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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

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)

In re Roen, Case No. 16-10037-7 (08/26/2016) (556 B.R. 401) -- Judge Catherine J. Furay 08/26/2016

Case Summary:
Debtors Julie Roen and Robert Dorshak filed a voluntary Chapter 7 petition. Both Debtors claimed a $75,000 exemption in real property as homestead property under Wis. Stat. § 815.20. The Chapter 7 Trustee objected to Debtor Dorshak’s $75,000 exemption claim, but conceded to Debtor Roen’s homestead exemption. Prior to their marriage, Debtor Roen owned the homestead free and clear with no liens as of 2007. There was no mortgage on the homestead throughout the Debtors’ marriage. Debtor Dorshak claimed that his payment of real estate taxes, home insurance, and necessary maintenance repairs constituted a mixing of marital property with individual property converting the homestead into marital property. The Court found Dorshak’s payments did not constitute a mixing under Chapter 766 because such payments were not applied to the mortgage nor did the payments substantially increase the property’s value. The Court sustained the Trustee’s objection and denied the exemption.

Statute/Rule References:
Wis. Stat. § 766.01 -- Marital Property Definitions
Wis. Stat. § 766.63 -- Mixed Property
Wis. Stat. § 815.20 -- Homestead Exemption

Key Terms:
Exemptions
Homestead Exemptions
Marital Property
Mixed Property

Judge Robert D. Martin

In re Henning, Case No. 14-15312-7 (09/01/2016) -- Judge Robert D. Martin 09/01/2016

Case Summary:
The Trustee challenged the Debtor’s claim of exemptions. The Debtor claimed an exemption for an inherited IRA under Wis. Stat. § 815.18(3)(j). The Court noted that the statute provided an exemption for “retirement benefits” provided “by reason of age, illness, disability or length of service and payments made to the debtor therefrom.” The Court noted that an inherited IRA does not fit this requirement. Instead, the Debtor is entitled to benefits immediately, without regard to any of the factors listed above. The Court also noted that the Supreme Court had explicitly held that an inherited IRA was not a retirement benefit in Clark v. Rameker, 134 S. Ct. 2242 (2014).

In re Symdon, Case No. 13-14692-13 (08/30/2016) -- Judge Robert D. Martin 08/30/2016

Case Summary:
On remand from the District Court, the Court was instructed to determine whether the creditor even had standing to assert nondischargeability of the debt. Debtor’s wife was awarded contribution of $70,000 in attorneys’ fees in the divorce decree. The law firm which represented debtor’s wife in the divorce proceeding asserted priority under § 507(a)(1). The Court held that, absent an express provision in the divorce decree directing payment to the law firm, the payment of the attorneys’ fees was, by default, payable to the spouse. The Court noted that historically, in Wisconsin, attorneys’ fees could not be awarded in a law firm, but must be awarded to the spouse. In 1977, the Wisconsin legislature amended the statute, permitting attorneys’ fees to be awarded directly to the law firm. Nevertheless, the historical and ethical background suggested that, unless otherwise stated, attorneys’ fees were to be interpreted as awarded to the wife. The court also noted that the unique enforcement provisions for alimony precluded alimony from being enforced by an action at law. Allowing alimony to be indirectly enforced by an action at law, through a garnishment, would be an injustice.

Stewart Swenson v. Megan L. Swenson (In re Swenson), Adv. No. 16-0022, Case No. 16-10016-7 (08/23/2016) -- Judge Robert D. Martin 08/23/2016

Case Summary:
Debtor’s father filed an adversary proceeding to determine dischargeability of debt. Debtor’s father had taken out a loan, secured by his principal residence, and then loaned the funds to his daughter to refinance her student loans. The Court held that nondischargeability was not warranted under § 523(a)(8)(A)(ii) because loans are not included within the purview of the section. While some courts have allowed loans to be classified under § 523(a)(8)(A)(ii), the Court found that the section, which refers “to educational benefit, scholarship, or stipend” contemplated payments of a different nature than loans, and that the inclusion of loans within the section would render the remainder of § 523(a)(8) superfluous.

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

Key Terms:
Student Loan

In re CS Estate, Inc., Case No. 15-13766-11 (08/22/2016) -- Judge Robert D. Martin 08/22/2016

Case Summary:
The parties filed a stipulation requesting a ruling as a matter of law on three issues: (1) the choice of law to be applied in interpreting the contract; (2) whether the Consent Provision is a condition precedent to the formation and enforceability of the Contract, such that the stipulated failure to obtain the executed Consent rendered the contract null and void; (3) whether Houlihan could unilaterally waive the Consent Provision. The Court held that when the very formation of a contract is at issue, a choice-of-law provision included in the contract does not apply. The Court noted that the 7th Circuit has declined to determine whether bankruptcy courts apply federal or state choice-of-law rules; typically, the same result will be reached. The Court further held that when the entirety of the bargained for services under a contract is conditioned on an event, then the existence of the contract is conditioned on the occurrence of such event. Since one party’s duty to provide services, and the other party’s duty to pay for such services, are both suspended until the occurrence of the event, the party could not unilaterally waive the Consent Provision, since that would be the equivalent of providing an indefinite option contract. Since consideration is required to keep an option contract open, by definition this Consent Provision cannot have been for the sole benefit of Houlihan.

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