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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.

Chief Judge Catherine J. Furay

Susan Erlandson v. Gary E. Erlandson II (In re Erlandson), Adv. No. 21-00023, Case No. 20-11739-13 (03/28/2022) -- Judge Catherine J. Furay 03/28/2022

Case Summary:
Plaintiff, the former spouse of the Debtor-Defendant, filed an adversary proceeding to determine whether Debtor’s assumption of a home equity line of credit stemming from divorce proceedings was classified as a property division subject to discharge under 11 U.S.C. § 1328 or was classified as a nondischargeable domestic support obligation under 11 U.S.C. § 523(a)(5). The Court found that the totality of the circumstances, including intent, the financial situation of the respective parties, the type of debt assumed, and the credibility of the parties, all show that Debtor’s obligation to pay the home equity line of credit was in the nature of domestic support and thus nondischargeable under 11 U.S.C. § 523(a)(5). The parties’ financial circumstances at the time of the divorce proceedings establish that Plaintiff would not have been able to maintain the family home without Debtor’s payment of the home equity line of credit given the significant income disparities at the time of the separation. Further, the Court found that the great weight of authority holds that a spouse's assumption of debts enabling members of the family to remain in the marital residence is a nondischargeable obligation in the nature of support, maintenance, or alimony rather than a dischargeable property division.

Statute/Rule References:
11 U.S.C. § 101(14A) -- Definition of “Domestic Support Obligation”
11 U.S.C. § 1328(a)(2) -- Discharge
11 U.S.C. § 523(a)(5) -- Nondischargeability – Domestic Support Obligation

Key Terms:
Domestic Support Obligation

Travis P. Krizan and Ronald V. Krizan v. Beverly A. Krizan (In re Krizan), Adv. No. 20-00015, Case No. 20-10231-7; and Travis Krizan and Ronald Krizan v. Scott A. Krizan, Adv. No. 20-00017, Case No. 20-10233-13 (03/08/2022) -- Judge Catherine J. Furay 03/08/2022

Case Summary:
Three Debtors-Defendants each filed a voluntary Chapter 7 petition. Two Plaintiffs filed adversary proceedings against Debtors seeking a determination that debts owed by Debtors were nondischargeable under 11 U.S.C. § 523(a)(2). The adversaries were consolidated for hearing. The Court rendered its judgment for Plaintiffs against two of the Debtors and dismissed the complaint against the third. Plaintiffs’ attorney subsequently filed a Petition for Attorney’s Fees. Debtors objected to the Petition. The Court first found that to be entitled to attorney’s fees under 11 U.S.C. § 523(a)(2), attorney’s fees must be supported by a state statute governing the nature of the section 523 claim. Here, the supporting state statutes that governed the nature of the claim were Wis. Stats. §§ 943.20(1)(d) and 895.446(1) and (3)(b). Because these statutes allowed a prevailing party to recover attorney’s fees, Plaintiffs were entitled to attorney’s fees. Further, the Court disagreed with Debtors’ contention that there should be a one-third overall reduction in attorney’s fees because the complaint was dismissed against one of the three Debtors, stating that Debtors failed to consider that many tasks would have been performed even if the third Debtor had never been a defendant. Finally, the Court declined to exercise its discretion in awarding exemplary damages due to the fact that the Debtors were of modest means and there was no evidence that the improper conduct of either Debtor created a seriousness of the hazard to the public.

Statute/Rule References:
11 U.S.C. § 523(a)(2) -- Nondischargeability
Wis. Stat. § 895.446 -- Property damage or loss caused by crime
Wis. Stats. § 943.20(1)(d) -- Theft

Key Terms:
Attorney Fees
Exemplary Damages

In re Sternitzky, Case No. 21-11358-12 (01/27/2022) (638 B.R. 770) -- Judge Catherine J. Furay 01/27/2022

Case Summary:
Debtors filed a motion to stay any actions by Creditors in the Chapter 12 Proceedings relating to an Order Granting Relief From Stay and Co-Debtor Stay and Dismissal of the Chapter 12 Proceeding. A Secured Creditor objected. The Court granted the stay pending appeal pursuant to Rule 8007. Although the Debtors did not show a substantial likelihood of success on appeal, a public interest was implicated, and that parties would be harmed if the stay were imposed, the Debtors would face irreparable injury absent a stay. In particular, the Court found that were a stay not imposed, the objecting secured creditor would likely pursue a foreclosure sale on its collateral, causing the Debtors to lose their farm and farming operations and making a Chapter 12 difficult to accomplish. However, the Court found it appropriate to impose a conditional stay to balance both the potential harms to the Debtors and the objecting Secured Creditor.

