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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 Thomas S. Utschig

Organic Family, LLC, et al. v. Chad L. Pawlak and Jo Ann Pawlak (In re Pawlak), Adv. No. 10-0148, Case No. 10-11787-7 (02/07/2012) (467 B.R. 462) -- Judge Thomas S. Utschig 02/07/2012

Case Summary:
Plaintiffs sought to prevent the discharge of a $1.1 million default judgment for breach of fiduciary duty by member and general manager of limited liability company. On summary judgment, the court found that the default judgment did not preclude the debtor from revisiting issues of liability for fraud or fraud in a fiduciary capacity. The plaintiffs alleged that the debtor had concealed the existence of a lucrative contract and attempted to obtain the contract for his own company. The court found that even presupposing that the original contract existed, it was illusory and the plaintiffs suffered no actual harm from the alleged fraud. The court also concluded that even construing the facts in the light most favorable to the plaintiff, the debtor’s fiduciary obligations under state law did not constitute a fiduciary capacity under bankruptcy law. Summary judgment was granted in favor of the debtor.

Statute/Rule References:
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - Fraud
11 U.S.C. § 523(a)(4) -- Nondischargeability - Fraud in Fiduciary Capacity

Key Terms:
Discharge
Fiduciary Capacity
Fraud
Fraud – Fiduciary Capacity

Randi L. Osberg, Trustee v. George T. Fibison (In re Fibison), Adv. No. 10-0025, Case No. 08-15440-7 (12/12/2011) (474 B.R. 864) -- Judge Thomas S. Utschig 12/12/2011

Case Summary:
The trustee sought to recover a parcel of real estate as a fraudulent transfer. The defendant had purchased the property from his son pursuant to an unrecorded land contract and received title to the property via quit claim deed about ten months prior to the bankruptcy filing. The trustee contended that execution of the quit claim deed constituted a fraudulent transfer as the debtor did not receive reasonably equivalent value for the property. A “transfer” occurs for purposes of fraudulent conveyance law at the time when a subsequent purchaser could no longer acquire an interest in the property which is superior to that of the transferee. The defendant took actual possession of the property long before the date of the quit claim deed and a subsequent purchaser would have had constructive notice of his claim. The trustee likewise could not avoid the transfer as a fraudulent conveyance.

Statute/Rule References:
11 U.S.C. § 548 -- Fraudulent Conveyance
Wis. Stat. § 242 -- Fraudulent Conveyance

Key Terms:
Fraudulent Conveyance

Duane Joseph Kolve and Angela Susan Kolve v. Internal Revenue Service (In re Kolve), Adv. No. 11-0063, Case No. 10-18348-7 (09/22/2011) (459 B.R. 376) -- Judge Thomas S. Utschig 09/22/2011

Case Summary:
Debtors sought a determination that certain tax obligations were discharged as they had come due more than three years prior to the petition date. The IRS contended that the statutory “lookback” period should be extended due to the debtors’ prior chapter 13 case. The court concluded that the language of the statute which references the period in which “the stay of proceedings was in effect in a prior case” only authorizes an extension of the lookback period if the automatic stay in a prior case actually precluded the IRS from pursuing collection actions. The debtors’ plan had been confirmed before the taxes came due, and as a result the IRS was not “disabled” from collecting the taxes by the prior case. The taxes were discharged.

Statute/Rule References:
11 U.S.C. § 523(a)(1) -- Nondischargeability - Taxes

Key Terms:
Taxes - Nondischargeability

In re Fryseth, Case No. 11-12489-7 (09/14/2011) -- Judge Thomas S. Utschig 09/14/2011

Case Summary:
The debtors attempted to avoid a lien on a car on the grounds that the lien had not been properly assigned.  The court found that the lien had been assigned under the terms of Wis. Stat. § 342.21, which provides that a secured party may assign a security interest in a vehicle and that upon assignment, the assignee does not need to reissue the certificate of title with the assignee named as the secured party.  Under Wisconsin law, the assignment affected neither the owner’s interest nor the validity of the original security interest.  The debtors could not avoid the lien.

Statute/Rule References:
Wis. Stat. § 342.21-- Assignment of Security Interest

Key Terms:
Assignment of Security Interest
Security Interest - Assignment

Judge Robert D. Martin

Claire Ann Resop, Trustee v. Julie Anne Alberta McCoy et al. (In re McCoy), Adv No. 11-0090, Case No. 10-17916-7 (12/21/2011) (464 B.R. 832) -- Judge Robert D. Martin 12/21/2011

Case Summary:
The Trustee sought turnover of the Debtor’s interest in a trust, as well as turnover of an annual trust payment to which the Debtor was entitled. The Bankruptcy Court held that the Debtor’s interest in the Trust was not part of the bankruptcy estate because the trust was an enforceable spendthrift trust under Wisconsin law. The Court further held that the Trustee was not entitled to the annual payment, notwithstanding a Wisconsin statute that authorized judgment creditors to apply for principal payments of a spendthrift trust when they have become due or payable. Because the Trustee of the Trust had discretion to withhold the annual payment from the Debtor, it was not “due or payable,” and the Bankruptcy Trustee was not entitled to turnover. The Court granted summary judgment in favor of the Debtor.

