You are here

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

Alan L. Goldberg, Trustee v. Countrywide Home Loans, Inc. (In re Seaway International Transport, Inc), Adv. No. 05-1426, Case No. 03-41181-7 and 03-41182-7 (03/08/2006) (341 B.R. 333) -- Judge Thomas S. Utschig 03/08/2006

Case Summary:
Trustee sought to avoid certain alleged fraudulent transfers under 11 U.S.C. §§ 544 and 548. The corporate debtor made payments on the home mortgage of its sole principal and officer totaling some $14,000 over the four years prior to bankruptcy. The trustee contended that the debtor did not receive “reasonably equivalent value” for the transfers. The debtor’s principal argued that the payments were a portion of his compensation. In general, payments on behalf of a third party can be avoided in bankruptcy unless there was a clear benefit (or “value”) to the debtor. The principal took no salary or compensation from the debtor companies; the court concluded that the payments constituted a pattern of compensation and that the debtor received an “indirect benefit” from the payments.

Statute/Rule References:
11 U.S.C. § 544 -- Trustee as Lien Creditor
11 U.S.C. § 548 -- Fraudulent Conveyance

Key Words:
Trustee as Lein Creditor
Fraudulent Conveyance

Soneet R. Kapila, Trustee v. WLN Family Limited Partnership and Carlayne Holloway (In re LeNeve), Adv. No. 04-3014, Case No. 03-36439-7 (03/08/2006) (341 B.R. 53) -- Judge Thomas S. Utschig 03/08/2006

Case Summary:
Chapter 7 trustee brought action against defendant to recover alleged fraudulent transfer made by debtor. Creditor contended that she had invested some $700,000 in the debtor’s business ventures. The trustee sought to recover $957,000 in transfers. The court found that the trustee did not prove she recovered a $450,000 transfer. As to the remaining balance, the court concluded that she did provide “reasonably equivalent value” in the form of her investments. The fact that the debtor was apparently engaging in a fraudulent scheme did not preclude the defendant from asserting the right to recover her “investments.”

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

Key Terms:
Fraudulent Conveyance

In re Vangen, Case No. 05-13793-7 (11/23/2005) (334 B.R. 241) -- Judge Thomas S. Utschig 11/23/2005

Case Summary:
The debtor placed some $136,000.00 into retirement-related annuities immediately prior to her bankruptcy. The debtor’s former husband and the bankruptcy trustee both objected to her exemption claims. They contended that her bankruptcy planning justified denial of her exemption under Wis. Stat. § 815.18(10), which provides that an exemption may be denied if the asset was procured, concealed, or transferred with the intention of defrauding creditors. The court overruled the objections, finding that the debtor’s conduct was permissible.

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

In re E.S. Professional Services, Inc., Case No. 05-23206-7 (10/20/2005) (335 B.R. 221) -- Judge Thomas S. Utschig 10/20/2005

Case Summary:
Alleged debtor sought dismissal of involuntary bankruptcy petition on grounds that it had more than 12 creditors. The petitioning creditor contended that the debtor did not have more than 12 creditors. The court found that an involuntary bankruptcy petition was an extreme remedy with serious consequences for a debtor. Here, the debtor sought to handle its affairs outside the bankruptcy forum and the case appeared to be little more than an extension of an ongoing two-party dispute pending elsewhere. There was unlikely to be a meaningful payout to chapter 7 creditors. The involuntary petition was dismissed.

