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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

Farmers Organic Foods International, LLC, and Unsecured Creditors' Committee v. Rancho Cold Storage, Inc. (In re Farmers Organic Foods International, LLC), Adv. No. 15-0132, Case No. 13-16128-11 (02/03/2016) -- Judge Catherine J. Furay 02/03/2016

Case Summary:
Creditor Rancho Cold Storage filed motions for summary judgment in both an adversary proceeding, asking for administrative claim status, and the main case, asking for their claim to be deemed secured. Rancho stored certain products for the Debtor and was owed for certain post-petition storage costs. Rancho eventually sold the product it was storing, but continued to charge Debtor for storage until the buyer took delivery. Debtor disputed both motions for summary judgment, arguing there was no collateral left to secure the claim and that not all of the storage charges fit the requirements of an administrative expense claim under 11 U.S.C. § 503(b)(1). The Court found that there were genuine issues of material fact regarding whether there was any collateral remaining to secure Rancho’s claim and which costs, if any, qualified for administrative expense status. The Court denied both motions for summary judgment.

Statute/Rule References:
11 U.S.C. § 503 -- Administrative Expenses

Key Terms:
Administrative Expenses

Randy Joseph Netzer v. Office of Lawyer Regulation (In re Netzer), Adv. No. 15-0130, Case No. 14-13531-7 (02/03/2016) (545 B.R. 254) -- Judge Catherine J. Furay 02/03/2016

Case Summary:
Debtor Randy Netzer reopened his bankruptcy case to bring this adversary seeking to have a debt declared dischargeable. Netzer, an attorney, was disciplined by the Wisconsin Supreme Court, who assessed costs of $9,222.21. Netzer argues the costs are dischargeable because they were not levied by a governmental unit and are not fines or penalties as required by 11 U.S.C. § 523(a)(7). The Office of Lawyer Regulation argues the costs do satisfy the requirements of section 523(a)(7). The Court finds that the Office of Lawyer Regulation is a governmental unit. The Court also finds that the costs were assessed as a fine or penalty, not merely as compensation for pecuniary loss. Therefore, the costs are declared nondischargeable under section 523(a)(7).

Statute/Rule References:
11 U.S.C. § 523(a)(7) -- Nondischargeability - Fines / Penalties / Forfeitures

Key Terms:
Fines - Penalties - Forfeiture
Nondischargeable Debt

Gina S. Larson and Jessie L. Larson v. Nationstar Mortgage LLC (In re Larson), Adv. No. 14-0075, Case No. 13-14443-13 (01/22/2016) (544 B.R. 883) -- Judge Catherine J. Furay 01/22/2016

Case Summary:
Plaintiffs Gina and Jessie Larson filed this action to avoid the second wholly unsecured mortgage lien held by Nationstar under 11 U.S.C. § 1322(b)(2). The Supreme Court previously held in Dewsnup v. Timm, 502 U.S. 410 (1992) that a lien could not be avoided in a Chapter 7 case under 11 U.S.C. § 506(d). The Supreme Court had also previously held in Nobelman v. American Sav. Bank, 508 U.S. 324 (1993), that a Chapter 13 debtor could not use 11 U.S.C. § 506(a) to divide a mortgage into secured and unsecured portions in order to strip off the unsecured portion. While Nobleman did not address a wholly unsecured second lien in a Chapter 13, all eight circuit courts that have addressed it have held that a wholly unsecured second lien may be avoided under 11 U.S.C. § 1322(b)(2). First the court must use 11 U.S.C. § 506(a) to determine the secured status of the lien. If there is no value to secure the lien, then § 1322(b)(2)’s anti-modification provision does not prevent the lien from being avoided. The recent Supreme Court decision in Bank of America v. Caulkett, 135 S. Ct. 1995 (2015), another Chapter 7 case, does not affect this analysis. Debtors may use 11 U.S.C. § 1322(b)(2) to modify a claim that has no secured component.