Statute/Rule References:
11 U.S.C. § 523(a)(15) -- Nondischargeability - Marital Obligations
11 U.S.C. § 524 -- Discharge Injunction
11 U.S.C. § 541(c)(2)
Wis. Stat. § 701.06 -- Spendthrift Provisions and Rights of Creditors of Beneficiaries

Key Terms:
Discharge 
Divorce Decrees - Post Discharge Enforcement
Due or Payable
Principal Payment
Specificity of Statute
Spendthrift Trust
Turnover of Property

In re Keena, Case No. 09-14663-7 (12/13/2011) -- Judge Robert D. Martin 12/13/2011

Case Summary:
The Debtors own two parcels of real estate, which are adjacent to one another. One parcel contains the Debtors’ residence, the other parcel is a vacant lot on which the Debtors occasionally hunt and gather firewood. The Debtors claimed an exemption in both parcels of land under § 522(d)(1). The Trustee filed an objection to the Debtors’ claim of homestead exemption, contending that Debtors could not claim the exemption in both their residence property and an attached vacant lot. The Bankruptcy Court granted summary judgment in favor of the Trustee, holding that the adjoining parcel of land was not property that the Debtor or a dependent of the Debtor uses as a residence, and therefore, the Debtors could not claim an exemption in that parcel under § 522(d)(1).

Statute/Rule References:
11 U.S.C. § 101(13A)
11 U.S.C. § 522(d) -- Exemptions - federal
Wis. Stat. § 990.01(13)(a)
Wis. Stat. § 990.01(14)

Key Terms:
Adjacent Property
Homestead Exemption
Principal Residence
Vacant Lot

Michael E. Kepler, Trustee v. Earl Arthur Eichline, et al. (In re Eichline), Adv. No. 11-0100, Case No. 06-10658-11 (12/13/2011) -- Judge Robert D. Martin 12/13/2011
In re Clausen, Case No. 11-14480-7 and In re Jenkins, Case No. 11-14721-7 (11/16/2011) (464 B.R. 776) -- Judge Robert D. Martin 11/16/2011

Case Summary:
The Debtors’ bankruptcy schedules were not printed on the Official Forms. While most of the information required by the Official Forms was included, the Debtors’ homemade schedules departed somewhat in substance and substantially in format. The Chapter 7 Trustee moved to strike these schedules as failing to conform to Fed. R. Bankr. P. 1007(b)(1). Counsel for the Debtors objected, arguing the Official Forms do not have the force of law, and his submitted forms complied with Fed. R. Bankr. P. 9009.

The Bankruptcy Court granted the Trustee’s Motion to Strike Schedules in both cases. The Court held that while the Official Forms do not have the force of law, Fed. R. Bankr. P. 9009 requires that Official Forms prescribed by the Judicial Conference of the United States should be observed and used with alterations as may be appropriate. The alterations on the Debtors’ schedules were not appropriate.

Statute/Rule References:
11 U.S.C. § 521
Fed. R. Bankr. P. 1007
Fed. R. Bankr. P. 9009

Key Terms:
Appropriate Alterations
Bankruptcy Schedules
Official Forms

U.S. Bank National Association v. Plains Marketing Canada L.P. (In re Renew Energy, LLC), Adv. No. 11-0031, Case No. 09-10491-11 (08/24/2011) (2011 WL 3793157) -- Judge Robert D. Martin 08/24/2011

Case Summary:
The Trustee brought an adversary proceeding against Plains Marketing Canada under § 547(b) to recover payments the debtor made to Plains for the delivery of gasoline. Plains argued that the payments fell within the safe harbor provision of § 546(e) because they constituted settlement payments pursuant to three forward contracts. The Bankruptcy Court found that two contracts qualified as “forward contracts” under § 101(25) because they matured more than two days after the contracts were entered into. The third contract did not meet this definition. Because payments related to the forward contracts were protected by § 546(e), the Court granted Plains’s motion for summary judgment as to two of the contracts. Plains had also raised defenses under § 547(c)(2) and § 547(c)(4), but Plains failed to establish that the payments were made in the ordinary course of business or that new value had been given.

Statute/Rule References:
11 U.S.C. § 101(25)
11 U.S.C. § 101(51A)
11 U.S.C. § 546(e) -- Preferences
11 U.S.C. § 547(b) -- Preferences

Key Terms:
Forward Contract
Forward Contract Merchant
Maturity Date
Settlement

LeRoy Lee v. Harvey B. Haukaas (In re Haukaas), Adv. No. 10-0245, Case No. 10-14251-7 and Adv. No. 10-0246, Case No. 10-14242-7 (07/27/2011) -- Judge Robert D. Martin 07/27/2011

Case Summary:
LeRoy Lee filed two adversary actions against Harvey Haukaas, and a separate case against Harlan Haukaas to determine the nondischargeability of his claim under § 523(a)(4) and § 523(a)(6). The two cases were consolidated for trial. Just before trial, the parties agreed to submit stipulated facts, and a trial was never held. Lee argued that he was injured when the Defendants transferred corporate assets to a new corporate entity, which precluded his ability to collect on an unsecured debt that he was owed by the original corporation. Based on stipulated facts, the Court concluded Lee was not injured by the defendants’ conduct, because the original corporate entity that was controlled by the defendants had no assets that were unencumbered, and thus available for unsecured creditors. Accordingly, Lee failed to meet his burden under § 523(a)(6). The Court also found that Lee had neither established that an express trust existed, nor that the Defendants ever owed, or breached any fiduciary duties owed to Lee, as a creditor. As a result, Lee did not establish a claim under § 523(a)(4). The Court dismissed Lee’s complaint.

Statute/Rule References:
11 U.S.C. § 523(a)(4) -- Nondischargeability - Fraud in Fiduciary Capacity
11 U.S.C. § 523(a)(6) -- Nondischargeability - Willful and Malicious Injury
Wis. Stat. § 134.01

Key Terms:
Civil Conspiracy
Defalcation While Acting as a Fiduciary
Fiduciary Duties Owe Corporate Directors Owe to Creditors
Willful and Malicious - Defined

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