200 F.3d 522 (7th Cir. 1999), 98-4006, Niedert v. Rieger
|Citation:||200 F.3d 522|
|Party Name:||Gerald T. Niedert, Plaintiff-Appellant, v. Richard J. Rieger, Defendant-Appellee.|
|Case Date:||December 29, 1999|
|Court:||United States Courts of Appeals, Court of Appeals for the Seventh Circuit|
Argued October 14, 1999
Appeal from the United States District Court for the Eastern District of Wisconsin. No. 98 C 317--J.P. Stadtmueller, Chief Judge.
Before Harlington Wood, Jr., Cudahy, and Kanne, Circuit Judges.
Cudahy, Circuit Judge.
In 1996, Richard Rieger filed for relief under Chapter 7 of the Bankruptcy Code. Gerald Niedert brought an adversary proceeding against Rieger under 11 U.S.C. sec. 523(a)(6), seeking determinations of liability and nondischargeability. After a four- day trial, the bankruptcy court determined, sua sponte, that Niedert was not entitled to damages from the defendant as a matter of Wisconsin law. The district court affirmed, and this appeal followed.
I. Facts and Disposition Below
In 1988, Richard Rieger purchased nine lots in the fourteen-lot Loramoor Subdivision in Lake Geneva, Wisconsin. Gerald Niedert had purchased Lot 8 in the same subdivision, which had frontage on the lake, a few years earlier. Also in 1988, Niedert began planning the construction of a home on his land. At that time, his lot was subject to a restrictive covenant limiting construction to a single-story home.1 During the annual meeting of the Loramoor Property Owners Board of Directors, on which Rieger sat, Niedert requested that the restriction be removed. The Loramoor Property Owners Association's Architectural Committee, of which Rieger was one member out of three, met to discuss whether they should lift the restriction on Niedert's lot. After their meeting on September 10, 1988, Jerry Polek (the Board President and member of the Architectural Committee) circulated a letter to all property owners asking whether they objected to Niedert's request. When no response was received objecting to the change, Niedert's request was granted. The Declaration of Restrictions was amended to allow Niedert to build a two-story home.2 Before beginning construction in 1993, Niedert submitted plans for his two-story home to the Architectural Committee for approval. Polek delivered the blueprints to Rieger, but apparently Rieger never approved them. Regardless, the other two members of the Committee approved the plans, and Niedert was ready to build.
In July of 1993, Niedert began construction of a two-story home on his land, and shortly after the basement was poured, he was sued. The Loebers, who had purchased Lot 3 from Rieger in the fall of 1989, were concerned that Niedert's two-story home would obstruct their view of the lake. Rieger had told the Loebers, when he sold them the lot, that any home built between Lot 3 and the lake would be no higher than a single story. The Loebers sued Niedert in state court, requesting a temporary injunction preventing further construction of the home. Rieger submitted an affidavit in which he stated:
[A]s far as I knew, Niedert could not build a two-story residence and . . . I was completely in the dark as to why Niedert believed otherwise. . . . I had absolutely no knowledge of any Amendment to the Declaration of Restrictions nor had I ever been asked for my consent to such Amendment.
Affidavit of Richard Rieger, para.para. 8, 9. On the strength of this affidavit, the state court granted the temporary injunction.
Niedert eventually settled with the Loebers, but as part of the settlement, Niedert dramatically altered the plans for his home, retaining a two- story design but reducing the roof elevation to about 31 feet. The alterations resulted in additional costs to Niedert of more than $120,000. Construction resumed after the settlement and continued until other neighbors, the Gellers, sued Niedert in September of 1994. The Gellers, represented by the Loebers' old attorney and armed with an affidavit from Rieger, requested a temporary injunction for the same reason as the Loebers. Rieger's affidavit was virtually identical to the one he supplied in the Loeber action. This time, however, the court denied the temporary injunction,
found the Gellers' claim frivolous and awarded Niedert almost $19,000 in costs and attorney's fees.
During the next couple of years, Rieger and his wife must have fallen on hard times: they filed for bankruptcy in 1996. After Rieger filed for Chapter 7 relief, Niedert brought an adversary proceeding before the bankruptcy court on the ground that Rieger's conduct in producing the false affidavits was willful and malicious under 11 U.S.C. sec. 523(a)(6), making any resulting damages nondischargeable. The bankruptcy court determined that Rieger's conduct was willful and malicious and found that Niedert had suffered more than $120,000 in damages as a direct result of the affidavit Rieger provided for the Loeber action. In the end, however, the court dismissed Niedert's claim because it found, sua sponte, that Niedert's injury was not compensable under Wisconsin law. Citing several Wisconsin cases, the bankruptcy court explained that "there is an overriding policy under state law which provides that a witness' statements, which include testimony, affidavits and depositions, made in connection with litigation are entitled to absolute immunity from civil liability, as long as the statements bear proper relationship to the issues being litigated." Niedert v. Rieger (In re...
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