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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 Green, Case No. 01-34494-13 (03/28/2002) -- Judge Robert D. Martin 03/28/2002

Case Summary:
Estate moved for sanctions against Debtor's counsel for filing a Chapter 13 petition solely to harass the estate and cause it unnecessary delay. The Estate had received a judgment of foreclosure against certain real property of Debtor and a sheriff's sale had been scheduled. On the date of the sheriff's sale Debtor filed a Chapter 7 petition, staying the sheriff's sale. The Estate then obtained relief from stay. A second sheriff's sale was scheduled. Debtor's counsel filed a Chapter 13 petition without schedules or plan shortly before the sheriff's sale was to take place. Another automatic stay was obtained. The period in which the Debtor may file a payment plan ended without any plan being filed. Debtor's counsel filed a motion to withdraw as counsel citing Debtor's failure to confer with him on a payment plan and to pay his retainer fee. Counsel's motion was granted and the Chapter 13 case was dismissed. The Estate then filed a motion for sanctions under Bankruptcy Rule 9011. The Estate claims that Debtor's counsel had no legal basis for filing the Chapter 13 petition before a discharge was entered in the prior Chapter 7 and that the Debtor's sole purpose in filing the Chapter 13 was to prevent the second sheriff's sale from proceeding. The Estate established that Debtor's counsel had violated Rule 9011. Sanctions was ordered for fees and expenses related to filing of the Chapter 13 petition.

Statute/Rule References:
11 U.S.C. § 348 -- Conversion
11 U.S.C. §706
Fed. R. Bankr. P. 9011 -- Sanctions
Fed. R. Civ. P. 11 -- Sanctions

Key Terms:
Sanctions

In re Hommerding, Case No. 01-30061-13 (03/07/2002) -- Judge Robert D. Martin 03/07/2002

Case Summary:
Debtor returned to this Court asking that his second amended Chapter 13 plan be confirmed. Debtor initially came under this Court's jurisdiction as an involuntary Chapter 7 debtor and subsequently converted to a Chapter 13. Debtor filed a plan of reorganization and sought its confirmation. One of Debtor's petitioning creditors objected to the plan on the grounds that it did not satisfy 11 U.S.C. sec. 1325(a)(3)'s good faith requirement. Supporting its argument, the creditor pointed out that Debtor owes it a potentially non-dischargeable debt. It further argued that no sum would be paid to unsecured creditors under Debtor's plan and that the purpose of the Debtor's plan was to thwart his unsecured creditors. The Trustee also raised an issue as to the plan's feasibility noting that the original plan failed to satisfy a priority tax claim. Debtor had intended to use the proceeds from the sale of his gas station to pay that priority claim, but he did not have a full right to such proceeds at that time because his ex-wife also held a security interest in the property. This Court ruled that the plan could not be confirmed for its failure to meet the requirements of sec. 1322(a)(2) and sec. 507. This Court, however, granted Debtor leave to amend his plan to account for the priority tax claim. Debtor then obtained consent from his ex-wife to apply her share of the gas station's sale proceeds to the tax claim and filed an amended plan. The objecting creditor renewed its objection to confirmation and the trustee also objected to this amended plan because the Debtor proposed to make priority claim payments directly instead of through the trustee's office. The Debtor agreed to file a second amended plan responding to the Trustee's objection and the Trustee moved to dismiss the case. The case was then dismissed with a 14-day stay. The debtor filed the second amended plan within the 14-day stay period with an increase in payments and an extended plan length. The Trustee recommended confirmation of the second amended plan, but the creditor reasserted its prior objections. This Court determined that the plan could be confirmed over the objection of the creditor since it appears that debtor has made attempts to work out a repayment plan in accord with his current employment. The fact that Debtor had incurred a non-dischargeable debt to the objecting creditor would not mandate a finding of bad faith. Debtor's repayment plan appears to represent his best effort to repay his creditors and satisfies the good faith requirements for confirmation.

