You are here

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.

Available Decisions:

  • Chief Judge Catherine J. Furay -- 2013 - present
  • Judge William V. Altenberger -- 2016 - present
  • Judge Rachel M. Blise -- 2021 - present
  • Judge William H. Frawley -- 1973 - 1986
  • Judge G. Michael Halfenger -- 2020 - present
  • Judge Beth E. Hanan -- 2023 - present
  • Judge Brett H. Ludwig -- 2017 - 2020
  • Judge Thomas M. Lynch -- 2018 - present
  • Judge Robert D. Martin -- 1990 - 2016
  • Judge Katherine M. Perhach -- 2020 - present
  • Judge Thomas S. Utschig -- 1986 - 2012

Chief Judge Catherine J. Furay

David Lester Warfel, Jr., Jeanne Marie Warfel, and Mark Harring v. 21st Mortgage Corporation (In re Warfel), Adv. Case No. 21-00002, Case No. 20-11651-13 (Indicative Ruling and Order Granting - 12/14/2023) -- Judge Catherine J. Furay 12/14/2023

Case Summary:
This Court entered an order avoiding 21st Mortgage's lien on the Warfels' manufactured home. 21st Mortgage appealed the ruling. While the appeal was pending, the parties agreed to settle the matter; the Warfels would grant 21st Mortgage a replacement lien on their property in exchange for postpetition financing. To accomplish the refinance, the parties needed to vacate the bankruptcy court's order; however, the bankruptcy court lacked jurisdiction to do so since the appeal was pending in front of the district court. So, the parties moved under Federal Rule of Bankruptcy Procedure 8008 for an indicative ruling. They filed a notice in the district court that they were seeking an indicative ruling from the bankruptcy court that would vacate the order and reinstate the lien. This Court issued an indicative ruling stating that it would grant the parties' request to vacate the order on remand, and the district court subsequently remanded the case and closed the appeal. The parties then submitted a joint motion to obtain postpetition credit.

Statutes/Rule Reference:
Fed. R. Bankr. P. 8008 -- Indicative Rulings

Key Term:
Indicative Ruling

In re Nordgaard, Case No. 23-10491-7 (11/29/2023) -- Judge Catherine J. Furay 11/29/2023

Case Summary:
Debtor Jennifer Nordgaard moved to receive funds held in her counsel’s trust account as exempt funds, and the Trustee objected and separately filed an objection to the Debtor’s claim of exemptions. Debtor divorced her ex-spouse several months before filing her petition. As part of the divorce, her husband was ordered to refinance the couples’ marital homestead and pay the Debtor her interest in the homestead’s equity. Her husband failed to refinance the property. Debtor listed the funds that she was entitled to receive from her husband on her Schedule C as exempt under Wisconsin’s homestead exemption and a retirement account exemption. Two months after filing, the divorce court ordered the ex-spouse to pay Debtor the funds, which were then held in Debtor’s counsel’s trust account. After the funds were received, the Debtor quitclaimed her interest in the property to her ex-spouse. Debtor then moved to receive the funds. The Trustee objected. The Court ruled for the Debtor regarding the homestead exemption, and against the Debtor regarding the retirement account exemption. The Debtor was entitled to receive the funds as exempt homestead proceeds because they derived from the Debtor’s former homestead and the Debtor did not relinquish her interest in the property until after the funds were paid. But the funds were not properly exempted as retirement funds because they were not held in a retirement account, they were not employer sponsored, and there was no assertion that the account the funds were held in qualified as an IRA under the Internal Revenue Code.

Statute References:
11 U.S.C. § 522(b)(2) -- Exemptions – State Law
Wis. Stat. § 815.18 -- Exemptions (Homestead and Retirement Benefits)
Wis. Stat. § 815.20 -- Homestead Exemption
Wis. Stat. § 990.01(14)

Key Terms:
Exemptions
Homestead Exemption
Retirement Account Exemption

David Lester Warfel, Jr., Jeanne Marie Warfel, and Mark Harring v. 21st Mortgage Corporation (In re Warfel), Adv. No. 21-00002, Case No. 20-11651-13 (08/09/2023) -- Judge Catherine J. Furay 08/09/2023

Case Summary:
On remand from the district court, the Court ruled in favor of the Warfels and avoided 21st Mortgage’s lien. The Court first determined that joinder of the standing trustee under Fed. R. Bankr. P. 7021 was proper. Second, the Court found that the trustee’s joinder was not precluded by undue prejudice to 21st Mortgage or unsecured creditors. There was no prejudice to 21st Mortgage because it was aware of all the facts and legal arguments that would be presented by the Debtors and had already litigated the issues at trial. There also wasn’t prejudice to unsecured creditors because they were still receiving at least as much as they would in a hypothetical chapter 7 liquidation. Third, the Court found that the complaint was not time barred by section 546 because the Trustee was simply being joined as a party, and the amended complaint adding him sufficiently related back to the original complaint. Finally, since no new facts were presented, the Court reiterated its original finding that 21st Mortgage’s lien was avoidable under section 544. The Court highlighted important facets of the evidence that indicated that the home was intended to be a permanent homestead and not moveable.

