United States District Court, W.D. Wisconsin
OPINION & ORDER
D. PETERSON DISTRICT JUDGE.
a consolidated bankruptcy appeal. Appellant Sondra Lisse and
her husband, Steven Lisse, mortgaged their home, and the
mortgage was later assigned to appellee HSBC Bank USA,
National Association. The Lisses defaulted on their mortgage,
HSBC filed a foreclosure action against the Lisses in state
court, and HSBC prevailed at summary judgment and before the
Wisconsin Court of Appeals. The Lisses then filed two
separate Chapter 13 bankruptcy petitions, which resulted in
the automatic stay that stalled the foreclosure of their
home. HSBC moved the bankruptcy court in Sondra Lisse's
case for relief from the automatic stay, and Lisse argued in
response that HSBC lacked standing to seek any relief from
the bankruptcy court because the loan document underlying the
mortgage (Note) had been forged. Lisse moved the bankruptcy
court to compel discovery on various matters, including the
Note's authenticity, and to sanction HSBC; HSBC moved for
a protective order in response.
now appeals three orders issued by the bankruptcy court: (1)
a March 6, 2017 order denying Lisse's motion to compel
discovery, to determine the sufficiency of HSBC's
discovery responses, and to sanction HSBC, No. 16-cv-206,
Dkt. 1-3; (2) a March 6, 2017 order granting HSBC's
motion for a protective order, No. 16-cv-207, Dkt. 1-2; and
(3) a March 7, 2017 order granting HSBC's motion for
relief from the automatic stay, No. 16-cv-208, Dkt.
This court will affirm all three decisions. Lisse's
discovery requests posed an undue burden for HSBC. The
Note's authenticity was already decided in Lisse's
foreclosure action in state court, so the doctrine of issue
preclusion barred Lisse from litigating the same issue again.
court begins by addressing a few preliminary matters. First,
Lisse has not provided a jurisdictional statement as
required. See Fed. R. Bankr. P. 8014(a)(4). This
court has jurisdiction over appeals from “final
judgments, orders, and decrees.” 28 U.S.C. §
158(a)(1). The bankruptcy court's March 7 order granting
HSBC relief from the automatic stay constitutes a final
judgment. Colon v. Option One Mortg. Corp., 319 F.3d
912, 916 n.1 (7th Cir. 2003). This court has jurisdiction
over the appeals from the March 6 discovery orders as well
because “once a final judgment is entered and appealed,
the appellant can challenge any interlocutory order.”
In re James Wilson Assocs., 965 F.2d 160, 166 (7th
Lisse named a wrong entity as the appellee. She named
HSBC's subservicer, Select Portfolio Servicing, Inc.
(SPS), as the appellee, and HSBC has been added as another
appellee by the clerk of court. SPS does not claim any right
as to the Note and has nothing to do with the bankruptcy
court's orders challenged on this appeal. Those orders
pertain to HSBC, and the outcome of this appeal determines
rights of HSBC, so HSBC is the proper appellee. See In re
Trans Union Corp. Privacy Litig., 664 F.3d 1081, 1084
(7th Cir. 2011).
contends that SPS is the proper appellee and that SPS should
have been named as a party during the bankruptcy proceedings
because HSBC signed a power of attorney authorizing SPS to
collect Lisse's debt on HSBC's behalf. Dkt. 15, at 5
(citing Dkt. 7-22). Lisse did not raise this argument before
the bankruptcy court, so it is waived. See Smith v.
Capital One Bank (USA), N.A., 845 F.3d 256, 262 (7th
Cir. 2016). Besides, the power of attorney says,
“Nothing contained herein shall be construed to grant
[SPS] the power to . . . initiate or defend any suit,
litigation, or proceeding in the name of Trustee, ”
which is defined as HSBC. Dkt. 7- 22, at 3. So Lisse is
mistaken as to the identity of the proper appellee, and the
court will amend the caption to show HSBC as the only
Lisse asks the court to take judicial notice of various court
orders from cases other than her own bankruptcy case,
documents filed in those cases, and certain documents filed
public (e.g., assignment of mortgage filed in Dane County).
Dkt. 8 and Dkt. 15-1. On a bankruptcy appeal, this court may
take judicial notice of court orders, litigants'
submissions in other cases, and documents made part of the
public record. See In re Salem, 465 F.3d 767, 771
(7th Cir. 2006) (taking judicial notice of court orders and
public documents); Cancer Found., Inc. v. Cerberus
Capital Mgmt., LP, 559 F.3d 671, 676 n.2 (7th Cir. 2009)
(taking judicial notice of complaint from another case). The
court will take notice of the court orders, public documents,
and those documents' contents. The court will not,
however, accept the truth of the matters asserted in
Lisse's court submissions, namely Lisse's contention
that the Note was forged. See Dkt. 8-6, at 11-19;
Opoka v. I.N.S., 94 F.3d 392, 395 (7th Cir. 1996)
(“A court may take judicial notice of a document filed
in another court not for the truth of the matters asserted in
the other litigation, but rather to establish the fact of
such litigation and related filings.” (quoting
Liberty Mut. Ins. Co. v. Rotches Pork Packers, Inc.,
969 F.2d 1384, 1388 (2d Cir. 1992))). The court will take
notice that those documents were filed with court and that
Lisse advocated for what she stated in her court submissions.
