In re Jodi L. Wagner, Case No. 09-33103(May 2015) -- Judge McGarity
The chapter 7 debtor opposed the trustee's motion to compromise a claim and administer the proceeds from a defective medical device MDL settlement award. The debtor underwent hip replacement surgery prepetition and, due to a recall of the device, hip revision surgery postpetition. The Court denied the trustee's motion for summary judgment, rejecting his argument that the claim exited prior to the debtor's filing because it was sufficiently rooted in the debtor's pre-bankruptcy past. Instead, the Court applied the "discovery rule" to determine whether or not the claim was property of the estate. Because the issue of whether or not the debtor knew of her injury or exercised reasonable diligence in discovering it prior to filing bankruptcy was a matter for trial, the debtor's motion for summary judgment was also denied.
Chapter 13 debtor objected to priority status of claim filed by attorney who represented the debtor's former spouse in state court proceedings. The debtor argued the state court awarded the attorney's fees with the intent to punish the debtor for misconduct in litigation, not for the purpose of enforcing the debtor's duty to support his former spouse and/or children. The court overruled the objection and allowed the claim as a priority domestic support obligation under sec. 507(a)(1)(A). The fees were incurred in litigation relating to the care, custody, and welfare of the minor children of the marriage.
The defendant moved to dismiss the chapter 13 debtor's adversary proceeding to set aside a prepetition transfer of real estate pursuant to a tax foreclosure judgment. The defendant argued the debtor lacked standing to pursue the action because the property owner of record was the debtor's mother who had died six years prior to the judgment. The Court denied the motion to dismiss, finding the debtor had standing because she had acquired an interest in the real estate upon her mother's death.
Court denied US Trustee's motion for partial summary judgment in action seeking denial of debtor's discharge. The court had previously ruled that creditors would be best served by converting debtor's chapter 11 case to chapter 7 due, in part, to debtor's lack of financial records. The prior ruling had focused on the effect of the proceeding on creditors; there was no "law of the case" regarding the elements of section 727.
IRS moved for relief from the automatic stay to allow setoff of the chapter 13 debtor's postpetition claim to tax overpayment against prepetition priority tax liability of the debtor due to the IRS. The court granted the motion, finding the nonbankruptcy right to setoff continued postconfirmation and the debtor only had right to a refund after the government had credited the tax overpayment against the tax liability under 26 U.S.C. sec. 6402(a).
A creditor filed a motion to dismiss the chapter 13 case filed by same-sex spouses, arguing the debtors were not "spouses" for purposes of sec. 302 because Wisconsin did not allow or recognize same-sex marriages. The Court denied the motion to dismiss and found that same-sex spouses married in a state that allows them to do so (Iowa), may file a joint bankruptcy case in a state that does not recognize their union as a marriage (Wisconsin) under the "place of celebration" rule, which requires the recognition of an out-of-state same-sex marriage as valid when interpreting the Bankruptcy Code.
Court found judicial lien on chapter 13 debtors' homestead was avoidable to extent trust monies were not traceable to homestead. Wisconsin law regarding exception to homestead exemption statute was discussed. Additionally, Court noted that exemption by default under section 522(l) did not appy in the context of lien avoidance. Note: This is a Court Minutes Decision, only.
After above-median income debtor's income decreased below the applicable median income following confirmation, he sought to reduce the plan duration to a period less than 60 months without also providing for full repayment to unsecured creditors. The trustee opposed confirmation of the modified plan. The court overruled the objection in part and sustained the objection in part. A postconfirmation modification could reduce the applicable commitment period, provided the change in circumstances inhibited the debtor's ability to fund the plan through the end of the original term, a determination which required further evidence.
In re Tammi Bastian, Case No. 13-21240, Debtor v. Fast EFNDS LLC, et al., Adv. No. 13-2198(February 2014) -- Judge McGarity
Defendants' motions to dismiss or, in the alternative, motion for summary judgment, were denied. The debtor's complaint seeking damages for alleged violations of the automatic stay stated a claim upon which relief could be granted. Additionally, the bankruptcy court had personal jurisdiction over the individual defendant and facts in dispute precluded summary judgment.
Chapter 13 trustee objected to confirmation of modified plan on grounds it did not provide for payment of all projected disposable income. The Court overruled the objection, finding the cash surrender value increase of the debtors' whole life insurance policy over the life of the plan was not disposable income to be paid as an additional dividend to unsecured creditors.