Statute/Rule References:
11 U.S.C. § 544(b) -- Lien Avoidance
11 U.S.C. § 546 -- Limitations on Avoiding Powers
Fed. R. Bankr. P. 7021 -- Misjoinder and Non-Joinder of Parties
Fed. R. Civ. P. 21 -- Misjoinder and Nonjoinder of Parties
Wis. Stat. § 101.9218(1), (2) -- Applicability of manufactured home security provisions

Key Terms:
Joinder
Lien Avoidance

Dennis Westley Eliason and Amy Marie Eliason v. Bank of North Dakota (In re Eliason), Adv. No. 23-00002, Case No. 21-12161-7 (08/08/2023) (653 B.R. 646) -- Judge Catherine J. Furay 08/08/2023

Case Summary:
Debtors Amy and Dennis Eliason sued the Bank of North Dakota to have Amy’s student loan debt discharged as an undue hardship under Code section 523(a)(8). Amy took out the loans to attend Globe University in Eau Claire, with the goal of becoming a certified medical assistant. Amy was misled about the medical assistant program at Globe and was thus never able to obtain her medical assistant certification. The Court discharged the loans. Applying the Brunner test, it was clear that Amy and Dennis maintained a minimal standard of living. Most of their expenses were at or below the national standards for a household of three. Second, the Court found that Amy and Dennis have never been able to significantly increase their earning potential, and each have only held low-skilled hourly wage positions for most of the past decade. Dennis has been found administratively disabled for several years and cannot work more than a couple of hours each day. And Amy, having never obtained her medical assistant certification, has been working only part-time, low-wage positions, in between periods of unemployment due to a complicated pregnancy and the deaths of her parents. Also, since the loans were in default, the Bank of North Dakota conceded that if they were found nondischargeable, the entire balance would be due and owing after the case was closed. Lastly, the Court found that the Debtors had made a good faith effort to stay on top of their loans but were simply unable to. The Debtors received at least two deferments and a forbearance during the loan repayment period. They were on a zero-dollar monthly payment schedule for their federal student loans. In sum, the Debtors satisfied the prongs of Brunner, and the loans were discharged.

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

Key Terms:
Brunner Test
Student Loans
Undue Hardship

Paul Burritt v. Shaylynn M. Hoven (In re Hoven), Adv. No. 22-00035, Case No. 22-10605-7 (04/11/2023) (652 B.R. 531) -- Judge Catherine J. Furay 04/11/2023

Case Summary:
Plaintiff Paul Burritt sued Debtor/Defendant Shaylynn Hoven to have his debt be declared nondischargeable under a theory of res judicata and under Code section 523(a)(6). Burritt won summary judgment against Hoven in a state court for making false allegations of sexual assault. The state court judge awarded Burritt nearly $750,000. After Hoven filed bankruptcy, Burritt sought to have the damage award declared nondischargeable under res judicata and section 523(a)(6). The Court denied the complaint on both counts. First, the Court found that the issue wasn’t actually litigated in state court (due to the summary judgment), the state court did not make all the findings necessary to satisfy the elements of 523(a)(6), and that the damages awarded by the state court were not justified. Second, the Court ruled, based on the evidence, that Hoven’s actions were willful but not malicious. The evidence showed that Hoven was aware her actions were wrong at the time she committed them, but not that she understood the consequences of making the false accusations.

Statutes/Rules:
11 U.S.C. § 523(a)(6)

Key Terms:
Collateral Estoppel
Res Judicata
Willful and Malicious Injury

Ben Parr v. Clinton J. Rassbach and Molly A. Rassbach (In re Rassbach), Adv. No. 22-00050, Case No. 22-11344-7 (03/13/2023) 650 B.R. 568 -- Judge Catherine J. Furay 03/13/2023

Case Summary:
Defendants Clinton and Molly Rassbach moved to dismiss Plaintiff's complaint based on a failure to state a claim. Defendants argued that the complaint failed to state a plausible claim for relief under sections 523(a)(2)(A), 523(a)(6), and against Molly Rassbach individually. The Plaintiff responded arguing that the Court should apply the doctrines of res judicata and collateral estoppel due to the underlying state court action, and that the complaint otherwise states claims for relief under 523(a)(2)(A) and 523(a)(6). In reply, the Defendants claimed that the Plaintiff mischaracterized the findings of the state court. This Court denied the Defendants' motion. First, this Court did not apply the preclusive effect of res judicata, but looked beyond the state court docket as permitted under Brown v. Felsen to find that there was a plausible claim for relief under sections 523(a)(2)(A) and 523(a)(6). Second, the Court held that Molly Rassbach could potentially have imputed liability for Clinton Rassbach's actions as a co-owner of the Defendants' LLC and the recent Supreme Court decision Bartenwerfer v. Buckley. Also, Molly is an appropriate party under Federal Rule 20.

