OpinionsDefendant issued professional liability policies to plaintiff, and plaintiff filed this adversary proceeding seeking a declaration that defendant was required to defend and indemnify him from malpractice claims asserted by his former patients. After the court denied defendant’s motion to dismiss the complaint, ruling that the complaint’s factual allegations and facts of which the court could take judicial notice did not establish that defendant’s rescission was timely under Wis. Stat. section 631.11 as a matter of law, defendant filed a motion for leave to appeal to the district court. The defendant then filed a motion requesting that the bankruptcy court stay the adversary proceeding pending the district court’s action on its appeal motion. The bankruptcy court denied the motion for a stay pending appeal, concluding that defendant was not likely to succeed on the merits of the motion for leave to appeal or the appeal itself, and further concluding that defendant had not demonstrated irreparable harm. Charmoli v. Aspen American Insurance Company, Adv. Proc. No. 22-02130 (April 2023) -- Chief Judge G.M. Halfenger The plaintiff-debtor seeks declaratory relief with respect to insurance coverage under several policies issued by the defendant. The defendant moved to dismiss the plaintiff's claims, arguing that there are no disputes of material fact with respect to whether it validly rescinded the policies at issue. The court denied the defendant’s motion because Wisconsin Statutes section 631.11, as applicable here, requires an insurer to "notif[y] the insured . . . of its intention to . . . rescind [a] policy" no later than 60 days after it "acquires knowledge of sufficient facts to constitute grounds for rescission of the policy" and the allegations in the operative complaint allow for the plausible inference to be drawn that the defendant acquired such knowledge more than 60 days before it gave the plaintiff notice of its intention to rescind the policies at issue. In re Java Berry, Case No. 22-22162 (March 2023) -- Chief Judge G.M. Halfenger The debtor's mother, who passed away prepetition, borrowed money and promised to repay it on a non-recourse basis from the sale of her home after her death, a transaction commonly known as a "reverse mortgage." The debtor's mother's probate estate has not been administrated. The debtor, who lived in the home for many years with his mother and continues to reside there, filed a chapter 13 bankruptcy petition and a plan proposing to pay the mortgage creditor an amount equal to the home's value. The mortgage creditor, which timely filed a proof of claim alleging it to be secured in full, objected to confirmation, arguing that the debtor did not have an interest in the property that could be provided for in his chapter 13 plan and that the legal owner of the property could not be determined until his mother's probate estate was administered. The court partially overruled the objection, reserving for an evidentiary hearing the mortgage creditor's contention that the plan understates the property's value. The court concluded that the debtor's plan could, consistent with the plan confirmation requirements of §1325, provide for the creditor's claim against the bankruptcy estate by affording the creditor the value of the property, which is all that the creditor could recover under nonbankruptcy law. Charmoli v. Aspen American Insurance Company, Adv. Proc. No. 22-02130 (March 2023) -- Chief Judge G.M. Halfenger The defendant filed a motion asking the district court to withdraw the reference of this proceeding from the bankruptcy court. The bankruptcy court entered a report and recommendation explaining that, in the interests of judicial economy and fidelity to Congress's division of labor between the district courts and bankruptcy courts with respect to bankruptcy proceedings, the defendant’s motion should be denied as premature and the reference should remain in place through the pre-trial stage or the motion should be granted only to the extent that the reference is withdrawn for the purpose of conducting a trial. In re Gerstner, No. 19-31628 (March 2023) -- Chief Judge G.M. Halfenger The debtors moved to reopen this chapter 7 case and amend the schedules to disclose a pre-petition personal-injury claim and exempt a portion of the net proceeds they received in a post-discharge settlement. The court concluded that after a case is closed, even if the case is reopened, a debtor may amend the schedules only if the court enlarges the time to do so, specified by Bankruptcy Rule 1009(a), which the court may do only if the debtor proves that the failure to amend the schedules before the case was closed was the result of excusable neglect, as required by Bankruptcy Rule 9006(b)(1). In re Charmoli, No. 22-24358 (January 2023) -- Chief Judge G.M. Halfenger After chapter 11 debtor Scott Charmoli removed state-court litigation to this court, the defendants moved to remand and abstain exercising jurisdiction over claims by and against a non-debtor LLC wholly owned by the debtor. Weeks before the deadline to file proofs of claim expired, two creditors who are parties to the removed litigation also filed a motion to extend the deadline to file proofs of claim until 14 days after they obtained a state-court judgment against the debtor. The creditors sought to postpone filing a proof of claim, recognizing that doing so would waive their right to a jury trial against the debtor. The court denied the motion to extend the deadline, ruling that the loss of a jury trial right that results from filing a proof of claim is not cause to extend the proof of claim filing deadline. WiscTex, LLC v. Galesky, Adv. Proc. No. 20-02146 (December 2022) -- Chief Judge G.M. Halfenger WiscTex, LLC, objected to Michael Galesky's discharge in his underlying chapter 7 case under 11 U.S.C.§727(a)(2), (3), (4) & (5). After a bench trial, based on the facts shown by the evidence presented, and considering the arguments for relief that WiscTex properly raised and developed in its post-trial briefs, the court concluded that WiscTex failed to prove that it is entitled to denial of Galesky's discharge under any of the cited paragraphs of §727(a). In re Greenpoint Tactical Income Fund LLC, Case No. 19-29613 (October 2022) -- Chief Judge G.M. Halfenger Freeborn & Peters LLP represented the Official Committee of Equity Security Holders for Greenpoint Tactical Income Fund LLC in these jointly-administered case. After plan confirmation Freeborn requested approval of its fees and expenses and the debtors filed a limited objection, which the court overruled. Greenpoint Asset Management II LLC v. Hallick (In re Greenpoint Asset Management II LLC), 646 B.R. 264 (Bankr. E.D. Wis. 2022) (September 2022) -- Chief Judge G.M. Halfenger Creditor filed a cross-motion for summary judgment on his claims that charging and levy orders obtained against the debtors pre-petition were not avoidable as preferences under 11 U.S.C. §547, because, as a matter of law, the liens were created outside of the 90-day preference period, based on the holdings in Mann v. Bankruptcy Estate of Badger Lines, Inc. (In re Badger Lines, Inc.), 590 N.W.2d 270 (Wis. 1999), and Associated Bank N.A. v. Collier, 852 N.W.2d 443 (Wis. 2014). The court denied Creditor’s cross-motion, concluding that, by application of §547(e)(1) & (2), the transfers at issue were made within the preference period. Cornerstone Pavers LLC v. Zenith Tech Inc., Adv. Proc. No. 21-2044 (July 2022) -- Chief Judge G.M. Halfenger After Cornerstone Pavers LLC and Zenith Tech Inc. sued each other for breach of a highway construction subcontract and the duty of good faith and fair dealing, Zenith sued West Bend Mutual Insurance Company on a bond allegedly insuring the performance of that subcontract. West Bend moved for summary judgment asserting that the bond it issued does not insure the subcontract at issue and, even if it does, Zenith failed to satisfy the conditions precedent to West Bend's obligations and liability under the bond. The court denied West Bend's motion because genuine disputes of material fact remain as to whether the bond insures the performance of the relevant subcontract and, construing the bond as a matter of law against West Bend, the undisputed facts show that Zenith did satisfy the conditions precedent to West Bend's obligations and liability under the bond. |