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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 Rapraeger, Case No. 13-10869-7 (07/16/2015) (534 B.R. 778) -- Judge Catherine J. Furay 07/16/2015

Case Summary:
The holder of a fourth-priority mortgage on property filed a motion to vacate an order approving sale of the property after it did not get paid in full from the proceeds. The Court had granted a motion to shorten time for notice and a motion to sell in turn after no objection was filed to either. The fourth-priority mortgagee asserted it had relied on a statement in an affidavit from the Debtors’ counsel in support of the motion to shorten time indicating the sale would pay secured creditors in full. The Court denied the motion to vacate, finding that it was not made within a reasonable time under Rule 60(c) and further finding that even if it had been, the creditor had not stated grounds justifying relief under Rule 60(b)(1), (3), or (4)-(6).

Statute/Rule References:
Fed. R. Bankr. P. 9024 -- Relief from Judgment or Order
Fed. R. Civ. P. 60(b) -- Relief from a Judgment or Order

Key Terms:
Relief from Judgment or Order

In re Spencer, Case No. 15-11204-13 (05/15/2015) (531 B.R. 208) -- Judge Catherine J. Furay 05/15/2015

Case Summary:
The Court found a bank demonstrated it had standing to seek relief from stay. Its foreclosure judgment demonstrated it had a “colorable claim” to property. The Debtor did not meet her burden of showing making a payment in the amount of the regular monthly mortgage payment to the Debtor’s attorney’s trust fund adequately protected the bank’s interest. Thus, the bank was entitled to relief from stay for cause under section 362(d)(1). It was also entitled to relief under section 362(d)(2). The Debtor stipulated she had no equity in the property, and she failed to meet her burden of proving it was necessary for an effective reorganization. Her proposed sale of the property would not result in proceeds available for any other creditor, nor would it generate exempt proceeds for purchase of a new home. Her personal liability for the debt had previously been discharged.

The Court also granted in rem relief from stay as to the property, finding the filing of the petition was part of a scheme to hinder, delay, or defraud creditors involving multiple bankruptcy filings affecting the property.

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

Key Terms:
Automatic Stay
In Rem Relief
Rooker-Feldman

Sheila Marie Spencer v. Federal Home Loan Mortgage Corporation, a/k/a Freddie Mac, et al. (In re Spencer), Adv. No. 15-0060, Case No. 15-11204-13 (05/15/2015) (532 B.R. 303) -- Judge Catherine J. Furay 05/15/2015

Case Summary:
At the time this adversary proceeding was filed, a motion for relief from stay was pending in the main case. The Debtor’s arguments in opposition appeared to require the conclusion that until a determination was reached in the adversary proceeding, it was impossible to determine whether the movant had standing to seek relief from stay. Thus, the Court reviewed the adversary complaint. Because the review suggested the Debtor was challenging the validity of a foreclosure judgment, the Court ordered the Debtor to explain why the Rooker-Feldman doctrine would not bar the claims. After considering her response and other submissions, the Court determined it lacked subject-matter jurisdiction and dismissed the complaint.

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

Key Terms:
Automatic Stay
In Rem Relief
Rooker-Feldman

In re Adolphson, Case No. 14-11773-7 (02/27/2015) -- Judge Catherine J. Furay 02/27/2015

Case Summary:
The Court sustained the Chapter 7 trustee’s objection to Debtors’ claim of exemptions. The Debtors claimed an exemption in a dairy cooperative equity revolvement account under 11 U.S.C. § 522(d)(10)(E). The cooperative bylaws were clear that redemption of the Debtors’ equity was entirely within the discretion of the board of directors. Neither illness, disability, death, nor age would trigger redemption of the Debtors’ equity. Although the Debtors may have accumulated their patronage equity over time, the Court also determined they did not have a right to receive payment because of their length of service. This term connotes tenure, in the sense of plans conferring benefits based on the number of years of employment.

Statute/Rule References:
11 U.S.C. § 522(d)(10)(E) -- Federal Exemptions - Stock Bonus, Pension, Profitsharing, Annuity

Key Terms:
Exemptions

Judge Robert D. Martin

In re Koenig, Case No. 14-14446-7 (07/13/2015) -- Judge Robert D. Martin 07/13/2015

Case Summary:
Debtors claimed exemptions in three annuity accounts pursuant to Wis. Stat. § 815.18(3)(j). The Trustee objected, relying on Wis. Stat. § 815.18(3)(f). The only issue before the Court was the interpretation of § 815.18(3)(j), in particular the phrase “the plan or contract complies with the provisions of the internal revenue code.” The prevailing view is that compliance with the IRC is accomplished by meeting the tax-deferral provision of IRC § 72. However, the Trustee argued that compliance with the IRC is accomplished by meeting the retirement plan provisions of IRC §§ 401-409 because a broader interpretation makes the amendment to Wis. Stat. § 815.18(3)(f) redundant. The Court found that the amendment of § 815.18(3)(f) did not change the prevailing statutory interpretation of § 815.18(3)(j). Thus, debtors only need to comply with IRC § 72 to exempt a retirement annuity under Wis. Stat. § 815.18(3)(j).