Statute/Rule References:
11 U.S.C. §507(a)(1) -- Priorities
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - Fraud
11 U.S.C. § 523(a)(6) -- Nondischargeability - Willful and Malicious Injury
11 U.S.C. § 1322(a)(2)
11 U.S.C. § 1325(a)(3)
11 U.S.C. § 1325(b)

Key Terms:
Confirmation - Chapter 13
Non-Dischargeable Debt

In re Gausewitz, Case No. 01-34926-13 (02/22/2002) -- Judge Robert D. Martin 02/22/2002

Case Summary:
Debtor sought to obtain credit to continue the operations of a ballroom. He eventually turned to Action Mortgage and its manager, Robert Call, for a loan. Following a strange transaction, debtor ended up the confused owner of a mortgage on a house he had never offered to purchase. Debtor also gave Action Mortgage a security interest in some construction equipment and vehicles which he owned. Debtor was unable to maintain payments on the mortgage and quitclaimed the house to Robert Call. Mr. Call took possession of the house and collected rents from the lessees who occupied it, but did not credit any amount to debtor's obligation to Action Mortgage. Debtor filed for chapter 13 relief and objected to the validity of Action Mortgage's claim against him alleging that the claim was obtained by fraud. Debtor further objected to the amount of Action Mortgage's claim arguing that the quitclaim terminated all or a significant portion of his debt. Mr. Call, on behalf of Action Mortgage, disagreed with debtor's contention and testified that the quitclaim did nothing to alter the original terms of the loan. Action Mortgage further alleged that its claim against debtor had risen to include accrued interest and filed a proof of claim in that amount. Action Mortgage also obtained a default judgment in state court for replevin of specified equipment against debtor and sought relief from the automatic stay to enforce its judgment. Debtor objected to Action Mortgage's claim and his testimony supported his allegations of fraud. He also called into question the amount owed to Action Mortgage in light of the quitclaim. The final burden of persuasion rested upon Action Mortgage to prove its claim. Action Mortgage did not present evidence sufficient to carry this burden. Debtor's objection to Action Mortgage's claim was sustained and Action Mortgage's motion for relief from stay was denied.

Statute/Rule References:
11 U.S.C. § 362(g)(1)
11 U.S.C. § 502 -- Allowance of Claims
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability - Fraud
11 U.S.C. § 547 -- Preferences
Fed R. Evid. 1002 -- Requirement of Original
Fed R. Evid. 1003 -- Admissibility of Duplicates
Fed R. Evid. 1004 -- Admissibility of Other Evidence of Contents
Fed. R. Bankr. P. 3001(d)
Fed. R. Bankr. P. 3001(f)

Key Terms:
Adequate Protection
prima facie Evidence
Security Interests - Perfection

Steven Derkson, v. Tori L. Tomas-Haarstick (In re Tomas-Haarstick), Adv. No. 01-3227, Case No. 01-34821-7 (12/07/2001) -- Judge Robert D. Martin 12/07/2001

Case Summary:
This case involves hypothetical discharge and its procedural requirements.  Plaintiff filed an adversary complaint to determine whether a debt was dischargeable and the Debtor answered.  But the Plaintiff filed the initial complaint thinking it was against Debtor’s husband who has a similar first name as debtor.  Plaintiff amended the complaint by adding allegations against Debtor’s husband and objecting to the hypothetical discharge of his tortious debt.  However, Plaintiff did not seek the Debtor’s or Court’s consent before amending the complaint.  In addition, the Plaintiff did not name Debtor’s spouse on the amended complaint.  The time limit to object to Debtor’s discharge had since passed.  Debtor filed a motion to dismiss the adversary proceeding contending that any complaint seeking to deny Debtor’s spouse’s hypothetical discharge is now time barred.  Plaintiff responded by filing a motion to enlarge the time within which to bring the action under § 523(a)(6), which motion in itself is untimely but which was considered as a motion to further amend the Complaint under Fed. R. Civ. P. 15(c).  It was determined that the motion to amend the Complaint to name Debtor’s spouse as a defendant is granted.

