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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 Coenen, Case No. 12-12141-7 (09/10/2012) (487 B.R. 539) -- Judge Robert D. Martin 09/10/2012

Case Summary:
The Debtor was 100% owner of a limited liability company (LLC), which in turn held legal title to the property on which the Debtor resided. The Debtor attempted to take a Wisconsin homestead exemption in the property, but the Court determined that the Debtor did not have a property interest which could be exempted. The Court held that the Debtor and his LLC were separate legal entities, so the Debtor did not have legal title to the property, and his equitable interest in the property had passed to the Trustee along with his ownership interest in the LLC.

Statute/Rule References:
11 U.S.C. § 522(b)(1)(3)

Key Terms:
Exemptions – Homestead
Homestead Exemption
Property of the Estate

In re Landsinger, Case No. 11-13802-7 (07/23/2012) (490 B.R. 827) -- Judge Robert D. Martin 07/23/2012

Case Summary:
During the Debtors’ marriage, the Debtor-wife received an interest in real property from her father. The Debtors later executed a mortgage note with a bank and pledged the real property as collateral. The Debtors made payments on the mortgage note with marital property funds. The Debtors filed for bankruptcy under Chapter 7, and each claimed an exemption in the real property under 11 U.S.C. § 522(d)(5). The Chapter 7 Trustee objected, claiming that the wife’s interest in the real property was individual property under Wisconsin law, and therefore, the husband could not claim any exemption in it. The Bankruptcy Court found that marital property was “mixed” with the wife’s individual property under Wis. Stat. § 766.63(1) because the principal payments the Debtors made on the mortgage note constituted marital property. However, because the marital property component could be traced, the real property was not reclassified to marital property. The Debtor-husband was entitled to claim an exemption in his undivided one-half interest in the amount of principal payments made on the mortgage note.

Statute/Rule References:
11 U.S.C. § 522(d) -- Exemptions - Federal
Wis. Stat. § 766.63(1)

Key Terms:
Marital Property
Mixed Property
Mortgage Payments
Wild Card Exemption

In re Butler, Case No. 11-15497-7 (05/29/2012) (472 B.R. 786) -- Judge Robert D. 05/29/2012

Case Summary:
The Trustee objected to the Debtor’s claimed exemption in a “CSI Retirement Savings Plan” under 11 U.S.C. § 522(d)(10)(E). The Trustee argued that the Plan was actually a limited partnership interest, and therefore, it did not meet the standard under 11 U.S.C. § 522(d)(10)(E). Examining the three elements of the statute, the Bankruptcy Court overruled the Trustee’s objection. The Court found the Plan to be a “similar plan or contract” because it provided income that substituted for wages. The Plan payments met the second element of the statute, as redemption of units could occur “on account of” disability, death, or illness. Finally, the Court found the Plan to be reasonably necessary for the support of the Debtor. The Debtor was entitled to claim an exemption in the Plan under the statute.

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

Key Terms:
Exemptions
Limited Partnership
Similar Plan

Troy Morrison and Christa Morrison v. Shelley Mergen (In re Mergen), Adv. No. 12-0016, Case No. 11-16545-7 (05/01/2012) (473 B.R. 743) -- Judge Robert D. Martin 05/01/2012

Case Summary:
Plaintiffs Troy and Christa Morrison sought to except the debt owed them from discharge under 11 U.S.C. § 523(a)(2)(A). The Plaintiffs relied on a state court jury verdict and judgment entered against the Debtor. The Debtor failed to answer timely, and the Plaintiffs moved for default judgment. The Debtor argued that the state court findings failed to establish the elements of 11 U.S.C. § 523(a)(2)(A), and was therefore not entitled to preclusive effect. Treating the matter as cross motions for summary judgment, the Bankruptcy Court found that the standards for collateral estoppel and issue preclusion were satisfied because the state court verdict contained findings that tracked the elements of 11 U.S.C. § 523(a)(2)(A), and the state court judgment was a final judgment on the merits of the case. The Bankruptcy Court concluded that the Plaintiffs could not prevail under 11 U.S.C. § 523(a)(2)(A) because identical issues were litigated in state court and the jury found that the Debtor lacked the requisite intent to deceive. The Court granted summary judgment in favor of the Debtor.

Statute/Rule References:
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - Fraud

Key Terms:
Collateral Estoppel
Issue Preclusion
Default Judgment

Judge Thomas S. Utschig

Howard D. White, as Trustee of the Chad L. Pawlak and Jo Ann Pawlak Bankruptcy Estate v. Coyne, Schultz, Becker & Bauer, S.C. (In re Pawlak), Adv. No. 12-0036, Case No. 10-11787-7 (08/29/2012) (483 B.R. 169) -- Judge Thomas S. Utschig 08/29/2012

Case Summary:
Chapter 7 trustee sought to recover $50,000 “flat fee” paid to law firm to represent debtors in potential bankruptcy adversary proceeding. The Trustee alleged that payment of the fee constituted a fraudulent transfer as the Debtors did not receive “reasonably equivalent value” at the time the transfer was made (i.e., prior to the bankruptcy filing). The Bankruptcy Court ruled that the flat fee was not property of the estate at the time of filing. However, all fees paid to attorneys in connection with a bankruptcy case (or a related adversary case) remain subject to review by the Bankruptcy Court. Payment of the fee constituted a pre-petition transfer of the Debtors’ property, even though the funds were paid directly to the law firm as part of a settlement with a third-party insurance company. The promise of future representation constituted a legally binding obligation which had value, even though there was no certainty that an adversary proceeding would be filed. Under the facts of the case, at the time of the transfer the Debtor obtained rights to representation which were roughly worth about the amount they paid. The transfer could not be avoided, and judgment was entered for the Defendant.