In re Home Casual LLC, Case No.13-11475-7 (05/19/2015) (534 B.R. 350) -- Judge Robert D. Martin 05/19/2015

Case Summary:

Creditors filed a motion to grant standing to pursue, on behalf of the bankruptcy estate, preference and fraudulent transfer claims against debtor’s insiders. Although the Creditor had ongoing discussions with the Trustee about various causes of action, the Trustee declined to pursue the actions at issue. Generally, a creditor may bring an avoidance action under the theory of derivative standing. The Court found that while the Trustee’s decision not to pursue the actions was well thought out and reflected no improper motives, it was not technically justified in the manner which would preclude granting derivative standing to the Creditor. Furthermore, the Creditor volunteered to absorb the costs in the event the actions were unsuccessful. Thus, derivative standing was appropriate in this case because of the low cost and risk placed on the estate.
In re Heffron-Clark, Case No. 10-18035-7 (04/23/2015) (530 B.R. 439) -- Judge Robert D. Martin 04/23/2015

Case Summary:
The Chapter 7 Trustee objected to an executing judgment creditor’s state-created lien. Previously, the Trustee had initiated an adversary proceeding to avoid the lien but dismissed it on stipulation. While the case was on appeal to the Supreme Court concerning an exemption issue, the Wisconsin Supreme Court issued a ruling overturning the law which validated the executing judgment creditor’s lien. As a result, the Trustee filed an objection to the Creditor’s claim. The Creditor argued dismissal of the avoidance action precluded the Trustee from objecting to the claim and that the Wisconsin Supreme Court’s ruling in Associated Bank v. Collier, 355 Wis. 2d 343 (2014), should not apply retroactively. The Court found that the theories of res judicata, law of the case, estoppel by record, and laches did not preclude the Trustee from objecting to the claim. Furthermore, the Court found that the only way to practically interpret Collier was to use retroactive application. Therefore, the Court sustained the Trustee’s objection. 

Kendall Swenby and the Estate of Opal Meicher v. Kevin Swenby (In re Swenby), Adv. No. 14-0048, Case No. 13-15958-7 (04/23/2015) (529 B.R. 705) -- Judge Robert D. Martin 04/23/2015

Case Summary:
Creditor filed an adversary proceeding seeking to determine the dischargeability of his debt. After a trial on the merits, the Court dismissed the case. Debtor’s counsel filed a motion for attorney fees pursuant to 11 U.S.C. § 523(d). While the legal and factual positions taken by the Creditor to litigate the dischargeability (of what the Court determined to be a consumer debt) were not substantially justified, special circumstances existed to deny the motion. Attorney fees under § 523(d) are only allowed for defending § 523(a)(2) claims. In this case, the amount of resources devoted to defending the § 523(a)(2) action was likely small and the related fees de minimis and hard to determine. Accordingly, the Court found awarding the entire amount requested would be unjust.

In re Bogan, Case No. 12-16624-7 (04/07/2015) (534 B.R. 346) -- Judge Robert D. Martin 04/07/2015

Case Summary:
The Chapter 7 Trustee objected to the Debtor’s amended claim of exemptions shortly after the reopening of the case. The Trustee asserted that the exemption claim was filed in bad faith. At issue was the Bankruptcy Courts’ authority to deny bad faith exemptions. The Court found that the Supreme Court clearly opined in Law v. Siegel, 134 S.Ct. 1188 (2014), that bankruptcy courts do not have authority to deny a federal exemption on a ground not specified in the code. Thus, the Court could not reach the merits of the trustee’s objection because there is no codified bad faith prohibition on exemption amendments.

Statute/Rule References:
11 U.S.C. § 502(a)

Key Terms:
Bad Faith

In re Krueger, Case No. 14-14757-13 (04/07/2015) (534 B.R. 163) -- Judge Robert D. Martin 04/07/2015

Case Summary:
At issue in this case was the Debtors’ eligibility for Chapter 13. Pursuant to 11 U.S.C. § 109(e), only an individual with unsecured debts of less than $383,175 may be a debtor under Chapter 13. The Debtors scheduled over $800,000 in unsecured debt due to a deeply underwater mortgage. This unsecured debt also included a judgment lien which was found to be non-dischargeable in a previous bankruptcy. Debtors wanted the Court to define secured debt using the Dewsnup v. Timm, 502 U.S. 410 (1992), rationale resulting in the judgment lien as a secured debt and debtors falling below the unsecured debt ceiling in § 109(e). The Court declined to extend Dewsnup to Chapter 13 eligibility determinations. Furthermore, controlling 7th circuit precedent applied the § 506(a) test. Consequently, a debt is only secured for the purposes of Chapter 13 eligibility to the extent of the value of the collateral.

Statute/Rule References:
11 U.S.C. § 109(e)

Key Terms:
Eligibility for Chapter 13
Unsecured Debt Limit

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