Statute/Rule References:
11 U.S.C. § 523(a)(3)
11 U.S.C. § 523(a)(6) -- Nondischargeability - Willful and Malicious Injury
11 U.S.C. § 524(a)
Fed. R. Civ. P. 15(a) -- Amendments
Fed. R. Civ. P. 15(c)(3)

Key Terms:
Hypothetical Discharge

In re Party Concepts, Inc., Case No. 01-34625-11 (09/06/2001) -- Judge Robert D. Martin 09/06/2001
Naly Phaboriboune v. Samrit Sasopa (In re Sasopa), Adv. No. 99-3013, Case No. 98-35054-7 (08/06/2001) -- Judge Robert D. Martin 08/06/2001

Case Summary:
In 1996 Debtor physically attacked Plaintiff.  Debtor was charged with aggravated battery with intent to cause substantial bodily harm and pled guilty.  In 1998 Plaintiff commenced an intentional tort action against Debtor.  Prior to judgment being rendered debtor filed her Chapter 7 petition staying the tort action.  Plaintiff filed this adversary proceeding seeking summary judgment arguing that as a result of the guilty plea in the criminal action, debtor was collaterally estopped from contesting the willful and malicious nature of the injury that gave rise to the debt.  The Court denied the summary judgment motion.  The parties agreed to lifting the stay to permit the state tort action to proceed to judgment, which was subsequently entered.  Plaintiff then moved for summary judgment for a second time contending that the tort judgment supports collateral estoppel and bars debtor from contesting the willful and malicious nature of her debt for purposes of § 523(a)(6).  This Court determined that she was correct and granted her motion for summary judgment.

Statute/Rule References:
11 U.S.C. § 523(a)(6) -- Nondischargeability - Willful and Malicious Injury
28 U.S.C. § 1738 -- State and Territorial Statutes and Judicial Proceedings: Full Faith and Credit
Wis. Stat. § 940.19(5)

Key Terms:
Collateral Estoppel
Discharge
Summary Judgment

Kevin R. and Laurie J. Reigle v. First American Credit Union (In re Reigle), Adv. No. 00-3217, Case No. 00-34495-7 (07/31/2001) -- Judge Robert D. Martin 07/31/2001

Case Summary:
Debtors challenged claim of First American Credit Union (“FACU”). At issue is whether a car pledged as security for a direct loan also secured a credit card debt by virtue of a dragnet clause in the loan contract. Both parties moved for summary judgment based on stipulated facts. Debtors made three arguments: that FACU never explained the meaning of the dragnet clause in the contract; that they did not read the dragnet clauses and had no intention of pledging the car as security for the credit card debt, and that the dragnet clauses in the Rules and car loan contract "were in boilerplate fine print." FACU countered that the dragnet clauses were customary and ordinary provisions and that debtors’ intent to pledge the car as security interest for the credit card debt is evident from the fact that debtors received the Rules and signed the car loan contract, both of which included dragnet clauses. FACU further argued that it had no obligation to explain the meaning or effect of the dragnet clauses to debtors. It was determined that the intent of debtors to grant FACU a security interest in the car for other debts is evident from the clear language of the dragnet clauses in the Rules and the car loan contract.

Key Terms:
Security Interests - Creation
Summary Judgment

William J. Rameker, Trustee, v. Farmers & Merchants Union Bank v. United States of America – Farm Service Agency – CCC (In re Hahn), Adv. No. 00-3054, Case No. 98-36236-7 (07/27/2001) -- Judge Robert D. Martin 07/27/2001

Case Summary:
This adversary proceeding was brought by the trustee against Farmers Bank to determine the validity of Farmers Bank’s security interest in proceeds from crop support contracts between Debtors and the USDA.  The parties reached a stipulated resolution.  In exchange, Farmers Bank released its claim on proceeds that had been paid to the Estate and the Trustee agreed to assist Farmers Bank in securing unpaid proceeds that the USDA had refused to pay.  The USDA was then joined.  The USDA argued that the PFC contracts were rejected and deemed that rejection a breach of the PFC contracts, which entitled the USDA to treat the contracts as void.  The Trustee and Farmers Bank argued that the PFC contracts were abandoned in the Chapter 11 case, leaving nothing to be rejected either before or after the case was converted.  The PFC contracts were abandoned by a proper order in the Chapter 11 case.  That abandonment removed the contracts from the chapter 11 estate and ended the Bankruptcy Court’s jurisdiction over them.  The abandoned status of the contracts was not altered by the conversion of the case to Chapter 7.  The effect of abandonment was to return all parties to the PFC contracts to their legal positions prior to the bankruptcy filing.