Statute/Rule References:
Fed. R. Bankr. P. 103 -- Involuntary Petition
11 U.S.C. § 303 -- Involuntary Cases

Judge Robert D. Martin

In re Boylen, Case No. 05-13208-7 (01/24/2006) -- Judge Robert D. Martin 01/24/2006

Case Summary:
Two and a half years prior to filing his Chapter 7 petition, the Debtor obtained a loan to purchase a manufactured home. The Debtor applied for a new title certificate from the Wisconsin Department of Commerce (DOC). His application was returned because he did not submit an existing certificate of title to accompany the application. The Debtor took no further action to title the home. When the Bank filed a motion for abandonment in the Debtor’s bankruptcy the Trustee objected, stating that the Bank’s lien was not perfected because there was no title showing the Bank’s interest. The Bank argued that its security interest in the Debtor’s home was perfected when the DOC received the application and accompanying fees, and that sending an existing certificate of title was unnecessary because one did not exist. The Bank’s alternative argument was that the Debtor did not own his home because there was no certificate of title indicating his ownership, and if the Debtor has no interest in the home the trustee has no standing to challenge the bank’s lien. The Court held that the Bank’s security interest was not perfected because the requirements of Wis. Stat. § 101.9213(2) were not met. Not having a certificate of title on hand is not the same as there being no certificate of title in existence. The Bank did not comply with statutory requirements to timely perfect its lien. The Bank’s argument that the Debtor did not own his home and that the Trustee lacked standing to object to the Bank’s motion also fails. Even if the Debtor did not have all the legal indices of ownership of the property due to his failure to comply with Wis. Stat. § 101.9209, he still has an equitable interest in the property based on his payment of the purchase price to the seller. The bankruptcy estate includes equitable interests of a debtor in property as of the commencement of the case. The Bank’s motion for abandonment was denied.

Statute/Rule References:
Wis. Stat. § 101.9203 -- When Certificate of Title Required
Wis. Stat. § 101.9213 -- Perfection of Security Interests
Wis. Stat. § 101.9214 -- Duties on Creation of Security Interest

Key Terms:
Security Interests - Perfection

In re C.Q., LLC, Case No. 03-17171-7 (12/19/2005) (343 B.R. 915) -- Judge Robert D. Martin 12/19/2005

Case Summary:
Chapter 11 debtor converted to Chapter 7. After conversion, the Debtor did not assume or reject its long-term lease with Madison East Shopping Center Partners (MESC), nor were any payments made for the amount due under the lease as required by 11 U.S.C. § 365(d)(3). Sixty days after conversion, the lease automatically terminated pursuant to 11 U.S.C. § 365(d)(4). MESC sought immediate payment of post conversion rent under 11 U.S.C. § 365(d)(3). The Trustee objected to immediate payment, arguing that the disputed amount was entitled only to administrative expense priority because there is no provision in the Bankruptcy Code granting “super-priority” status to claims under Section 365(d)(3). The Trustee also stated that the bankruptcy estate did not have funds sufficient to make the payment. The Court determined that the language in Section 365(d)(3) requiring “timely performance” places payment of rent before the payment of administrative expenses. That is true even where the bankruptcy estate is administratively insolvent. Pre-rejection lease payments are required to be timely made. Where the Trustee does not perform that obligation, he cannot be excused from the consequence of his nonperformance. The claims must be paid when due, or in any event prior to allowed administrative expenses.

Statute/Rule References:
11 U.S.C. § 363(c)(1)
11 U.S.C. § 365(d)
11 U.S.C. § 507
11 U.S.C. § 503(b)(1)

Key Terms:
Claims - Priority

In re Brunner, Case No. 03-16262-13 (12/15/2005) -- Judge Robert D. Martin 12/15/2005

Case Summary:
Four creditors in a Chapter 13 case filed claims secured by the Debtor’s home. A hearing was held to determine the value of the home. After subtracting the first three secured claims from the determined value, there was $4,024.22 in equity remaining. Therefore, the fourth claim (Sherman) was entitled to a secured claim of $4,024.22 and a general unsecured claim for the remainder of its claim. Sherman filed a motion to reconsider based on its assertion that the equitable doctrine of marshaling of assets should be applied. Since a priming creditor’s claim was also secured by the Debtor’s automobile, Sherman argued that the creditor should be required to satisfy its debt to the extent possible through the automobile, so to leave more equity in the home to secure Sherman’s debt. A request for marshaling of assets must be brought as an adversary proceeding pursuant to Bankruptcy Rule 7001. Sherman brought its request for marshaling as a defense to the Debtor’s objection to claim. Sherman’s attempt to argue for marshaling in this manner does not allow a full inquiry into facts relevant to the elements listed above. Nor was the evidence presented at the hearing sufficient to make the necessary findings, if the procedural requirements were ignored.