Statute/Rule References:
11 U.S.C. § 506(a) -- Determination of Secured Status
11 U.S.C. § 1322(b)(2) -- Modification of Rights of Secured Claimants

Key Terms:
Determination of Secured Status
Lien Avoidance

Ocean Innovations, Inc. and Jet Dock Systems, Inc. v. Roy E. Ahern (In re Ahern), Adv. No. 14-0135, Case No. 14-12717-7 (11/19/2015) (541 B.R. 438) -- Judge Catherine J. Furay 11/19/2015

Case Summary:
Plaintiffs Ocean Innovations, Inc., and Jet Dock Systems, Inc., brought this action to have their judgment for patent infringement declared nondischargeable under 11 U.S.C. § 523(a)(6). Plaintiffs argued that the prior district court judgment for willful and deliberate patent infringement satisfied the willful and malicious elements of § 523(a)(6). Defendant argued that the standards were different and the debt should be discharged. The Court found that the elements of the patent judgment fulfilled the requirements for 523(a)(6). Further, all of the elements of collateral estoppel were satisfied, precluding relitigation of the issues. The Court granted summary judgment to the Plaintiffs and declared the debt nondischargeable.

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

Key Terms:
Collateral Estoppel
Issue Preclusion
Willful and Malicious - Defined

Paula Laddusire v. Auto-Owners Insurance Company, et al. (In re Laddusire), Adv. No. 15-0145, Case No. 15-13316-13 (11/19/2015) (541.B.R. 697) -- Judge Catherine J. Furay 11/19/2015

Case Summary:
Debtor Paula Laddusire sought to remove a state court proceeding to the Bankruptcy Court. Defendant Northstar Cleaning & Restoration, Inc., filed a motion to remand. Debtor asserts that removing the case is necessary because it involves property of the bankruptcy estate. Defendants argued that the claim, a tort claim, is based on state law and should remain in state court. The Court found that abstention was proper under 28 U.S.C. § 1334. Further, the Court remanded the case pursuant to 28 U.S.C. § 1452(b). Based on considerations of judicial economy, comity, respect for the decision making ability of the state court, the predominance of state law issues, and the effect of remand on the administration of the bankruptcy case, the Court concluded that abstention is appropriate under 28 U.S.C. § 1334(c)(1) and remands the case to the state court under 28 U.S.C. § 1452(b).

Statute/Rule References:
28 U.S.C. § 1334 -- Abstention
28 U.S.C. § 1452 -- Removal

Key Terms:
Abstention
Remand
Removal

Thomas Kriescher, Vicky Kriescher, and Marjac, Inc. v Marjorie Ellen Gibson (In re Gibson), Adv. No. 14-0034, Case No. 13-15635-7 (11/03/2015) -- Judge Catherine J. Furay 11/03/2015

Case Summary:
Marjorie Gibson brought this matter before the Court to vacate a prior order granting partial summary judgment and to alter or amend the findings of fact and conclusions of law. Gibson claimed that there may have been additional evidence that could have been presented at trial. The Court first determined that the motion to vacate was timely filed. The time limit to file such a motion in Fed. R. Civ. P. 52(b) did not begin to run until judgment was entered on all claims, not when the partial summary judgment was entered. Next, the Court determined there was no reason to vacate the award of partial summary judgment or alter the findings. There was never any dispute about the facts. Gibson presented only hypotheticals without any real evidence that could have arisen at trial. If there were other facts or evidence supporting opposition to the award of partial summary judgment, they should have been presented at that time. No such facts or evidence were presented, and therefore the motion to vacate was denied.

Statute/Rule References:
Fed. R. Bankr. P. 7052(b) -- Amended or Additional Findings
Fed. R. Civ. P. 52(b) -- Amended or Additional Findings

In re Simpson, Case No. 14-13126-7 (09/23/2015) -- Judge Catherine J. Furay 09/23/2015

Case Summary:
The Court overruled the Trustee’s objection to the Debtor’s claim of exemptions. The Debtor claimed an exemption in a personal injury claim 10 months after filing the bankruptcy petition, even though the claim arose pre-petition and the Trustee gave the Debtor repeated reminders to claim the exemption on his schedules. The Trustee argued that the exemption was not timely filed under Wis. Stat. § 815.18(6)(a). Section 815.18(6)(a) states an exemption may be claimed within a reasonable time after seizure, but shall be claimed prior to disposition of the property. Harmonizing Wis. Stat. § 815.18(6)(a) with Rule 1009, the closure of the case is a reasonable time after seizure. Therefore, § 815.18(6)(a) is to be read broadly, in conjunction with Rule 1009, to allow a debtor to amend his exemptions to add additional claims up until the time the case is closed.

