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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 Saxe, Case No. 12-13807-7 (03/22/2013) (491 B.R. 244) -- Judge Catherine J. Furay 03/22/2013

Case Summary:
Chapter 7 debtors sought to avoid a lien on various items of farm equipment. The creditor asserted that it had a purchase-money security interest in one item, a skidsteer. The Debtors disputed the existence of a PMSI, argued that there had been a novation, and that their payments on the debt should be applied first to the skidsteer (such that the PMSI was paid, and the remaining obligation was a general security interest). The Bankruptcy Court found that the security agreement created a PMSI. The subsequent renewal of the loan did not constitute a novation, as the differences between the two notes were minimal, no additional funds were borrowed, and there was no indication that the original obligation was extinguished. Finally, under Wisconsin law regarding the application of payments, payments are applied first to obligations secured by purchase-money security interests only if “more than one obligation is secured.” Here, there was only one obligation, and payments would be applied to the whole debt (and the PMSI would be removed only after the entire debt has been satisfied). The motion to avoid the lien was denied as to the skidsteer.

Statute/Rule References:
11 U.S.C. § 522(f) -- Lien Avoidance
Wis. Stat. § 409.103 -- Purchase - Money Security Interest

Key Terms:
Lien Avoidance
Purchase - Money Security Interest

In re Spencer, Case No. 10-15242-7 (02/12/2013) -- Judge Catherine J. Furay 02/12/2013

Case Summary:
After receiving a discharge, the Debtor sought to reopen her bankruptcy case in order to administer assets, amend her schedules, and have her case administered “on the basis of true facts.” She had been contesting the foreclosure of the mortgage on her home in Wood County Circuit Court for nearly four years, and had recently filed a Notice of Removal of that action to the United States District Court for the Western District of Wisconsin. The Debtor’s motion to reopen her bankruptcy case alleged that she expected a recovery against PNC Bank for fraud and violations of several state and federal laws related to the foreclosure proceeding. She believed that these assets should be made available to her creditors. Citing Redmond v. Fifth Third Bank, 624 F.3d 793 (7th Cir. 2010), the court held that the Debtor’s motion was untimely, that it appeared highly unlikely she was entitled to bankruptcy relief, and that either the state court or the district court were the appropriate fora for her action.

Statute/Rule References:
11 U.S.C. § 350(b) -- Reopening

Key Terms:
Reopening

Suzannah Meta Schmid v. Bank of America, N.A., and Associated Bank, N.A. (In re Schmid), Adv. No. 12-0160, Case No. 10-12142-13 (01/14/2013) – Judge Catherine J. Furay 01/14/2013

Case Summary:
Debtor sought an indefinite stay of her adversary proceeding. Debtor’s counsel argued that she had discovered new evidence of defects in the transfer of her client’s mortgage and note that amounted to fraud. She asserted that a stay was required to allow her to investigate the evidence, and to reconsider her posture in the adversary proceeding and the underlying bankruptcy case. After reviewing the lengthy procedural history, and evaluating counsel’s description of the evidence, the Court concluded that the motion to stay failed to show adequate cause under Fed. R. Bankr. P. 9006(b)(1) to grant a stay.

Statute/Rule References:
Fed. R. Bankr. P. 9006 -- Time

Key Terms:
Time

Michael Farms, Inc. v. Thomas J. Lundgren (In re Lundgren), Adv. No. 13-0138, Case No. 13-11962-13 (12/17/2013) (503 B.R. 717) -- Judge Catherine J. Furay 12/17/2012

Case Summary:
A creditor sought a determination that the Debtor, the sole officer and shareholder of a restaurant, was personally liable for unpaid produce bills pursuant to the Perishable Agricultural Commodities Act ("PACA"), and that the amounts owed were nondischargeable in the Debtor’s personal bankruptcy case under 11 U.S.C. § 523(a)(4). The Debtor filed a motion to dismiss, arguing that PACA did not impose fiduciary duties for purposes of nondischargeability proceedings. The Court disagreed, finding that PACA establishes a trust on perishable commodities and sales proceeds and imposes duties on the buyers of perishable goods, including fiduciary duties within the meaning of section 523(a)(4). Having also concluded that the Debtor failed to pay the creditor for deliveries of produce, the Court found that the creditor’s complaint stated a claim for relief and denied the Debtor’s motion to dismiss.

