Gerard v. Gerard, No. 14-1496 (7th Cir. 2015)
Annotate this CaseMichael's brother, Kevin, purchased a lakefront lot. Michael was to cover expenses and ultimately purchase the lot. A dispute arose and Kevin put the lot up for sale. Kevin offered to reimburse Michael $54,049.10 and directed Michael to stop tampering with “For Sale” signs. Michael recorded a lien. Although Michael had about a 5% interest in the lot, the lien stated that Kevin “acquired title for convenience only.” Kevin sought a declaration of quiet title, and alleged slander of title, partition, and breach of contract. The jury was instructed, based on Wis. Stat. 706.13(1), which defines slander of title as submitting, entering, or recording, claim of lien, lis pendens, writ of attachment, financing statement or other instrument relating to a security interest in or the title to property, if the submitter “knows or should have known” that any part of the instrument was false, a sham, or frivolous. An interlocutory judgment of $281,000 was entered for Kevin. Michael filed a bankruptcy petition. Kevin asserted that their judgment was precluded from discharge under 11 U.S.C. 523(a)(6) as a “willful and malicious injury.” The bankruptcy court concluded that the issue was preclusively decided and entered judgment for Kevin. The district court affirmed. The Seventh Circuit reversed. The state court jury’s slander of title findings did not preclusively established that Michael acted “willfully.” The verdict could have been based on negligence.
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