Statute/Rule References:
Wis. Stat. § 815.18 -- Exemptions

Key Terms:
Exemptions

In re Achtor, Case No. 14-13286-13 (08/03/2015) -- Judge Catherine J. Furay 08/03/2015

Case Summary:
The Debtors objected to two proofs of claim filed by a credit card company. They asserted their corporation incurred the debt, they were guarantors, and the claims should be disallowed because they were “not non-contingent AND liquidated.” The Court found that under the terms of the credit card agreements, the Debtors were personally jointly and severally liable for the credit card debt. There was no evidence to the contrary. The agreement was enforceable, so the objection was overruled and the claims were allowed.

Statute/Rule References:
11 U.S.C. § 502 -- Allowance of Claims or Interests
Fed. R. Bankr. P. 3001(f)

Key Terms:
Claims - Allowances

Judge Robert D. Martin

Robert T. Kasdorf, Trustee v. Home Casual Enterprise, Ltd., et al. (In re Home Casual LLC), Adv. No. 15-0043, Case No. 13-11475-7 (11/30/2015) -- Judge Robert D. Martin 11/30/2015

Case Summary:
Creditors (Defendants in the current action) secured a judgment against Debtor in Federal District Court, and, in an effort to collect, filed a non-earnings garnishment action against Brian Sanderson, one of debtor’s debtors, in state court. Although Sanderson was served with the garnishment summons on December 28, 2012, 91 days before Debtor filed its Chapter 11 petition, summary judgment on the garnishment complaint was not entered until March 19, 2013. On March 29, 2013, Debtor filed its Chapter 11 petition (the case was converted to a Chapter 7 shortly thereafter). On March 26, 2015, the Chapter 7 Trustee commenced an adversary proceeding against creditors primarily for the purpose of avoiding the Sanderson transfer under 11 U.S.C. § 547. In support of this preferential transfer action, the Trustee argued that the date of transfer was the date that summary judgment on the garnishment was entered and not the date on which the summons and complaint were served. The Court agreed, holding that under the Supreme Court of Wisconsin’s Commerce v. Elliot, 85 N.W. 417 (Wis. 1901), decision, creditors possessed only an equitable lien until summary judgment was entered, at which point the equitable lien became actual. Further, the Court found that while the latter qualifies as a lien under 11 U.S.C. § 101(37), and thus a transfer under 11 U.S.C. § 101(54)(A), the former does not. Accordingly, the Court held that the date of transfer was March 19, 2013, not December 28, 2012, and therefore that the transfer represented a preference, voidable by the Trustee.

In re Community Health Systems, Inc., Case No. 14-11319-11 (08/25/2015) -- Judge Robert D. Martin 08/25/2015

Case Summary:
Creditor, Dr. Phuoc Vuong, one of the Debtor’s former employees, filed a claim in the amount of $7,624.00 for reimbursement for vacation time and continuing education expenses. Dr. Vuong was terminated for cause on April 15, 2014. However, he argued that he was entitled to reimbursement for continuing education expenses relating to classes which he was scheduled to attend from April 21st through 25th in 2014. The Debtor objected to Dr. Vuong’s claim, arguing that, although Dr. Vuong was owed the regular vacation time, he was not owed reimbursement for the continuing education expenses because he had neither obtained approval to attend nor actually attended any classes. The Court found in favor of the Debtor as to the continuing education expenses, holding that that the Debtor had carried its burden in defeating the presumption in favor of the validity of Dr. Vuong’s claim. Specifically, the Court held that the employment contract introduced into evidence by the Debtor provided that an employee would only be reimbursed for continuing education expenses where the employee had both received approval from a supervisor to attend continuing education classes and successfully completed the classes with proof of credit earned. In this case the court found that Dr. Vuong had done neither of these things, and, thus, his claim was limited to reimbursement for vacation time.

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