Lisse filed her briefs late. Lisse does not explain why she
could not file her opening brief by the deadline. As for the
reply brief, she says her counsel, Wendy Nora, could not
finish the brief on time because “a recent update to
her Acrobat program . . . prevented her from selecting text
from PDF documents.” Dkt. 14, at 1. This is not a good
reason for failing to meet the deadlines, but the court will
nonetheless consider Lisse's arguments and the merits of
this case so that Lisse is not penalized for her
court draws the following facts from Lisse's appendices,
exhibits attached to her briefs, her bankruptcy and
state-court foreclosure proceedings, and documents subject to
judicial notice. See, e.g., Dkts. 2-3, 7-9, 15;
In re Lisse, 16-bk-12556 (Bankr. W.D. Wis. filed
July 23, 2016); HSBC Bank USA National Association v.
Lisse, No. 2010-cv-2642 (Dane Cty. Cir. Ct. filed May
Lisse's loan and mortgage
2006, Lisse and her husband obtained the Note from New
Century Mortgage Corporation to finance their home. B. Dkt.
57-1. The Lisses also signed a mortgage
designating their home as security for the Note (Mortgage).
B. Dkt. 57-2.
2010, New Century assigned the Mortgage to HSBC. B. Dkt.
57-3. As for the Note, it was indorsed in blank, B. Dkt.
57-1, at 6, so under the Uniform Commercial Code, a party who
possesses the Note is its holder and has the right to enforce
it. See Wis. Stat. §§ 401.201(2)(km)(1);
403.205(2); 403.301. HSBC possesses the Note.
Lisse's foreclosure action in state court
April 2009, the Lisses stopped making payments for the Note,
and in May 2010, HSBC filed a foreclosure action against the
Lisses in Dane County. The Lisses filed a motion demanding
inspection of the Note, and HSBC produced it at an
evidentiary hearing. The Lisses adduced no evidence to
dispute the Note's authenticity at the hearing.
then moved for summary judgment. HSBC adduced an affidavit
from an employee of HSBC's subservicer, SPS, and the
affiant stated that she was familiar with the business
records maintained by SPS, that she reviewed the Lisses'
loan documents, that those documents were part of SPS's
business records, that the Note possessed by HSBC was the
original, and that the Lisses defaulted on their payments. In
response, the Lisses argued that the affiant lacked personal
knowledge because she did not see the Lisses sign the Note.
B. Dkt. 56-5. The circuit court rejected this argument,
explaining that a witness need not have personal knowledge of
the particular transaction to satisfy the business records
exception to the hearsay rule under Wisconsin law. Dkt. 8-6,
at 50 (citing Wis.Stat. § 908.03(6)). The circuit court
granted summary judgment in favor of HSBC.
Lisses moved for reconsideration, and the circuit court held
another hearing. The Lisses' counsel argued that the Note
and Mortgage produced by HSBC were not the original documents
and that HSBC had committed fraud. But when the circuit court
asked for evidence of forgery, the Lisses' counsel
admitted that there was none. B. Dkt. 74, at 29-30. The
circuit court then explained:
The bank has brought into court today a document that
I've determined to be an original document. It is the
note and the mortgage, two documents in this case which
appear to be the original documents. On the face of it they
are the holders of those documents because they're right
there on the table here in the courtroom in the possession of
the bank's counsel and they are --the note is endorsed in
blank without recourse by the original lender.
Well, there was no evidence presented on summary judgment or
the last time we saw a document here in court in April of
last year to rebut the bank's contention that they are
the holders of the original note and mortgage and my
examination today persuades me of that. And there is no
evidence offered today that that's not the original note
and mortgage, and I think under the law they are the holders
of the note and entitled to collect on it. So the motion for
reconsideration is denied.
74, at 30-32.
Lisses appealed, arguing that the Note and Mortgage were
“unauthenticated.” See Brief of
Appellant at 9, HSBC Bank USA v. Steven R. Lisse,
No. 2015AP273 (Wis. Ct. Appeals, filed Aug. 4, 2015). The
Wisconsin Court of Appeals affirmed, noting that whether HSBC
possessed the original Note was not “in dispute”
at summary judgment. HSBC Bank USA v. Lisse, 2016
WI.App. 26, ¶ 8, 367 Wis.2d 749, 877 N.W.2d 650. The
Lisses moved for reconsideration, arguing that they did
contest the Note's authenticity, B. Dkt. 56-6, at 2, and
the Wisconsin Court of Appeals summarily denied the
Lisses' motion. Id. at 21.