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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.

Judge Robert D. Martin

In re Thompson, Case No. 13-11527-13 (12/19/2013) -- Judge Robert D. Martin 12/19/2013
Case Summary:
After confirmation of her Chapter 13 plan, the Debtor objected to the claim of the Wisconsin Department of Revenue, arguing that the claim was not entitled to priority status because her tax obligations for 2007, 2008, and 2009 came due more than three years prior to the filing of the petition. The Department of Revenue contended that the “lookback” period was tolled during the Debtor’s first Chapter 13 case (filed in 2010). Under 11 U.S.C. § 507(a)(8)(A)(i), the lookback period is tolled for any period in which the stay of proceedings was in effect in a prior case. Because the Debtor’s prior case was pending until its dismissal in February of 2013, the lookback period was tolled and Department had a valid priority claim.

Statute/Rule References:
11 U.S.C. § 507(a)(8)
11 U.S.C. § 523(a) -- Nondischargeability - Divorce Decrees

Key Terms:
Divorce Decrees - Maintenance or Property Division
Taxes - Tolling

In re Martin, Case No. 13-10756-7 (10/29/2013) (503 B.R. 172) -- Judge Robert D. Martin 10/29/2013

Case Summary:
The U.S. Department of Agriculture sought stay relief to set off a debt the IRS owed to the Chapter 7 debtor for a tax refund against a debt the Debtor owed it on a home loan guaranty. Debtor argued that setoff should not be allowed because the USDA did not hold an enforceable claim against her. Debtor claimed that Chase Home Finance LLC waived any deficiency on the mortgage in a foreclosure proceeding in state court. Debtor also argued that because she was misled by the waiver of deficiency, she did not contest the entry of judgment, the sale process, the price obtained at the sale, or the costs assessed. The Court held that the claim was enforceable because it was based on an indemnity contract signed by the Debtor, and not on subrogation. The Court also found that the language in the complaint was not misleading on its face, and Debtor failed to demonstrate that unsophisticated consumers found the challenged statements to be misleading or deceptive.

Statute/Rule References:
11 U.S.C. § 553 -- Setoff
15 U.S.C. § 1692(e)

Key Terms:
Home Loan Guaranty
Setoff

In re Reed, Case No. 11-17027-13 (10/29/2013) (500 B.R. 564) -- Judge Robert D. Martin 10/29/2013

Case Summary:
Debtors filed a Chapter 13 petition in November 2011. The IRS sought to offset the Debtors' 2012 income tax refund against the Debtors’ 2011 tax liability. Debtors argued that the 2011 tax liability was attributable to a 401(k) distribution that was received during the tax year and could not be offset by their post-petition tax refund for a later year. The Court allowed the setoff and held that the 2011 tax liability arose postpetition because “all events” necessary for that liability to accrue took place on the last day of the tax period, after the Debtors had filed their Chapter 13 petition.

Statute/Rule References:
11 U.S.C. § 553 -- Setoff

Key Terms:
Setoff
Taxes - Refund

In re Wirth, Case No. 11-17555-13 (10/29/2013) (503 B.R. 800) -- Judge Robert D. Martin 10/29/2013

Case Summary:
In a prior ruling the bankruptcy court disallowed 50 percent of BMO's fees for lack of specificity. Subsequently, BMO filed a supplemental claim asserting a claim for attorney's fees incurred post-confirmation for work done in connection with the debtor's objection to its first supplemental claim. Debtor objected that the claim was not specific, violated the creditor's obligation of good faith and fair dealing, and was not caused by debtor's default. The Court sustained Debtor’s objection and held that the fees were not reasonable because they resulted from creditor's prior insufficient itemization of attorney's fees. “The Debtor should not be penalized for BMO's failure to prepare its fee notice in compliance to these standards.”

Statute/Rule References:
11 U.S.C. § 506(b)
11 U.S.C. § 1322(e)

Key Terms:
Attorney Fees

Chief Judge Catherine J. Furay

H. Brooks and Company, LLC v. Stanley G. Yerges (In re Yerges), Adv. No. 13-0105, Case No. 13-10813-7 (12/17/2013) -- Judge Catherine J. Furay 12/17/2013

Case Summary:
In prior proceedings, the district court determined the defendant’s produce LLC had violated its Perishable Agricultural Commodities Act (“PACA”) trust obligations to the plaintiff. It made no findings about whether the defendant was individually liable. The defendant then filed an individual chapter 7 petition, and the plaintiff sought to except the PACA debt from discharge under section 523(a)(4). In denying a motion to dismiss the adversary complaint, the court determined the defendant-owner was personally liable for the dissipation of the PACA trust assets. The court also ruled that a PACA trust imposed fiduciary duties within the meaning of section 523(a)(4). The plaintiff then filed a motion for summary judgment, and the only question remaining was whether the debtor’s conduct constituted fraud or defalcation within the meaning of section 523(a)(4). The court rejected the plaintiff’s arguments that the Supreme Court’s interpretation of “defalcation” in Bullock v. BankChampaign, N.A., 133 S. Ct. 1754 (2013), did not apply to statutory breaches of fiduciary duty and that a breach of fiduciary duty imposed by PACA constituted per se defalcation within the meaning of section 523(a)(4). Instead, applying Bullock, the court looked to the facts available and could not conclude whether or not the debtor had knowledge of, or acted with gross recklessness in respect to, the improper nature of the behavior that resulted in a breach of his fiduciary duties. Accordingly, the court denied summary judgment.

