10-11874 In re Peterson

By: WISCONSIN LAW JOURNAL STAFF//April 12, 2011//

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Bankruptcy
Issue preclusion

Issue preclusion does not bar a bankrupt gambler from contesting the dischargeability of a Nevada casino’s default judgment.

“Peterson never litigated the issue of fraud. Peterson stopped pursuing his case on, or shortly after, May 11, 2009. On May 21, 2009, Caesars filed an amended counterclaim alleging fraud. Before that date, Caesars had not alleged fraud. Peterson claims that he had no knowledge of Caesars’ amended counterclaim. He never responded to the Amended Counterclaim and he never filed an amended answer. As the Nevada Supreme Court determined – where no answer has been filed and a default judgment is entered, the issue involved has not been actually and necessarily litigated. Sandoval, 232 P.3d at 425.”

10-11874 In re Peterson

W.D.Wis., Martin, Bankr. J.

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