Statute/Rule References:
11 U.S.C. § 548 -- Fraudulent Conveyance

Key Terms:
Fraudulent Conveyance

In re Woller, Case No. 11-14298-7 (08/16/2012) (483 B.R. 886) -- Judge Thomas S. Utschig 08/16/2012

Case Summary:
The Chapter 7 trustee objected to various exemptions, including a semi-tractor which the debtors claimed as “business property,” a bank account, revenues from the husband’s trucking business which had been claimed under an exemption for 75% of a debtor’s weekly “net income,” and an annuity purchased on the eve of bankruptcy with funds from the sale of real estate inherited from the wife’s father. The Court found that while the semi-tractor was a “motor vehicle,” the Debtors were still entitled to claim it as “business property” as it qualified as equipment within the meaning of that exemption. The trucking revenue also qualified as “net income” and the debtors’ exemption planning as to the purchase of the annuity did not rise to the level of “extrinsic” conduct which would justify the denial of the exemption. However, the debtors were not entitled to exempt a bank account used solely for the purpose of depositing the husband’s trucking receipts, as it was not used for the debtor’s “personal” use. The objection was granted in part and denied in part.

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

Key Terms:
Exemptions

James Paul Pulaski and Judith Pearl Pulaski v. Dakota Financial, LLC (In re Pulaski), Adv. No. 11-0282, Case No. 11-14135-13 (07/13/2012) (475 B.R. 681) -- Judge Thomas S. Utschig 07/13/2012

Case Summary:
The Debtors filed an adversary proceeding to avoid the defendant’s mortgage. They alleged that the mortgage was invalid due to unconscionability, lack of consideration, mistake, misrepresentation, unjust enrichment, breach of contract, and breach of the duty of good faith and fair dealing. The defendant argued that the court lacked the constitutional authority to rule on these claims under Stern v. Marshall, __ U.S. __, 131 S. Ct. 2594 (2011). The court found that the debtors’ claims all related to issues which would be resolved in the process of adjudicating the defendant’s claim, which would not be an allowed secured claim until the debtors’ claim objection (and their adversary proceeding, which was the vehicle for resolving the objection) was resolved. The request to dismiss the adversary proceeding was denied.

Statute/Rule References:
28 U.S.C. § 157(b)(2) -- Core Proceeding

Key Terms:
Constitutional Authority of Article I Court
Core Proceedings

In re Mississippi Sports and Recreation, Inc., Case No. 10-17601-11 (06/08/2012) (483 B.R. 164) -- Judge Thomas S. Utschig 06/08/2012

Case Summary:
The Wisconsin Department of Natural Resources moved to dismiss the case and alleged that the debtor had not obtained confirmation of a plan within the time periods required in a small business case. The plan was filed in a timely fashion and the first hearing on confirmation occurred within 45 days of the filing of the plan. The confirmation hearing was adjourned several times, although the debtor did not file a formal motion to extend the time for confirmation. The court found that the adjournments occurred prior to the expiration of the existing deadline, parties in interest had sufficient opportunity to object to any extension, and all parties acquiesced to the adjournments. The code does not require a formal motion but simply a “demonstration” that a plan is likely to be confirmed within a reasonable time. The motion to dismiss was denied. Reversed and remanded on appeal.

Statute/Rule References:
11 U.S.C. § 1121(e)(3)(A)
11 U.S.C. § 1129(e) -- Confirmation of Small Business Case

Key Terms:
Confirmation of Plan (Small Business Chapter 11)

In re Thulis, Case No. 10-16841-7 (06/04/2012) (474 B.R. 668) -- Judge Thomas S. Utschig 06/04/2012

Case Summary:
Chapter 7 Trustee objected to bank’s secured claim on the grounds that its mortgage did not cover the specific parcel previously sold by the Trustee. The bank contended that as a hypothetical subsequent purchaser under § 544(a)(3), the Trustee would have had constructive notice of its claim. The Bankruptcy Court found that although Wisconsin law charges prospective purchasers with constructive notice of certain things that might be ascertained by a review of the land or an inquiry of those in possession, nothing about the parcel in question would provide notice of the bank’s mortgage. The mortgage was not in the property’s chain of title and Wisconsin’s doctrine of constructive notice would not require a prospective purchaser to make inquiries about an owner’s financing arrangements. The trustee’s objection was sustained, and the bank’s claim was allowed as unsecured.

Statute/Rule References:
11 U.S.C. § 544 -- Trustee as Lien Creditor

Key Terms:
Lien Avoidance
“Strong Arm” Power

In re Palmer Lake Plaza, LLC, Case No. 12-11183-11 (04/16/2012) (470 B.R. 511) -- Judge Thomas S. Utschig 04/16/2012

Case Summary:
A creditor moved to transfer venue. The debtor’s primary asset was an office building located in Minnesota. The debtor was organized under Minnesota law, its principal place of business was in Minnesota, and the sole member of the debtor was a Minnesota resident. The case was filed in Wisconsin based entirely upon the debtor’s affiliation” with another entity whose case was presently pending in Western Wisconsin. While venue was technically proper under the statute, the court agreed with the creditor that the case should be transferred to Minnesota. It would be far easier for all parties for the case to be heard in Minnesota, and the debtor’s connection with Wisconsin was tenuous at best. Motion granted.

Statute/Rule References:
28 U.S.C. § 1408 -- Venue of Cases Under Title 11
28 U.S.C. § 1412 -- Change of Venue

Key Terms:
Transfer

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