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

Key Terms:
Fiduciary Capacity

Judge Robert D. Martin

Patricia A. Johnson, et al. v. Andrew J. Weihert (In re Weihert), Adv. 12-0105, Case No. 12-10893-7 (02/06/2013) (489 B.R. 558) -- Judge Robert D. Martin 02/06/2013

Case Summary:
Teenage girl died in a rollover accident. The driver had been drinking, underage, at a party hosted by the debtor. Plaintiffs (the victim’s parents and her estate) brought claims of battery and sexual assault at the party, and wrongful death for the rollover accident. The Plaintiffs sought to have these debts determined non-dischargeable as “willful and malicious injury.” The Bankruptcy Court held that the Plaintiffs failed to prove that any battery and sexual assault occurred, given that the Plaintiffs’ main witness was not credible and remaining evidence was negligible. The Bankruptcy Court also held that any social host liability the Debtor may have had for the accident did not rise to the level of willful and malicious injury in this case. Under the standard of Jendusa-Nicolai v. Larsen, 677 F.3d 320, 322 (7th Cir. 2012), the Plaintiffs failed to prove that the Debtor desired to inflict the victim’s injuries or that he knew they were highly likely to result.

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

Key Terms:
Dischargeability - Willful and Malicious

Judge Thomas S. Utschig

Christopher Seelen, Trustee of the Douglas L. Couillard and Deborah M. Couillard Bankruptcy Estate v. Douglas L. Couillard, Deborah M. Couillard, and Bank of America, NA (In re Couillard), Adv. No. 12-0132, Case No. 12-11610-7 (12/06/2012) (486 B.R. 481) 12/06/2012

Case Summary:
The chapter 7 trustee sought to exercise his rights as a subsequent purchaser under state law and avoid a mortgage pursuant to 11 U.S.C. § 544(a)(3). The lender filed a motion for summary judgment, which the court denied. The trustee then moved for summary judgment and the bank sought reconsideration. The court found that the mortgage did not identify the property with a “definite reference” because the lender did not attach legal descriptions for two parcels. As such, the mortgage was not recorded “as provided by law” and was subject to the interests of a subsequent purchaser. Because the affidavit of correction filed by the lender was invalid under state law, it did not provide constructive notice of anything beyond the defective original mortgage. Consequently, the trustee was entitled to avoid the mortgage. The trustee’s motion for summary judgment was granted, and the bank’s request for reconsideration was denied.

Statute/Rule References:
11 U.S.C. § 544 -- Trustee as Lien Creditor
Wis. Stat. § 706.05 -- Formal Requisites for Record
Wis. Stat. § 706.085 -- Correction Instruments
Wis. Stat. § 706.09 -- Notice of Conveyance from the Record

Key Terms:
Lien Avoidance
“Strong Arm” Power 

John M. Cirilli, Trustee v. Leonard D. Bronk (In re Bronk), Adv. No. 10-0044, Case No. 09-15224-7 (11/29/2012) -- Judge Thomas S. Utschig 11/29/2012

Case Summary:
The bankruptcy court entered a judgment allowing the debtor an exemption in an annuity, disallowing an exemption in college savings plans, and granting the debtor’s discharge. On appeal, the district court vacated the judgment, affirmed as to the college savings plans and the discharge, and remanded for further factual findings regarding the annuity. After remand, the bankruptcy court conducted a hearing and reviewed the specific terms of the annuity contract. The court found that distributions under the annuity were conditioned upon the debtor’s age, disability, or death. Because the distributions were in fact based upon these conditions, the annuity fell within the statutory terms and was properly claimed as exempt. The trustee’s objection to the annuity was again overruled and judgment was entered in accordance with the court’s findings.