Statute/Rule References:
11 U.S.C. § 348 -- Conversion
11 U.S.C. § 365 -- Executory Contracts
11 U.S.C. § 541 -- Property of the Estate

Key Terms:
Abandonment
Executory Contracts

Wayne K. Crawford v. Department of Treasury Internal Revenue Service (In re Crawford), Adv. No. 00-3190, Case No. 00-34046-13 (07/23/2001) (2001 WL 1136919) -- Judge Robert D. Martin 07/23/2001

Case Summary:
Shortly before Debtor filed for bankruptcy he filed his federal income tax return for the previous year and was entitled to a refund. Approximately one month after the tax return was filed, the IRS applied the refund to Debtor's 1993 federal income tax deficiency. The IRS filed a proof of claim for unsecured priority (for 1995 and 1996) and non-priority (for 1993 and 1994) taxes due. Debtor then brought this adversary proceeding seeking to reallocate the funds set off by the IRS and objecting to its claim of priority for the 1995 taxes. The parties agreed that the IRS had a valid right to setoff under § 553(a). Debtor contends that it is inequitable to permit the IRS to setoff against non-priority debts, rather than priority debts, because this gives the IRS a preference over other general creditors. However, a setoff under § 553 is a preference condoned under the Code and an exception to the bankruptcy principle of equal distribution among creditors. It was determined that the IRS had properly exercised its ability to off set in this case. It was further determined that because the due date for the debtor's 1995 tax return fell outside the three-year period preceding his bankruptcy case, the 1995 taxes would ordinarily not be entitled to priority under § 507(a)(8). There was an added wrinkle in the case, however, since the Debtor had previously filed bankruptcy in 1996 and was discharged in 1997. The IRS argued that the three-year period of § 507(a)(8) was tolled during the period of the prior bankruptcy case and for an additional six months thereafter. It was determined that § 6503(h) is given effect by § 108(c) and that the two provisions operate jointly to toll the three-year period in § 507(a)(8) when the taxpayer's assets are tied up in a court proceeding. It was further determined that the 1995 taxes are entitled to priority under § 507(a)(8).

Statute/Rule References:
11 U.S.C. § 108(c)
11 U.S.C. § 507(a)(8)
11 U.S.C. § 523(a)(1)(A) -- Nondischargeability - Taxes
11 U.S.C. § 553 -- Setoff
26 U.S.C. § 6402(a) -- General Rule
26 U.S.C. § 6503(h) -- Cases Under Title 11 of the United States Code

Key Terms:
Taxes
Setoff

Judge Thomas S. Utschig

George C. Mallinckrodt v. Chemical Bank, Nellie Mae, Sallie Mae, The Education Resources Institute, Inc and USA Group Loan Services, Inc. (In re Mallinckrodt), Adv. No, 00-1220, Case No. 00-10957-7 (03/28/2001) (260 B.R. 892) -- Judge Thomas S. Utschig 03/28/2001

Case Summary:
Debtor brought adversary proceeding to determine whether his student loans should be discharged as an “undue hardship” within the meaning of 11 U.S.C. § 523(a)(8).  The court concluded that the debtor’s financial condition was such that he would not be able to maintain a minimal standard of living if required to repay the loans.  Further, this condition was likely to persist for the foreseeable future, and the debtor had acted in good faith.  There is also no basis for restructuring or deferring the debt.  Reversed on appeal.

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

Key Terms:
Student Loans

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