John Doe v. Archdiocese of Milwaukee, 743 F.3d 1101

Claimant A-49 alleged sexual abuse by Father David Hanser in the late 1970s and entered a 2007 voluntary mediation with the Archdiocese of Milwaukee.
At mediation, Archdiocesan representative Barbara Cusack told A-49 the first report about Hanser arose in the mid‑ to late‑1980s and that there were no other reports from victims at St. John Vianney.
A-49 accepted a $100,000 settlement and signed a broad release of all claims relating to Hanser.
In 2011 the Archdiocese filed Chapter 11; later disclosures showed it possessed earlier allegations about Hanser that contradicted Cusack’s mediation statements.
A-49 filed a bankruptcy claim seeking recovery; the Archdiocese moved to disallow the claim under the release. A-49 asserted fraudulent inducement and sought rescission but submitted only an affidavit saying Cusack’s statements were “very important” and that he believed her.
The bankruptcy court (and the district court on appeal) granted summary judgment disallowing the claim, finding insufficient evidence of actual detrimental reliance and denying A-49’s counsel leave to supplement the record with oral testimony or an additional affidavit.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether A-49 may rescind the settlement for fraudulent inducement when mediator misrepresented Archdiocese’s prior knowledge	Cusack’s statements were "very important" and induced A-49 to settle; settlement should be voided for fraud	No proof A-49 actually (and detrimentally) relied on the misrepresentations; release is enforceable	Court affirmed disallowance: A-49 failed to show actual reliance that substantially contributed to his decision to settle
Proper standard for actual reliance in rescission claims under Wisconsin law	(implied) but-for or predominant causation required	Restatement §167 standard: misrepresentation need only substantially contribute to assent	Court held Wisconsin would follow Restatement §167 (substantial contribution), but A-49 still failed that test
Whether bankruptcy court abused discretion by denying request to supplement record with oral testimony / new affidavit	Counsel should have been allowed to present oral testimony or another affidavit to prove reliance	Court: oral testimony at summary judgment is disfavored; no offer of proof was made about substance of additional testimony	Denial was within discretion; counsel made no offer of proof so no abuse of discretion

First Nat’l Bank & Trust Co. of Racine v. Notte, 293 N.W.2d 530 (Wis. 1980) (adopting Restatement approach to rescission for misrepresentation)
John Doe 1 v. Archdiocese of Milwaukee, 734 N.W.2d 827 (Wis. 2007) (limitations and accrual rules for clergy‑abuse claims; relevance to plaintiffs’ litigation risk at mediation)
Stewart v. RCA Corp., 790 F.2d 624 (7th Cir. 1986) (oral testimony at summary judgment is permissible but should be rare)
Seamons v. Snow, 206 F.3d 1021 (10th Cir. 2000) (summary‑judgment record should rest on affidavits/documentary evidence rather than oral testimony)
In re United Air Lines, Inc., 438 F.3d 720 (7th Cir. 2006) (summary‑judgment standard; construing facts in favor of nonmoving party)