ELR Citation: ELR 20669
No(s). 90-0280 (Wis. Ct. App. Feb 5, 1991)

The court holds that a bankrupt corporation and two bankruptcy trustees may be liable in a civil forfeiture action under Wisconsin's Hazardous Waste Management Act, and whether they intentionally and knowingly failed to obtain a hazardous waste facility operating license presents a material issue of fact to be resolved in the trial court. The court first holds that summary judgment was inappropriate as to one of the bankrupt corporations because the complaint failed to state a claim against the corporation. Although the circuit court granted the bankrupt corporation's motion to amend the complaint after this appeal was taken, the propriety of a summary judgment motion must be based on the record below, which did not include the amended complaint. The court next holds that the grant of summary judgment against the former bankruptcy trustees must be reversed because no determination was made in the circuit court as to the trustees' intentional and knowing failure to obtain a license to operate the bankrupt corporation's hazardous waste facility, which is an element of proving that the trustees were subject to personal liability. Evidence at trial revealed that barrels containing hazardous waste sludge were stored for more than 90 days while under the authority of one of the trustees. The court next holds that because the issue of the trustees' personal liability for civil forfeiture under state law was not before the bankruptcy court, that issue is not barred by res judicata. The bankruptcy court previously decided against imposing liability on either the bankrupt estate or the other bankrupt corporation or its secured creditor for the costs of cleanup under state and federal environmental laws. However, despite the extensive adversary proceedings in this case, the state failed to establish that the bankruptcy trustees knowingly and intentionally failed to obtain a license.

An amicus brief filed in this litigation is digested at ELR 66132.]

Counsel for Appellants
Joseph Niebler
P.O. Box 825, Brookfield WI 53008
(414) 784-6630

David J. Matyas
366 Main Ave., DePere WI 54115
(414) 336-2333

Counsel for Respondent
John S. Greene, Ass't Attorney General
P.O. Box 7857, Madison WI 53707
(608) 266-3936