.  Creditor completed construction of motel project, and debtor and certain mortgage holders had opportunity to purchase property.  They were unable to do so, and that failure was unrelated to any actions of the creditor.

In a related matter, the bankruptcy court’s denial of the mortgage holders’ motion for an extension of time in which to file an appeal was affirmed by the district court.

Key Terms:
Contract Disputes

Trane Federal Credit Union v. John M Conder and Debra A. Conder (In re Conder), Adv. No. 95-2132, Case No. 95-21423-7 (12/20/1995) (196 B.R. 104) -- Judge Thomas S. Utschig 12/20/1995

Case Summary:
Debtor did not “embezzle” loan proceeds used to purchase truck.  Embezzlement under 11 U.S.C. § 523(a)(4) is the fraudulent appropriation of property by a person to whom the property has been entrusted, and creditor must prove that debtor used property for a purpose other than that for which it was intended.  Debtor used loan proceeds to purchase truck, as contemplated by the parties.  Thereafter, when parties discovered truck was actually stolen property, debtor’s use of the refund to purchase another truck, rather than return the refund to the bank, did not constitute embezzlement because the truck was the debtor’s property, not the creditor’s.  The creditor held merely a security interest in the property.  Further, there was no injury within the meaning of 11 U.S.C. § 523(a)(6) because the debtor had an honest belief that the bank’s lien no longer existed.

Statue/Rule References:
11 U.S.C. § 523(a)(4) -- Nondischargeability - Embezzlement
11 U.S.C. § 523(a)(6) -- Nondischargeability - Willful and Malicious Injury

Key Terms:
Embezzlement
Willful and Malicious

In re Wright, Case No. 94-13318-7 (12/01/1995) (196 B.R. 97) -- Judge Thomas S. Utschig 12/01/1995

Case Summary:
Dispute between two creditors over purchase money status of one creditor’s lien on a tractor.  Creditor claimed to have perfected its PMSI by mailing the UCC-1 financing statement to the appropriate office for filing.  However, there was no record of the financing statement having been filed, or even received by the filing office.  Creditor contended that the common law “presumption of receipt” mandated that it be deemed to have filed the financing statement when it was mailed.

Court held that the creditor had to demonstrate actual receipt of the financing statement by the filing office.  Although Wis. Stat. § 409.403(1) relieves the creditor of any responsibility for the filing officer’s failure to properly docket the financing statement, the creditor still must prove that the item was actually presented for filing.  The “presumption of receipt” is insufficient to do so given the need to prove not only the fact of receipt but the time of filing for priority purposes.  The court also rejected the creditor’s argument that the second lienholder’s claim to the tractor should be subordinated under either unjust enrichment or the principles of equitable subordination.

Statue/Rule References:
11 U.S.C. § 510(c) -- Equitable Subordination
Wis Stat. § 409.403(1) -- Security interests - Filing

Key Terms:
Equitable Subordination
Financing Statements -- Perfection
Security Interests -- Time of Filing

In re Dienberg, Case No. 95-51608-7 (11/08/1995) -- Judge Thomas S. Utschig 11/08/1995

Case Summary:
The court denied creditor’s motion for relief from the stay, together with motion to temporarily revoke the debtors’ discharge.  Creditor sought to enter a judgment in state court in connection with a tort claim.  However, the debtors’ discharge precluded the entry of any judgment against the debtors personally.  Further, the court did not have the authority to temporarily revoke the debtors’ discharge.  Under the sixty-day period contemplated by Fed. R. Bankr. P. 4004(a) and 4007(c), the court shall “forthwith” grant the debtors’ discharge.  Despite creditor’s belief that issuance of discharge was “unfair,” debtors were entitled to discharge in the absence of any objection to discharge or waiver by the debtors.

Statue/Rule References:
Fed. R. Bankr. P. 4004(a) -- Time for Filing Objection to Discharge
Fed. R. Bankr. P. 4007(c) -- Time for Filing Nondischargeability Complaint

Key Terms:
Discharge

Steven J. Derrick and Margaret M. Derrick v. Richard L. Grafe Commodities, Inc (In re Derrick), Adv. No. 93-1028, Case No. 93-10404-12 (10/13/1995) -- Judge Thomas S. Utschig 10/13/1995

Case Summary:
Upon dismissal of debtor’s chapter 12 case, creditor sought to reinstate judicial lien which had been avoided as a preferential transfer during the pendency of the case.  The debtor objected, contending that the lien could not be reinstated.  The court held that under 11 U.S.C. § 349, the general idea is that upon dismissal the parties are returned to the position they were in when the petition was filed.  Under the statute, preferential transfers are reinstated unless the court, “for cause,” orders otherwise.