Statute/Rule References:
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - false pretenses, false representation, or fraud
11 U.S.C. § 523(a)(6) -- Nondischargeability - willful and malicious injury
Fed. R. Civ. P. 12(b)(6) -- Failure to State a Claim
Fed. R. Civ. P. 20 -- Permissive Joinder of Parties

Key Terms:
Collateral Estoppel
Permissive Joinder
Res Judicata

Judge Rachel M. Blise

Mark J. Wittman, Trustee v. Jennifer E. Masewicz and Robert J. Masewicz (In re Masewicz), Adv. No. 23-00009, Case No. 21-12553-7 (09/28/2023) -- Judge Rachel M. Blise 09/28/2023

Case Summary:
The chapter 7 trustee filed a three-count complaint under 11 U.S.C. § 544(b) and Wisconsin Statutes §§ 242.04(1)(a), 242.04(1)(b), and 242.05(1) against the debtor and his non-filing spouse to recover an allegedly fraudulent transfer of the couple’s residence, which the debtor and his spouse transferred to only the spouse via quit claim deed in 2017.  The parties disputed whether the trustee’s claims were timely.  Section 544(b) allows a trustee to avoid a transfer of property that is voidable under applicable law by a creditor holding an allowable unsecured claim.  Under the applicable Wisconsin law, the statute of limitations for a fraudulent transfer claim is generally one or four years.  However, if the IRS is the creditor seeking to avoid a fraudulent transfer, then the applicable reach-back period is 10 years under 26 U.S.C. § 6502(a)(1).  The Court determined that the trustee could step into the shoes of the IRS and take advantage of the longer limitations period available to the IRS.  The Court reasoned that there is no limitation in § 544(b), and that the claim should be allowed to proceed if the underlying creditor (here, the IRS) could avoid the transfer under the law applicable to that creditor.  Conversely, a claim should not be allowed to proceed if the underlying creditor could not pursue the claim.  The Court also held that the debtor-transferor was a proper party defendant to the fraudulent transfer claim because a transferor could be made a party to a fraudulent transfer action if he had retained some benefit in the property after it was transferred.  Finally, the Court held that the trustee’s allegations were insufficient under Civil Rules 8 and 9 and on that basis granted the motions to dismiss.  The Court held that the trustee had pleaded insufficient facts to support an inference that the debtor had transferred the property with actual intent to defraud his creditors.  The Court also held that the trustee’s constructive fraudulent transfer claim was insufficient because the trustee had not pleaded facts regarding the value, or an estimate of the value, of the property at the time of the transfer and had not pleaded facts demonstrating that the debtor was insolvent at the time of or because of the transfer.  The Court granted the trustee leave to amend the complaint.

Statute/Rules References:
11 U.S.C. § 544(b) -- Trustee as Successor to Certain Creditors
26 U.S.C. § 6502(a)(1) -- Collection After Assessment
Wis. Stat. §§ 242.04(1)(a), (1)(b) -- Transfers Fraudulent as to Present and Future Creditors
Wis. Stat. § 242.05(1) -- Transfers Fraudulent as to Present Creditors

Key Terms:
Fraudulent Transfer

In re Peterson, Case No. 22-11787-7 (06/08/2023) -- Judge Rachel M. Blise 06/08/2023

Case Summary:
The Court denied confirmation of the debtors’ chapter 13 plan because it contemplated payments over a period of more than 60 months, contrary to the requirements of 11 U.S.C. § 1322(d).  The debtors’ mortgage on their principal residence had matured prepetition, and the debtors proposed a plan that would amortize the balance over 84 months.  The trustee would distribute payments to the creditor in months 1 through 60 of the re-amortized term, and the debtors would pay the creditor directly in months 61 through 84.  The debtors relied on § 1322(c)(2), which provides that a plan can modify a claim secured by a debtor’s principal residence if the last payment under the original payment term is due before the end of the plan term.  The Court held that such a modification in a plan cannot include payments beyond the end of the plan term.  The Court held that direct payments made to a creditor whose claim is provided for by the plan are “payments under the plan” for purposes of § 1328(a).  The direct payments in months 61 to 84 were also necessarily “payments” for purposes of § 1322(d).  Under that section, all payments, including all payments made by the debtor directly to a creditor and all payments made to the trustee for distribution to creditors, must be completed within a maximum term of 60 months.  The debtors’ plan payments would not complete within the maximum allowed term, so the plan could not be affirmed.  The Court also rejected the debtors’ argument that the plan was confirmable because the creditor consented to the plan’s terms.  Even if a creditor consents to its treatment under § 1325(a)(5), the plan still must comply with the other provisions in chapter 13, as required by § 1325(a)(1).

