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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.

Chief Judge Catherine J. Furay

Brenda L. Zeddun v. Francis F. Fiore, Jr. (In re Szadziewicz), Adv. No. 16-0015, Case No. 14-10716-7 (04/17/2017) -- Judge Catherine J. Furay 04/17/2017

Case Summary:
Trustee filed an adversary complaint against Fiore alleging conveyance of a home constituted a fraudulent transfer. On August 23, 2016, the Trustee moved to dismiss her Complaint with prejudice. Fiore moved for sanctions under Fed. R. Bankr. P. 9011 arguing the Trustee’s Complaint lacked an evidentiary foundation. The Court denied Fiore’s motion for sanctions concluding Fiore did not comply with Rule 9011’s safe-harbor. In addition, the Court concluded Fiore’s motion for sanction was untimely. While Rule 9011 does not set a specific time for bringing a sanctions motion, in the Seventh Circuit, a party should file a motion for sanctions “as soon as practicable after discovery of a Rule 11 violation.” Kaplan v. Zenner, 956 F.2d 149, 151 (7th Cir. 1992). Fiore asserted the Trustee violated Rule 9011 on February 22, 2016, but did not move for sanctions until September 7, 2016, over six months after the first Complaint and over four months after the Amended Complaint. Accordingly, the Court denied Fiore’s motion for sanctions.

Statute/Rule References:
Fed. R. Bankr. P. 9011 -- Sanctions
11 U.S.C. § 544(b)
Wis. Stat. § 242.04 -- Transfers Fraudulent as to Present and Future Creditors

Key Terms:
Safe Harbor

Hellenbrand Glass, LLC v. Scott G. Pulvermacher and Jean M. Pulvermacher (In re Pulvermacher), Adv. No. 16-0025, Case No. 16-10249-7 (03/31/2017) (567 B.R. 881) -- Judge Catherine J. Furay 03/31/2017

Case Summary:
Plaintiff Hellenbrand Glass, LLC filed an adversary complaint seeking a determination that a debt evidenced by a state court judgment was nondischargeable under 11 U.S.C. § 523(a)(4). The parties filed a stipulation agreeing inter alia that $15,457.03 was nondischargeable. They also stipulated that the state court trebled this amount pursuant to Wis. Stats. §§ 895.446 and 943.20. The only issue before the Court was whether the treble damage portion of the debt was dischargeable. The parties agreed there were no material issues of fact and the court ordered briefs. To resolve the state court action, the Plaintiff and Debtor Scott G. Pulvermacher entered into a settlement agreement intending to resolve the Plaintiff’s claim for theft by contractor Plaintiff. The Court concluded that the trust created by Wis. Stat. § 779.02(5) establishes the type of express statutory trust contemplated by 11 U.S.C. § 523(a)(4). Accordingly, the Court found the entire debt nondischargeable reasoning a party’s breach of a settlement agreement disposing of the underlying action does not erase the history of the debt’s origin.

Statute/Rule References:
11 U.S.C. § 523(a)(4) -- Nondischargeability - Fraud or Defalcation in Fiduciary Capacity
Wis. Stat. § 779.02(5) -- Theft by Contractor
Wis. Stat. § 895.446 -- Action for Property Damage or Loss
Wis. Stat. § 943.20 -- Theft

Key Terms:
Theft by Contractor

In re Lisse, Case No. 16-12556-13 (03/29/2017) (567 B.R. 813) -- Judge Catherine J. Furay 03/29/2017

Case Summary:
Debtor moved the court to impose sanctions under Rule 9011 and 28 U.S.C. § 1927 against counsel for mortgage creditor alleging three (3) separate pleadings violated Rule 9011. The Debtor alleged opposing counsel deliberately misidentified the mortgage creditor in an effort to "conceal the authority under which [counsel] purport[ed] to engage in litigation activities . . . ." The Court concluded sanctions were not warranted because (1) the mortgage creditor filed the pleadings in an effort to protect its security interest in collateral; (2) the mortgage creditor demonstrated a right to payment in state foreclosure proceedings; and (3) the mortgage creditor proposed a legal theory creating a prima facie case as to why the case should be dismissed.

Statute/Rule References:
11 U.S.C. § 1322(b)(2) -- Modification of Rights of Secured Claimants
28 U.S.C. § 1927 -- Counsel’s Liability for Excessive Costs
Fed. R. Bankr. P. 9011 -- Sanctions

In re Lisse, Case No. 16-12556-13 (03/06/2017) (565 B.R. 903) -- Judge Catherine J. Furay 03/06/2017

Case Summary:
Debtor Sondra K. Lisse filed a Chapter 13 Plan. Mortgage creditor HSBC objected to confirmation. At a telephonic hearing, the Court permitted discovery. HSBC requested an extension of time; Debtor’s counsel agreed under certain conditions that were not agreeable to HSBC. HSBC then moved to dismiss Debtor’s case. Debtor moved for sanctions under Fed. R. Bankr. P. 7037 or, in the alternative, to determine the sufficiency of responses to her discovery requests, and compel responses. Digging through the cascade of voluminous filings, the Court found Debtor failed to certify that she conferred or attempted to confer in good faith with HSBC prior to bring her motion to compel because she offered HSBC an ultimatum.

