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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 Delafuente, Case No. 05-13151-13 (10/17/2005) -- Judge Robert D. Martin 10/17/2005

Case Summary:
Janesville Water & Wastewater, a creditor in the Debtors’ Chapter 13 case, sought priority status for its claim for unpaid utilities under 11 U.S.C. 507(a)(8). The debt was incurred up to April 22, 2005, and was not yet assessed as a tax. The Court determined that Janesville Water & Wastewater was not entitled to priority status because the claim had yet to be assessed as a tax, therefore there is no basis to claim a priority. Taxes for the unpaid utilities would not be assessed until November 16 of the year for which payment is owing, in this case November 16, 2005. 11 U.S.C. 507(a)(8)(B) grants priority to property taxes assessed before the commencement of the case, it does not grant priority to utility bills. Therefore, the claim of Janesville Water & Wastewater was not entitled to priority status.

Statute/Rule References:
11 U.S.C. 507(b) -- Priorities
Wis. Stat. § 66.0609 -- Financial Procedure; Alternative System of Approving Claims
Wis. Stat. § 66.0809 -- Municipal Public Utility Charges

Key Terms:
Priority

In re Chapman, Case No. 01-34985-13 (04/12/2005) (323 B.R. 470) -- Judge Robert D. Martin 04/12/2005

Case Summary:
When debtors have a post-petition personal injury claim that is exempt, the entire amount is exempt including an amount paid to the attorney out of the settlement funds.  Having received payment from the debtors, even though from exempt funds, the debtors' attorney was required by section 329 and Rule 2016(b) to disclose the agreement to receive the fees and receipt of the fees within 15 days.  The debtors' attorney failed to comply with the Code and Rule, and was erroneously informed by the trustee that she had to apply for the fees.  She did not have to apply for fees, she only had to disclose the fees received.  Under the mistaken impression that she needed court approval to receive the fees, the debtors' attorney returned the $2000 payment to her trust account, but when asked by the Court whether she had received the funds misrepresented to the Court that the funds were in her trust account where they had always been.  The court ultimately learned that the debtors' attorney had returned the funds from her operating account to her trust account immediately prior to the hearing.  While not material to the issue of whether the debtors' attorney had earned the fees under section 330, the attorney's misrepresentation was material to an analysis under section 329.  Although the misrepresentation was not ultimately very serious, the court sanctioned the debtors' attorney $1000, forwarded the opinion to the Wisconsin Office of Lawyer Regulation, and published its decision.

Ronald Holzhueter, et al. v. Gary E. Zinck (In re Zinck), Adv. No. 04-0057, Case No. 03-18909-7 (02/08/2005) (321 B.R. 916) -- Judge Robert D. Martin 02/08/2005

Case Summary:
Success in a section 523(a)(2)(A) adversary proceeding requires that the Plaintiff prove the five elements of fraud. The Plaintiffs waived their fraud claims for any transaction before July 1999, but the Court examined the merits of those claims nonetheless. The Debtor, who owned a large amount of the subject stock, failed to disclose to the Plaintiffs his relationship with the corporation's insider, and that he was selling the stock away from his employing investment company. Even if the Plaintiffs' pre-1999 claims had not been time barred, those claims would have failed. The Debtor's omissions were immaterial to the plaintiffs, and under the unique facts in this case the Plaintiffs were following the Debtors lead and not his credentials when they bought the stock. The debtor also lacked the intent to deceive. The evidence indicated that the Debtor sincerely believed that he was letting his friends in on a great deal. The Plaintiffs also failed to demonstrate that they justifiably relied on the Debtor's false statements. The Plaintiffs never read the disclosure statements which were accurate assessments of the risk involved. As for the 1999 transaction, the Plaintiffs had all of the information, and received no false information from the Debtor upon which to rely.

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
Wis. Stat. § 893.93

Key Terms:
Fraud

In re Moore, Case No. 04-14434-7 (12/08/2004) (318 B.R. 679) -- Judge Robert D. Martin 12/08/2004

Case Summary:
Where spouses are jointly liable for prepetition debt, but only husband files bankruptcy, wife's individual property remains available to satisfy the debt.  Actions by creditors against wife to separate wife's individual property from the couple's community property, which is protected by the section 524 discharge injunction, do not violate the discharge injunction.

Statute/Rule References:
11 U.S.C. § 362 -- Automatic Stay
11 U.S.C. § 524(a)
11 U.S.C. § 541 -- Property of the Estate
Wis. Stat. § 766.001

Key Terms:
Automatic Stay
Discharge 
Marital Property

In re Carr, Case No. 03-10182-13 (11/30/2004) (318 B.R. 517) -- Judge Robert D. Martin 11/30/2004

Case Summary:
Where secured lender, whose rights were modified by the plan in violation of section 1322(b)(2) failed to object to plan confirmation, and the plan was confirmed without objection, moves to vacate the plan as in violation of section 1325(a)(5), the plan must be vacated.  In the 7th Circuit, following Matter of Escobedo, a plan that violates the code is a nullity, and is properly vacated despite the creditor's failure to object, and despite section 1330 apparently allowing vacation of a plan only for fraud.