Statute/Rule References:
11 U.S.C. § 1322
11 U.S.C. § 1325
11 U.S.C. § 1328

Key Terms:
Confirmation

 
In re Snyder, Case No. 22-11334-13 (03/31/2023) -- Judge Rachel M. Blise 03/31/2023

Case Summary:
The Court denied confirmation of the debtor’s chapter 13 plan because it did not meet the requirements of 11 U.S.C. § 1325(a)(9).  That section requires that debtors “file[] all applicable Federal, State, and local tax returns as required by section 1308.”  Section 1308 requires that all tax returns due for the four-year period before the petition date must be filed before the meeting of creditors is concluded.  The debtor filed required tax returns after the meeting of creditors but before confirmation, and he argued that § 1325(a)(9) should not prevent the Court from confirming the plan.  Under the debtor’s reading of the Code, § 1325(a)(9) would mandate only that the relevant tax returns are filed before confirmation.  The debtor argued that incorporating § 1308’s timing requirement would render superfluous § 1307(e), which provides for dismissal of cases where debtors do not comply with § 1308.  The Court explained that while § 1325(a)(9) and § 1307(e) may sometimes lead to the same outcome, the statutes merely overlap and are not so similar that departure from the plain meaning of § 1329(a)(9) is warranted.

The Court adopted the reasoning of In re Long, 603 B.R. 812 (Bankr. E.D. Wis. 2019), and held that a chapter 13 debtor must file the required tax returns before the deadline in § 1308 as a condition of plan confirmation.

Statute/Rule References:
11 U.S.C. § 1325(a)(9) -- Plan Confirmation - tax returns
11 U.S.C. § 1307(e) -- Conversion or dismissal - tax filings
11 U.S.C. § 1308 -- Filing of prepetition tax returns

Key Term:
Taxes / tax returns

In re Thompson, Case No. 22-11921-7 (10/03/2023) -- Judge Rachel M. Blise 03/10/2023

Case Summary:
The bankruptcy court granted a general contractor's motion for an order confirming that it could pursue its claims against the individual debtors' limited liability company.  The general contractor, which had subcontracted with the debtors' LLC for work on a construction project, sued the LLC and and the debtors in state court, alleging theft by contractor and civil theft.  After the individual debtors filed bankruptcy, the general contractor asked the bankruptcy court to confirm that the automatic stay did not apply to the debtors' LLC or to grant relief from the stay if it did.  The bankruptcy court noted that while the stay is broad and automatic, it generally does not apply to nondebtors.  The Seventh Circuit in In re Fernstrom Storage & Van Co., 938 F.2d 731 (7th Cir. 1991), stated that the § 362(a)(1) stay may be applied to a nondebtor when “there is such identity between the debtor and the third-party defendant that the debtor may be said to be the real party defendant and that a judgment against the third-party defendant will in effect be a judgment or finding against the debtor.”  See also A.H. Robins Co. v. Piccinin, 788 F.2d 994 (4th Cir. 1986) (exception first applied).  The bankruptcy court concluded that such stay of litigation against a nondebtor does not apply automatically and must instead be ordered by the court.  The bankruptcy court determined that the matter did not satisfy the “identity of interest” test under A.H. Robins because any judgment against the debtors’ LLC under Wisconsin's theft-by-contractor statute, Wis. Stat. § 779.02(5), would not necessarily impact their bankruptcy case.  The Wisconsin statute indicated that members of an LLC are liable only if they are "responsible for the misappropriation."  Thus, even assuming the general contractor could prove that the LLC committed theft by contractor, it would also need to prove, at a minimum, that the debtors were responsible for the misappropriation before the debtors would be liable.  Because the general contractor's claims against the LLC could be separated from its claims against the debtors, and the debtors had not demonstrated that success on the claims against the LLC would have an identifiable impact on the debtors or the bankruptcy estate, the court declined to extend the § 362(a)(1) stay to enjoin the general contractor from proceeding against the debtors' LLC in state court.

Statute References: 
11 U.S.C. § 362(a)(1)
Wis. Stat. § 779.02(5)

Key Terms: 
Automatic Stay
Non-Debtor
Enjoin
Theft by Contractor
Limited Liability Company

Pages