464 B.R. 807
Bankr. E.D. Wis.2012Background
- Debtors allege Aurora attached confidential medical bills to proofs of claim in multiple Chapter 13 cases, violating Wis. Stat. § 146.82.
- The court previously granted summary judgment for Aurora, which led to a Seventh Circuit appeal; Stern v. Marshall later limited bankruptcy judges’ authority over final orders in state-law-centered matters.
- The Seventh Circuit remanded, holding final judgment could not be issued by an Article III judge; district court/ bankruptcy court considered §157(c)(1) procedures for proposed findings of fact and conclusions of law.
- This Court on remand considered core versus non-core status and whether it should issue proposed findings or withdraw the reference.
- Dispositive theories in Aurora’s motion included judicial estoppel, absolute litigation privilege, and lack of proof of actual damages; Debtors disclosed the claims to trustees but did not amend bankruptcy schedules.
- The proposed findings conclude that summary judgment should be denied on estoppel and privilege, but granted as to damages due to absence of actual damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Judicial estoppel applicability | Ortiz/Bembenek argue post-petition disclosure suffices | Aurora says failure to amend schedules estops the claims | Denial of summary judgment on judicial estoppel. |
| Litigation privilege vs. Wis. § 146.82 | Statute supersedes common-law privilege; disclosures permissible | Privilege should apply, shielding statements in pleadings | Privilege may be trumped by § 146.82; issue not resolved in favor of privilege. |
| Actual damages requirement under Wis. Stat. § 146.84 | Damages not required for nominal claims; damages may be future/unknown | Actual damages required; absence defeats claim | Actual damages are required; Debtors failed to prove them; claim fails on that basis. |
Key Cases Cited
- Matthews v. Potter, 316 F. App’x 518 (7th Cir. 2009) (disclosure to trustee suffices to prevent judicial estoppel in some contexts)
- Jacque v. Steenberg Homes, Inc., 209 Wis.2d 605 (Wis. 1997) (nominal damages rule; exceptions for certain intentional torts)
- Bergman v. Hupy, 64 Wis.2d 747 (Wis. 1974) (absolute privilege for statements in judicial proceedings when relevant)
- Kensington Dev. Corp. v. Israel, 142 Wis.2d 894 (Wis. 1988) (statute can supersede litigation privilege in specific contexts)
- Renzi v. Morrison, 249 Ill.App.3d 5 (Ill. App. 1993) (statutory confidentiality acts may override common-law privileges)
- Wynn v. Earin, 163 Wash.2d 361 (Wash. 2008) (medical privacy statute supersedes witness immunity)
- Heintz v. Jenkins, 514 U.S. 291 (U.S. 1995) (FDCPA applicability to attorneys’ litigation activities)
- Plywood Oshkosh, Inc. v. Van's Realty & Constr., Inc., 80 Wis.2d 26 (Wis. 1977) (damages must be proven with reasonable certainty)