Statute/Rule References:
Fed. R. Bankr. P. 8007 -- Stay Pending Appeal

Key Terms:
Bonds
Suspension of Proceedings

In re City View Land Development, LLC, and In re Klug, Case No. 21-10531-12 and 21-10532-12 (Jointly Administered) (12/23/2021) (636 B.R. 793) -- Judge Catherine J. Furay 12/23/2021

Case Summary:
Debtors filed a Joint Chapter 12 Plan of Reorganization providing for 8 classes of claims. The plan proposed to convert members of the Class 8 Allowed Unsecured Creditors’ (“Class 8 Creditors”) unsecured claims into secured claims 30 days after the plan was completed and extend payments to the Class 8 Creditors beyond the plan term. A member of the Class 8 Creditor Class and the Standing Chapter 12 Trustee objected to the proposed plan. The Court found that the Debtors’ proposed treatment of the Class 8 Creditors violated 11 U.S.C. §§ 1222(c) and 1222(b)(9). By waiting to grant security interests to the Class 8 Creditors until after the Plan is completed, Debtors proposed granting security interests in property that would have revested in the Debtors. The Court determined this would preclude the Class 8 Creditors from being classified as allowed secured claims, because allowed secured claims must be secured by property in which the estate has an interest. As payments would be impermissibly extended beyond the plan term to creditors who do not hold allowed secured claims, payment to the Class 8 Creditors could not be extended beyond a three-year term.

Statute/Rule References:
11 U.S.C. § 1222 -- Contents of Plan

In re Sternitzky, Case No. 21-11358-12 (12/23/2021) (635 B.R. 353) -- Judge Catherine J. Furay 12/23/2021

Case Summary:
Secured Creditor filed a Motion for Relief from Stay and Co-Debtor Stay and to Dismiss arising under 11 U.S.C. §§ 362(d)(1) and 1208(c). Secured Creditor claimed bad faith as well as lack of adequate protection as the bases. Debtors posited that equity in the property together with a stipulation moot the motions. The Court granted the Motion for Relief From Stay and Co-Debtor Stay and the Motion to Dismiss, finding that the Debtors' failure to perform under a previously confirmed Chapter 12 plan, repeated and unreasonable delays by Debtors prejudicial to creditors, and a pattern of waiting until the eve of foreclosure hearings to file bankruptcy confirmed litigation strategy and not an honest effort to perform under any Chapter 12 plan.

Statute/Rule References:
11 U.S.C. § 362(d)(1) -- Automatic Stay
11 U.S.C. § 1208(c) -- Conversion or Dismissal

Key Terms:
Automatic Stay
Conversion
Dismissal

Strategic Partners, Inc., and Michael Singer v. Scott C. Steuernagel (In re Steuernagel), Adv. No. 20-00073, Case No. 20-12148-7 (12/13/2021) -- Judge Catherine J. Furay 12/13/2021

Case Summary:
Plaintiffs Creditors filed a Motion for Partial Summary Judgment under 11 U.S.C. § 523(a)(2)(B) against Defendant Debtor. The Court denied Plaintiffs’ Motion for Partial Summary Judgment, finding that Plaintiffs failed to establish all of the required elements for summary judgment on the claims under 11 U.S.C. § 523(a)(2)(B), specifically whether there was intent to deceive and whether Plaintiffs reasonably relied on the Debtor’s written statements concerning Debtor’s financial condition. Further, the Court granted partial summary in favor of Defendant, dismissing one of the Plaintiff’s section 523 claims against Defendant. Because there was no evidence of Debtor being indebted to that Plaintiff in any way, and because section 523 requires there be a right to payment, that Plaintiff cannot make a successful claim under 11 U.S.C. § 523.

Statute/Rule References:
11 U.S.C. § 523(a)(2)(B) -- Use of a Statement in Writing
Fed. R. Bankr. P. 7056 -- Summary Judgment
Fed. R. Civ. P. 56(c)

Patrick S. Layng, United States Trustee v. Mark A. Ledin and Debra L. Ledin (In re Ledin), Adv. No. 21-00009, Case No. 20-12220-7 (11/19/2021) -- Judge Catherine J. Furay 11/19/2021

Case Summary:
After conducting a Rule 2004 Examination of the Debtors, the United States Trustee filed an adversary proceeding seeking denial of the Debtors’ discharge under Sections 727(a)(2)(B) and (a)(4). The Debtors denied the allegations, claiming they provided the necessary information to their prior counsel, who did not adequately include the information on their schedules, petition, and statements. The Court found that the Debtors’ ever-changing and often conflicting testimony and filed schedules demonstrated an intent to conceal property, resulting in a denial of discharge on the grounds that Debtors (1) intended to hinder, delay, or defraud a creditor or officer of the estate by concealing property of the estate post-petition, (2) made false oaths on their bankruptcy schedules, and (3) made false oaths at their Section 341 Meeting of Creditors.

