WiscTex, LLC v. Galesky (In re Galesky)
| Decision Date | 21 December 2022 |
| Docket Number | Case No. 20-25509-gmh,Adv. Proc. No. 20-02146-gmh |
| Citation | 648 B.R. 643 |
| Parties | IN RE: Michael L. GALESKY, Debtor. WiscTex, LLC, Plaintiff, v. Michael L. Galesky, Defendant. |
| Court | U.S. Bankruptcy Court — Eastern District of Wisconsin |
Joyce W. Lindauer, Joyce W. Lindauer Attorney, PLLC, Dallas, TX, for Plaintiff.
Benjamin P. Payne, Hanson & Payne, LLC, Milwaukee, WI, Bryan M. Becker, Esq., Landmark Credit Union, Brookfield, WI, for Defendant.
DECISION AND ORDER FOR JUDGMENT
WiscTex, LLC, objects to Michael Galesky's discharge in his underlying chapter 7 case under various provisions of 11 U.S.C. § 727(a). To adjudicate WiscTex's objections, the court held a bench trial. After the parties filed court-ordered post-trial briefs, the court took the matter under advisement. This decision sets forth the court's findings of fact and states its conclusions of law, as required by Federal Rule of Civil Procedure 52, which applies here by operation of Federal Rule of Bankruptcy Procedure 7052.
The court need not consider the merits of WiscTex's objections to Galesky's discharge in this proceeding because WiscTex resoundingly failed to comply with the court's March 25, 2022 post-trial order, which expressly required WiscTex to file an opening post-trial brief "explaining why the court should enter judgment in its favor on one or more of its claims based on an application of the law to the facts shown by the evidence presented ." Ct. Mins. & Order (Mar. 25, 2022) at 2 (emphasis added). WiscTex's opening post-trial brief offers no comprehensible application of the law to the stated facts. More broadly, WiscTex's opening brief fails to show either that or how it has met its burden of proof in objecting to Galesky's discharge under § 727.
WiscTex's post-trial briefs are markedly slapdash and, as a result, exceedingly difficult to follow. They are fatally flawed, relying to a stunning degree on materials that were not used at the trial or offered or admitted into evidence, and replete with conclusory arguments, many of which are unsupported by citations to the evidence or legal authority. See, e.g., Pl.’s Closing Arg., ECF No. 75, at 4–5 & n.3 (); see also Ct. Mins. & Order (Mar. 25, 2022), ECF No. 71, at 1–2.
WiscTex's opening post-trial brief is nearly impenetrable. The first of that brief's two main sections is entitled, "Key Facts Presented", but the proffered "facts" are inconsistently peppered with largely unmoored commentary and outright argument. See Pl.’s Closing Arg. at 1–10. For example, among these "Key Facts" is a twelve-item list of transactions—which seem to have taken place between roughly 2012 and perhaps 2018, though for many there is no mention of when they occurred—described as instances of "Galesky's lavish spending", that concludes, "There is simply no question that [Galesky engaged in] all of these transactions ... [with the] inten[t] to acquire [assets] and then later transfer [those] assets from the purview of his creditors ...." Id. at 2–3 (emphasis added). To the extent WiscTex cites evidence of these transactions, rather than non-evidentiary materials, however, that evidence does not establish Galesky's intent as to any of them.1 The brief's other main section is entitled, "Elements of Plaintiff's Claims". Id. at 10–14. But, apart from nebulously laying out WiscTex's view of the law governing the provisions of § 727(a) under which it purportedly seeks denial of Galesky's discharge, this section only imprecisely alludes to various grounds on which WiscTex may be entitled to that relief; it contains citations to caselaw, though none that is binding precedent; and it appears to copy substantial portions of lower-court decisions without clearly indicating that it has done so. See id.2
WiscTex's failure to comply with the court's post-trial order unfairly complicated Galesky's task in responding to its opening brief, though, to his credit, Galesky's response brief is relatively clear. WiscTex's reply brief is somewhat more lucid than its opening brief—in large part because WiscTex adopted Galesky's organizational structure rather than adhering to its own—but that brief still fails in many of the same ways, and several others, as well, at times devolving into inanities.3
Despite significant efforts, the court is unable to ascertain with substantial certainty the grounds on which WiscTex believes it is entitled to judgment in its favor. And, as already noted, WiscTex failed to comply with the court's post-trial order. As a result, other than the arguments addressed in the remainder of this decision, WiscTex waives all arguments that it makes (or might have made or believes it made) in its briefs and its objections to Galesky's discharge, to the extent based on those arguments.4
Notwithstanding the preceding discussion, the court considers and addresses, in the remainder of this decision, WiscTex's arguments, insofar as those arguments are minimally discernable and plausibly suggest that WiscTex may be entitled to judgment, subject to the exceptions stated immediately below. But this is no truffle-hunting exercise. The court construes the "Facts" section of WiscTex's opening brief as just that and disregards any arguments made there, except to the limited extent that those arguments are sufficiently clear that Galesky was able to respond to them with specificity in his brief. Otherwise, the court construes the "Elements" section of WiscTex's opening brief as the sole source for its explications of applicable law and arguments for how that law applies to the facts, supplemented by WiscTex's reply brief to the extent that it properly clarifies or supports any such explications and arguments.5
To further sift WiscTex's properly raised arguments from its many conceivable ones, the court applies the following well-established principles:
Applying these principles and construing WiscTex's briefs as described above, the court considers the merits of only the following arguments that WiscTex makes for why Galesky's discharge should be denied:
The parties dispute many of the specific facts material to resolving the arguments by WiscTex listed above, particularly the inferences to be drawn from the evidence. Those disputes are addressed in detail, with respect to the issues to which they most closely relate, in section IV, below. The parties do not, however, meaningfully dispute the facts, in a general sense, and based on the evidence, the court finds as follows.
Galesky was born in 1971 and enlisted in the U.S. Army in 1990. Trial Ex. 44, ECF No. 35-52, at 2 (5:20–21); Trial Tr. (Mar. 18, 2022) at 35:23–24. He received an honorable discharge and has a service-connected disability. Trial Tr. (Mar. 18, 2022) at 36:22–25. Since 2000 he has received disability compensation from the Department of Veterans Affairs. Trial Ex. 44 at 6 (23:19–21). Since 2020 he has also received disability benefits from the Social Security Administration. Id. at 6 (23:22–23 & 24:3–7).
In January 2019 WiscTex sued Galesky in state court to enforce a loan guaranty.In ...
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