Statute/Rule References:
Fed. R. Bankr. P. 7033 -- Interrogatories to Parties
Fed. R. Bankr. P. 7036(a)(6) -- Motion Requesting the Sufficiency of an Answer or Objection
Fed. R. Bankr. P. 7037 -- Failure to Make Discovery; Sanctions

Katherine Hebl v. Bradley A. Windeshausen (In re Windeshausen), Adv. No. 15-0083, Case No. 15-10704-7 (03/03/2017) (568 B.R. 299) -- Judge Catherine J. Furay 03/03/2017

Case Summary:
Plaintiff Katherine Hebl brought this action to have her arbitration award of $310,000 declared nondischargeable under 11 U.S.C. § 523(a)(2)(A) or, in the alternative, section 523(a)(4). Plaintiff alleged her business partner Bradley Windeshausen over the course of three and one-half years embezzled funds from a bar in which they operated as equal partners. At a continued hearing, the Court granted in part and denied in part Defendant’s motion to dismiss, finding Plaintiff failed to established section 523(a)(2)(A)’s intent element, but made a prima facie case for liability under section 523(a)(4). The Court found the debt dischargeable because the Plaintiff failed to establish a fiduciary relationship under section 523(a)(4), and failed to establish the element of intent. In addition, the Court found Plaintiff did not establish the existence of a “debt.”

Statute/Rule References:
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - Fraud
11 U.S.C. § 523(a)(4) -- Nondischargeability - Embezzlement
11 U.S.C. § 523(a)(4) -- Nondischargeability - Fraud or Defalcation in Fiduciary Capacity
11 U.S.C. § 523(a)(4) -- Nondischargeability - Larceny
Wis. Stat. § 183.0402 -- Duties of Managers and Members

Key Terms:
Embezzlement
Fiduciary Capacity
Fraud - Fiduciary Capacity
Larceny

In re Kitzerow, Case No. 15-13449-13 (02/07/2017) (573 B.R. 766) -- Judge Catherine J. Furay 02/07/2017

Case Summary:
Debtor filed a voluntary Chapter 7 petition on September 23, 2015. She converted her case to a Chapter 13 on December 1, 2015, and the Court entered an order to that effect. Consequently, a new meeting of creditors under section 341(a) was set. Notice of the section 341(a) meeting was sent to all creditors, and a new claims bar date was set for April 14, 2016, by operation of Rule 3002(c). The Debtor then filed a Chapter 13 plan and schedules listing specific treatment of a secured creditor. Notice of the plan was sent to all creditors. With no objections, the Court confirmed the Debtor’s plan. The April 14, 2016, claims bar date came and passed without the secured creditor filing a proof of claim. Subsequently, the additional 30 days permitting the Debtor to file a proof of claim also came and passed without the filing of a proof of claim on the secured creditor’s behalf. Debtor filed a proof of claim for the secured creditor on October 26, 2016, approximately six months after the claims bar date. The Trustee requested a hearing. The Court denied the proof of claim, but upheld and enforced the terms and provisions of the confirmed plan. By distinguishing In re Pajian, 785 F.3d 1161 (7th Cir. 2015), and In re Hrubec, 544 B.R. 397 (Bankr. N.D. Ill. 2016), the Court concluded that while the better practice would have been for the secured creditor (or the Debtor or Trustee on its behalf) to file a claim, section 1327(a) binds the debtor and the creditor to the terms of the plan. And, importantly, section 1326(a) directs the trustee to distribute payments in accordance with the plan without referencing Rules 3002 and 3021. Finally, when there is specific notice of the secured creditor’s claim in a proposed plan, plan confirmation, under certain circumstances, serves as a method to determine a secured claim’s treatment.

Statute/Rule References:
11 U.S.C. § 502 -- Allowance of Claims
11 U.S.C. § 1326 -- Payments
11 U.S.C. § 1327 -- Effect of Confirmation
Fed. R. Bankr. P. 3002 -- Filing Proof of Claim or Interest
Fed. R. Bankr. P. 3021 -- Distribution Under Plan

Key Terms:
Claims - Late Filed
Plan Payments

Michael E. Kepler, Trustee v. Estate of Shirley A. Maiers, et al. (In re Hinzmann), Adv. No. 16-77, Case No. 15-10857-7 (01/09/2017) -- Judge Catherine J. Furay 01/09/2017

Case Summary:
The Plaintiff, Chapter 7 Trustee Michael E. Kepler, filed an adversary complaint against Defendant, Thomas P. Maiers as Executor of the Estate of Shirley A. Maiers, seeking inter alia an order requiring the Defendant to turn over Debtor Ruth A. Hinzmann’s one-sixth beneficiary interest. In lieu of filing an answer, Defendant moved the Court for a change of venue pursuant to 28 U.S.C. § 1412. The Court denied the Defendant’s Motion for a Change of Venue concluding the Defendant failed to establish by a preponderance of the evidence that a change of venue was warranted.