Statute/Rule References:
11 U.S.C. § 727(a)(2)(B) -- Discharge
11 U.S.C. § 727(a)(4) -- Discharge

Key Term:
Discharge

In re Sievert, Case No. 17-10960-7 (10/27/2021) (634 B.R. 1030) -- Judge Catherine J. Furay 10/27/2021

Case Summary:
After learning of a previously undisclosed, pre-petition personal injury claim and subsequent settlement award given to Debtor post-discharge, the United States Trustee moved to reopen a Debtor’s Chapter 7 case and appoint a trustee. Five months after the case was reopened, the Debtor amended her Summary of Assets and Liabilities, Schedule A/B, and Schedule C to disclose the lawsuit for the first time and claim an exemption for the personal liability award. The trustee objected to the claim of exemption as untimely, arguing that (1) Debtor should have known about the personal injury lawsuit when she filed for bankruptcy, as she responded to a TV advertisement and filled out a retainer agreement in connection with the lawsuit shortly before she filed for bankruptcy, and (2) there was substantial delay between the reopening of her bankruptcy and the date on which she filed the amendments. In response, Debtor said she was unaware she had a claim and did not intentionally fail to disclose the lawsuit. The Court found that while Federal Rule of Bankruptcy Procedure 1009(a) provides a liberal right to file amended schedules, this right ends once a case is closed. As a result, a debtor seeking to amend schedules in a reopened case must request and establish cause for extending time to do so under Federal Rule of Bankruptcy Procedure 9006(b)(1). The Court found that because Debtor neither asked for an extension of time to file her Amended Schedule C nor attempted to show excusable neglect for failing to disclose the asset or file an Amended Schedule C before her case had closed, the Trustee’s objection must be sustained.

Statute/Rule References:
Fed. R. Bankr. P. 1009(a) -- General Right to Amend
Fed. R. Bankr. P. 9006(b) -- Enlargement

Key Term:
Excusable Neglect

Judge Rachel M. Blise

In re Rada, Case No. 21-10825-13 (10/12/2021) -- Judge Rachel M. Blise 10/12/2021

Case Summary:
Debtors filed a chapter 13 plan in which they proposed to pay directly two claims that are secured by the Debtors’ vehicles. The chapter 13 trustee objected to the plan, asserting the Debtors are required to pay the claims through the Trustee based on a long-standing practice in this District. The Court rejected the Trustee’s argument that all payments to pre-petition vehicle creditors must be disbursed through the Trustee. The Court overruled the Trustee’s objection but emphasized its decision is dependent on the facts and circumstances of this particular case, including that the Debtors had proposed a 100% plan, the maturity dates for the loans were after the plan’s completion date, and there were no pre-petition arrearages on the claims.

Statute/Rule References:
11 U.S.C. § 1322(b) -- Contents of Plan
11 U.S.C. § 1325(a)(5) -- Confirmation of Plan

Key Term:
Direct payments

In re Binkley, Case No. 21-11180-13 (09/23/2021) -- Judge Rachel M. Blise 09/23/2021

Case Summary:  
Debtors requested and obtained voluntarily dismissal of a previous chapter 13 case after their mortgage creditor requested relief from the automatic stay. They commenced another chapter 13 case less than 180 days later.  Section 109(g)(2) of the Bankruptcy Code provides that an individual debtor who voluntary dismisses his or her case following the filing of a request for relief from the automatic stay may not file another bankruptcy case until 180 days have passed.  The Court found that the Debtors dismissed the previous case after and as a result of the mortgage creditor’s motion for relief from stay.  The Court held that it did not have discretion to allow the case to proceed under the circumstances, and that § 109(g)(2) compelled the Court to dismiss this case because the Debtors are ineligible to be debtors.

Statute/Rule References:
11 U.S.C. § 109(g)(2) -- Who may be a debtor

Key Terms:
Eligibility
Voluntary Dismissal

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