Key Terms:
Claims
Marshaling

In re Gustin, Case No. 04-12784-7 (12/06/2005) (343 B.R. 909) -- Judge Robert D. Martin 12/06/2005

Case Summary:
Debtor in a Chapter 7 asset case did not name one of her creditors in her bankruptcy schedules until Debtor’s assets were fully administered and the Trustee had filed a final account. As a result of the Debtor’s late inclusion of this creditor, the Creditor was unable to file a proof of claim and share in the distribution of assets. The Creditor was pursuing an action in State court against the Debtor, which was stayed while the bankruptcy was pending. Following the Debtor’s discharge the proceedings in state court continued. The Debtor attempted to use her discharge as a defense in the resumed state court action. The state court decided that pursuant to 11 U.S.C. § 523(a)(3)(A) the debt was not discharged because the creditor was not listed in time to file a proof of claim. The Debtor then filed a motion in this court to re-open her bankruptcy case to seek contempt remedies against the creditor for pursuing the action in state court. The Debtor was essentially asking this court to determine that the debt was discharged. That issue was already decided in state court, and the doctrine of issue preclusion prevents relitigation in Bankruptcy Court. The Debtor’s motion was denied.

Statute/Rule References:
11 U.S.C. § 362 -- Automatic stay
11 U.S.C. § 523(a)(3)
11 U.S.C. § 524(a)

Key Terms:
Claims
Rooker-Feldman

Richard Vosepka v. Garrett Geiger (In re Geiger), Adv. No. 05-0120, Case No. 05-11449-7 (11/09/2005) -- Judge Robert D. Martin 11/09/2005

Case Summary:
This court received a complaint objecting to the dischargeability of a debt on the last day to file such complaints. The filing fee accompanying the Complaint was paid by the Creditor’s personal check. Court staff returned the complaint and filing fee to the creditor under the belief that the fee could not be paid by personal check. However, only personal checks of debtors cannot be accepted. By the time the creditor re-submitted his complaint and filing fee, it was 10 days past the deadline for filing and the Debtor objected to the complaint as untimely. The Court found for the Creditor, holding that there is no authority for disallowing personal checks of non-debtors, therefore, the filing fee and the Complaint should have been accepted by the Court. The Creditor met the requirements for timely filing, and the Complaint was allowed.

Statute/Rule References:
Fed. R. Bankr. P. 4007(c) -- Time for Filing Nondischargeability Complaint
Fed. R. Civ. P. 5 -- Serving and Filing Pleadings and Other Papers

Key Terms:
Filing Fee

In re Howard, Case No. 05-16463-13 (10/31/2005) (333 B.R. 826) -- Judge Robert D. Martin 10/31/2005

Case Summary:
The Debtor appeared before the Court pursuant to an order to show cause as to why her current bankruptcy case should not be dismissed for failure to pay the filing fee in each of two previous bankruptcy cases she had commenced, one in 1995, and one in 1996. The Court took the matter under advisement to determine whether her debt to the court warranted dismissal of the present case, and if not, how unpaid filing fees from previous bankruptcies should be treated in the pending bankruptcy. The Court determined that debts for unpaid filing fees are general unsecured debts, and failure to pay the fees is not grounds for dismissal of the Debtor’s current bankruptcy case.

Statute/Rule References:
11 U.S.C. § 109(g)(1) -- Who May be a Debtor
11 U.S.C. § 1307 -- Conversion or Dismissal
28 U.S.C. § 1930 -- U.S. Trustee Fees

Key Terms:
Order to Show Cause - Unpaid Fees

Pages