“Cause” simply means an acceptable reason, and in determining whether there is such a reason the court should focus upon the interests of creditors or other third parties who may suffer injury, rather than the debtor.  There must have been some right gained in the course of the bankruptcy which is threatened by reinstatement.  Here, the debtor could offer no such acceptable reason.  The burden was upon the debtor to justify a deviation from the natural operation of § 349, and the debtor could not do so.

Statue/Rule References:
11 U.S.C. § 349 -- Dismissal

Key Terms:
Dismissal
Judicial Liens
Satisfaction of Judgment

In re Zersen, Case No. 95-50786-13 (09/29/1995) (189 B.R. 732) -- Judge Thomas S. Utschig 09/29/1995

Case Summary:
Bank objected to confirmation of chapter 13 plan where the debtors proposed to pay the bank only what was owed on a mortgage loan on their home.  The bank contended that the home constituted collateral for a business note as well, and that the home loan was secured by the guaranty of certain third parties.  The court found that the effect of the co-debtor stay of 11 U.S.C. § 1301 permitted the debtors to pay obligations guaranteed by third parties under a chapter 13 plan; it was only if the plan did not provide for full payment of the guaranteed obligation that the creditor would be permitted to pursue the guarantor.

Furthermore, given the bank’s lack of documentation, the only secured obligation was the home loan.  The business debt was not secured by the home, as the documents were ambiguous and those ambiguities would be construed against the bank as the drafter of the documents.  Accordingly, the bank’s objections to confirmation were overruled, and the plan was confirmed.

Statue/Rule References:
11 U.S.C. § 1301 -- Co-Debtor Stay

Key Terms:
Non-Debtors

Hartje Lumber, Inc., v. Fred J. Brach, d/b/a B & B Carpentry and Sonya M. Brach (In re Brach), Adv. No. 95-2043. Case No. 94-22669-7 (08/03/1995) (195 B.R. 897) -- Judge Thomas S. Utschig 08/03/1995

Case Summary:
Creditor filed adversary proceeding objecting to debtor’s discharge after the time specified in bankruptcy rule 4007.  Debtor filed motion to dismiss.  The court concluded that the fact that the court issued an erroneous notice which did not specify a last date to object to discharge and which incorrectly characterized the debtor as a “partnership” necessitated allowance of the complaint.  While a court may not extend the time to object to discharge if the creditor fails to file a motion for extension of time as required by the rule, the court can accept an untimely complaint if it is justified under the circumstances. The only justification is if the court issues an erroneous notice, which happened in this case.

Statue/Rule References:
Fed. R. Bankr. P. 4007(c) -- Time for Filing Nondischargeability Complaint

Key Terms:
Complaints – Nondischargeability – Late - Filed

Rubino, Inc., David G. Stauffacher, and Exel Royal, LLC v. Royal Plastics, Inc (In re Royal Plastics, Inc.) Adv. No. 94-2114, Case No. 94-20990-11 (11/30/1994) -- Judge Thomas S. Utschig 11/30/1994

Case Summary:
Creditors of chapter 11 debtor contended that they were entitled to the revenues generated by the debtor’s use of certain plastic molds.  These revenues were generated by the debtor prior to the petition date, but were in the debtor’s possession when the case was filed.  The creditors contended that they were entitled to the funds because the debtor did not own the molds.  Given the absence of any trust relationship between the parties, however, and the extraordinarily broad definition of “property of the estate” under 11 U.S.C. § 541, the court concluded that the debtor held legal and equitable title to the funds when the bankruptcy was filed.  Accordingly, the creditor’s adversary proceeding was dismissed.

Statue/Rule References:
11 U.S.C. § 541 -- Property of the Estate

Key Terms:
Property of the Estate

Mary Bowman (f/k/a Mary Strack) v. Jeffrey J. Strack (In re Strack), Adv. No. 94-1089, Case No. 92-13420-7 (11/08/1994) -- Judge Thomas S. Utschig 11/08/1994

Case Summary:
In wife’s action to have certain debts declared nondischargeable under 11 U.S.C. § 523(a)(5), the court determined that a portion of the debts which the debtor was to have indemnified his former spouse from constituted obligations “actually in the nature of” alimony, maintenance or support.  The issue of dischargeability under § 523(a)(5) is a matter of federal law, not state law.  The court found that it was not possible to consider the debtor’s present financial condition or the changes in circumstance of both parties since the time of the divorce.  The purpose of the section was to look at whether the obligation was intended as support at the time of the divorce.  As a result, the court found certain obligations to have been contemplated as support, and others, including a debt to the wife’s mother, to have been intended as property division.

Statue/Rule References:
11 U.S.C. § 523(a)(5) -- Nondischargeability - Divorce Decrees

Key Terms:
Divorce Decrees -- Maintenance or Property Division

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