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

Key Terms:
Fiduciary Capacity

Patricia Mroczenski v. Larry Dennis Mroczenski and Tami Jo Mroczenski (In re Mroczenski), Adv. No. 13-0058, Case No. 12-16800-7 (12/16/2013) -- Judge Catherine J. Furay 12/16/2013

Case Summary:
The plaintiff in this adversary proceeding—the incapacitated mother of one of the Defendants/Co-Debtors—secured a $60,000 state court judgment against her son and his wife for breach of fiduciary duties, conversion, and defalcation and sought a determination that the amounts owed were nondischargeable under 11 U.S.C. § 523(a)(4). The Court found that the language of the state court judgment conclusively established that the Plaintiff’s son had engaged in “fraud or defalcation while acting in a fiduciary capacity” and that his debt should be nondischargeable; however, the judgment was not clear regarding his wife’s culpability. Accordingly, summary judgment was granted as to the son but denied as to his wife.

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

Key Terms:
Claim Preclusion
Fiduciary Capacity

Erie Insurance Company and Anthony Stafford v. Kevin John Zaja (In re Zaja), Adv. No. 13-0060, Case No. 13-10684-7 (12/12/2013) -- Judge Catherine J. Furay 12/12/2013

Case Summary:
The Plaintiffs obtained a state court judgment against the Debtor for stealing a trailer and two automotive hoists and sought a finding that the consequent debt was nondischargeable as larceny under 11 U.S.C. § 532(a)(4). On summary judgment, the Court found that the terms of the state court judgment conclusively established that the Debtor committed larceny for purposes of section 523(a)(4). Accordingly, summary judgment was granted in favor of the Plaintiffs and the debt was rendered nondischargeable.

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

Key Terms:
Collateral Estoppel
Larceny

Steven John Wlodyga and Linda Wlodyga v. Chase Bank USA, N.A., and Chase Home Finance, LLC (In re Wlodyga), Adv. No. 13-0001, Case No. 12-15455-7 (11/25/2013) -- Judge Catherine J. Furay 11/25/2013

Case Summary:
Chapter 7 debtors brought an adversary proceeding seeking a determination that the junior mortgage on their home was invalid. The Debtors argued that although they both signed the promissory note—and although they acknowledge they received and spent the loan proceeds—one of the debtors did not remember signing the mortgage and, as a result, either the signature that appeared on the mortgage was a forgery or the result of misrepresentation and fraud. Despite its skepticism of the Debtors’ “obviously self-serving” representations, the Court concluded that the ultimate factual question turned on a credibility assessment that could only be made in person. Accordingly, it denied summary judgment and set the matter for trial.

Statute/Rule References:
Fed. R. Bankr. P. 7056 -- Summary Judgment
Fed. R. Civ. P. 56(c) -- Summary Judgment

Key Terms:
Summary Judgment

James Richard Thoen v. Kathleen E. Kevan (In re Kevan), Adv. No. 12-0220, Case No. 12-14575-7 (09/23/2013) -- Judge Catherine J. Furay 09/23/2013

Case Summary:
The Plaintiff filed an adversary complaint seeking a determination that a Minnesota state court punitive damages award was nondischargeable under section 523(a)(6) of the Bankruptcy Code. The parties filed cross motions for summary judgment. Under Minnesota law, punitive damages are available if a plaintiff shows a defendant acted with a deliberate disregard for the rights or safety of others, acting with intent or indifference. By contrast, section 523(a)(6) requires a creditor to prove the debtor acted in conscious disregard of her duties and intended to injure the creditor or was substantially certain injury would occur. Looking at a special verdict without the jury instructions and the state court record, the court had no basis to determine whether the jury concluded the defendant acted willfully and maliciously. The jury answered "yes" to the question of whether the defendant acted "with deliberate disregard for the rights or safety of others." It could have found that the defendant acted with reckless disregard, which is insufficient to demonstrate willfulness and maliciousness under section 523(a)(6). Therefore, the court denied both motions for summary judgment.

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

Key Terms:
Collateral Estoppel
Willful and Malicious - Defined

In re Schmid, Case No. 10-12142-13 (09/05/2013) -- Judge Catherine J. Furay 09/05/2013

Case Summary:
The Debtor persistently sought, from a variety of procedural angles in state and federal court, a finding that the mortgage on her home was invalid. After the Court entered an order dismissing her adversary proceeding and denying her claim objection concerning her mortgage, the Debtor sought Rule 60 relief from the Court’s judgment. The Court found that the Debtor had failed to show the relevance of allegedly “newly discovered evidence,” the existence of any evidence of “fraud, misrepresentation, or misconduct,” or the merit of her position that the court’s judgment was void. In light of these findings, and after concluding that the Debtor appeared to be using her motion for relief as a substitute for an appeal, the Court denied the motion. Affirmed by the District Court.

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

Key Terms:
Relief from Judgment or Order

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