Statute/Rule References:
11 U.S.C. § 541(a)(5)
28 U.S.C. § 1409 -- Venue of Proceedings
28 U.S.C. § 1412 -- Change of Venue
Iowa Code § 633.471 -- Right of Retainer

Hyrad Corporation and Howard C. Nelson v. Frederick J. Furrer (In re Furrer), Adv. No. 16-0049, Case No. 16-11090-7 (12/23/2016) -- Judge Catherine J. Furay 12/23/2016

Case Summary:
Plaintiffs Hyrad Corporation and Howard C. Nelson brought this action to have their judgment for breach of fiduciary duty and theft against Frederick J. Furrer declared nondischargeable under 11 U.S.C. § 523(a)(4) or in the alternative under 11 U.S.C. § 523(a)(6). Plaintiffs moved for summary judgment. The Court found summary judgment proper under § 523(a)(4), and gave preclusive effect to the state court's judgment. Defendant argued there were material facts in dispute with regard to whether he held a position of "ascendancy" over the other directors, and with respect to whether he furnished the state court with original source documents. The Court found Furrer held a position of ascendancy over the other directors, granted summary judgment, and declared the debt along with state court awarded exemplary damages were nondischargeable.

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

Key Terms:
Ascendancy
Defalcation while Acting as a Fiduciary
Fiduciary Capacity
Fraud - Fiduciary Capacity

In re Gullicksrud, Case No. 16-11860-12 (09/29/2016) -- Judge Catherine J. Furay 09/29/2016

Case Summary:
Debtor filed a voluntary Chapter 12 petition on May 24, 2016. According to 11 U.S.C. § 1221, the Chapter 12 Plan was due on August 22, 2016. At a telephonic hearing, the United States Trustee raised a conflict of interest with respect to the Debtor’s attorneys. Accordingly, Debtor retained new counsel, but only after the prescribed time under § 1221 had lapsed. Debtor’s new counsel immediately moved for an extension to file a Plan. No party in interest moved to dismiss. The Court concluded Debtor clearly demonstrated that the need for an extension was attributable to circumstances beyond the Debtor’s control. Debtor could not file a plan in good faith due to a pending valuation hearing which was critical to the formulation of a plan. Debtor’s failure to file a timely plan was due to her prior counsel’s conflict of interest in representing her parents, which also affected her ability to formulate a plan. Finally, Debtor did not act in bad faith in the delay to file a plan as she retained substitute counsel once the apparent conflict was brought to light.

Statute/Rule References:
11 U.S.C. § 1208(c)(3) -- Dismissal for Failure to File a Plan Timely
11 U.S.C. § 1221 -- Filing of Plan

Key Terms:
Extension of Time to File Chapter 12 Plan

In re Stincic, Case No. 16-10129-13 (09/29/2016) (559 B.R. 890) -- Judge Catherine J. Furay 09/29/2016

Case Summary:
Johnson Bank held two mortgages against Debtor’s real property, and began foreclosure proceedings in state court. In state court, Debtor unsuccessfully attempted to rescind the first mortgage by raising a Truth in Lending Act defense. Debtor then filed a Chapter 13 petition. Johnson Bank moved for relief from stay. Debtor once again sought to rescind the first mortgage. Johnson Bank argued Debtor’s opposition to relief from stay was a disguised attempt for the Bankruptcy Court to review a state court judgement, and therefore, barred by Rooker-Feldman. Relying on the Seventh Circuit’s reasoning in Taylor v. Fannie Mae, 374 F.3d 529 (7th Cir. 2004), the Court found that the Debtor had a reasonable opportunity to raise the Truth in Lending Act defense in state court. As a result, by asking the Court to rule the first mortgage was rescinded, Debtor sought to overturn the state court judgment. Thus, the Court found his federal remedy was “inextricably intertwined” with the state court judgment. Success in the Bankruptcy Court would have allowed the Debtor to avoid the state court’s judgment. Accordingly, Rooker-Feldman doctrine barred review.

Statute/Rule References:
11 U.S.C. § 362 -- Automatic Stay
11 U.S.C. § 362(g) -- Automatic Stay - Burden of Proof

Key Terms:
Claim Preclusion
Rooker-Feldman
Truth in Lending Act (TILA)

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