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

Key Terms:
Annuity
Exemptions (Annuity)

Christopher M. Seelen, Trustee of the Douglas L. Couillard and Deborah M. Couillard Bankruptcy Estate v. Douglas L. Couillard, Deborah M. Couillard, and Bank of America, N.A. (In re Couillard), Adv. No 12-0132, Case No 12-11610-7 (11/09/2012)(486 B.R 466) 11/19/2012

Case Summary:
Trustee sought to avoid a mortgage because it did not have legal descriptions of the property attached to it. The lender had filed an “affidavit of correction” in which it attempted to add two parcels to the mortgage. The trustee contended that the mortgage was void against a subsequent purchaser for value and that the affidavit of correction was likewise invalid because it was not executed by the owners of the property. The court found that the original mortgage was defective insofar as the failure to attach the legal descriptions meant that the mortgage did not appear in the relevant tract index. The affidavit of correction was invalid because it was not properly executed, and could not provide constructive notice of another defective instrument. The lender was also not entitled to an equitable lien or equitable subordination. The lender’s motion for summary judgment was denied.

Statute/Rule References:
11 U.S.C. § 544 -- Trustee as Lien Creditor
Wis. Stat. § 706.05 -- Formal Requisites for Record
Wis. Stat. § 706.085 -- Correction Instruments
Wis. Stat. § 706.09 -- Notice of Conveyance from the Record

Key Terms:
Lien Avoidance
“Strong Arm” Power

In re Haake, Case No. 12-11398-11 (09/18/2012) (483 B.R. 524) -- Judge Thomas S. Utschig 09/18/2012

Case Summary:
The debtor was a Minnesota resident who purchased her home through a contract for deed. The contract called for full payment of the balance due by a specific date. After she failed to pay, the vendor served the debtor with a notice of cancellation of the contract in accordance with Minnesota law. She filed bankruptcy in an effort to save her home. The vendor moved for relief from the stay and argued that her right to “cure” the contract had expired under § 108(b) and she had no further right to the property. The court ruled that under relevant Eighth Circuit precedent, a notice of cancellation of a contract for deed created a cure period under § 108(b) that was not stayed by § 362(a); as such, the debtor’s redemption rights had expired. Even if she still held an interest in the property, the debtor could not modify the contract for deed because of the anti-modification provisions of § 1123(b)(5). The motion for relief from stay was granted.

Statute/Rule References:
11 U.S.C. § 108(b)
11 U.S.C. § 1123(b) -- Contents of Plan

Key Terms:
Anti-Modification Provisions

Melvyn L. Hoffman, Trustee v. Denise Renee Hartley and Vincent Levi Hartley (In re Hartley), Adv. No. 12-0050, Case No. 11-13956-7 (09/11/2012) (483 B.R. 700) -- Judge Thomas S. Utschig 09/11/2012

Case Summary:
The debtors owned an 82-acre parcel of real estate, 40 acres of which the parties agreed constituted their homestead. The entire property was encumbered by a single mortgage. The chapter 7 trustee sought to apportion the mortgage balance between the homestead and non-homestead parcels in accordance with their relative values. The debtors objected, arguing that the trustee’s request constituted an impermissible infringement of their homestead rights. The bankruptcy court ruled that Wisconsin courts have held that under § 846.11, debtors have the right to “insist” that when a single mortgage covers both homestead and non-homestead property, the non-homestead property must be sold first. The homestead exemption is to be liberally construed and is favored above the rights of creditors. Under the circumstances, the debtors were entitled to allocate the mortgage in such a way as to maximize their homestead exemption. The complaint

Statute/Rule References:
Wis. Stat. § 846.11 -- Homestead, How Sold

Key Terms:
Exemptions (Homestead)

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