Statute/Rule References:
11 U.S.C. § 101(51)
11 U.S.C. § 502 -- Allowance of Claims
11 U.S.C. § 1322(a)(2)
11 U.S.C. § 1322(b)(2) -- Modification of Rights of Secured Claimants
11 U.S.C. § 1325 -- Confirmation of Chapter 13 Plan
11 U.S.C. § 1325(a)(5)
11 U.S.C. § 1330
Fed. R. Bankr. P. 3001(f)

Key Terms:
Confirmation - Chapter 13

Judge Thomas S. Utschig

Mark J. Wittman, Trustee v. Ameriquest Mortgage Company (In re Crossen) Adv. No. 04-0238, Case No. 04-14234-7 (05/11/2005) (325 BR 787) -- Judge Thomas S. Utschig 05/11/2005

Case Summary:
Chapter 7 trustee sought to avoid a mortgage as a preferential transfer. The debtor had refinanced his home and executed a promissory note for $187,000 on March 1, 2004. The defendant did not fund the loan until March 19, and did not record the mortgage until March 26. The trustee contended that this delay took the mortgage outside the safe harbor provision of 547(e)(2). The court found that the transaction qualified for the safe harbor provision, and that even if it did not, the delay did not preclude the transaction from being considered as a contemporaneous exchange for new value under 547(c)(1). Under the facts of the case, the Court found the transaction to be such a contemporaneous exchange. Judgment was entered in favor of the defendant.

Statute/Rule References:
11 U.S.C. § 547 -- Preferences

Xiong Vang v. UW Stout Student Business Services and Educational Credit Management Corporation (In re Vang), Adv. No. 04-0094, Case No. 04-11165-7 (324 B.R. 76) -- Judge Thomas S. Utschig 04/15/2005

Case Summary:
Debtor sought discharge of student loans. According to testimony at trial, the debtor was mildly mentally retarded and had difficulty speaking, reading, and writing the English language. In addition, he lived at or about the poverty level and cared for two preschool age sons, both of whom suffered from developmental delays. Accordingly, the Court discharged the debt as an "undue hardship."

Statute/Rule References:
11 U.S.C. § 523(a)(8) -- Nondischargeability - Student Loans

In re Vazquez, Case No. 00-16001-BKC-RAM-7 (S.D. Fla.), and In re Carro, Case No. 00-16003-BKC-RAM-7 (S.D. Fla.) (03/03/2005) (325 B.R. 30) – Judge Thomas S. Utschig 03/03/2005

Case Summary:
Trustee sought approval of settlement agreement with debtor. The primary creditor objected to the settlement and offered to “fund” ongoing litigation with the debtors. The trustee has the burden of demonstrating that a settlement proposal is both reasonable and in the best interests of the bankruptcy estate. The court must consider four factors when reviewing a proposed settlement: (1) probability of success in the litigation; (2) the difficulties, if any, to be encountered in collection; (3) the complexity of litigation and the expense, inconvenience, and delay associated with it; (4) the paramount interest of creditors and a proper deference to their reasonable views in the premises. The court found that despite the creditor’s promise to “fund” future litigation, all other circumstances supported approval of the settlement and the creditor’s perspective was unreasonable.

Marika Tolz, Trustee v. Robert M. Prestwood, Colleen M Prestwood a/k/a Colleen Murphy, and Lauren Financial Services Inc. (In re Prestwood), Adv. No. 03-6609, Case No. 02-23764-BKC-PGH-7 (02/09/2005) (322 B.R. 463) -- Judge Thomas S. Utschig 02/09/2005

Case Summary:
Debtor was entitled to claim Florida homestead exemption over objection of trustee. Trustee contended that the debtor was not a Florida resident and had instead claimed a California property as his residence. Notwithstanding conflicting testimony about the status of the Florida home as a “vacation property,” the court found that the debtor did reside in Florida and had intended to remain in Florida but for marital discord over the issue.

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

Lerneda J. Blossfield v. Todd Alan Blossfield and Maria Isabel Blossfield (In re Blossfield), Ave. No. 04-0103, Case No. 04-10802-7 (12/23/2004) (321 B.R. 913) -- Judge Thomas S. Utschig 12/23/2004

Case Summary:
Debtor acquired homestead property from his mother. At the time of the transfer, the parties contemplated that the mother would have a life estate in the home and that she would be able to live in the home. The debtor subsequently mortgaged the home and in so doing a new deed was recorded which did not contain the “life estate” provision of the old deed. While the debtor indicated he had his mother’s consent to terminate the life estate interest, she denied discussing it with him. The court found that the debtor did not have consent and that the destruction of the life estate interest constituted a “willful and malicious injury” under 11 U.S.C. § 523(a)(6).

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

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