State of Wisconsin, Department of Workforce Develo v. Miller

UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF WISCONSIN
In re:
Varenza Lavonda Miller, 	Case No. 25-22296-beh
Debtor. 	Chapter 7
State of Wisconsin,
Department of Workforce Development,
Plaintiff,
v. 	Adv. No. 25-02096-beh
Varenza Lavonda Miller,
Defendant.
DECISION GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
On April 25, 2025, debtor Varenza Miller filed a Chapter 7 bankruptcy
petition. The State of Wisconsin, Department of Workforce Development (DWD),
timely filed a complaint seeking a determination that Ms. Miller’s debt to the
DWD is not dischargeable under 11 U.S.C. §§ 523(a)(2)(A) and (a)(7). Ms. Miller
filed an answer to the complaint, addressing some, but not all, of the DWD’s
allegations.1 Discovery ensued, and the DWD subsequently moved for
summary judgment.2 For the reasons that follow, the Court will grant the
motion.
1 After Ms. Miller failed to file a timely answer the complaint, the DWD moved for default
judgment, to which Ms. Miller objected. The Court thereafter permitted Ms. Miller another
opportunity to answer the complaint. See ECF Nos. 5, 6, 13 & 16.
2 Because Ms. Miller is not represented by counsel, the DWD, at the Court’s instruction,
provided notice of her obligations to respond properly to its motion and the consequences of
failing to do so, including both the applicable text of Federal Rule of Civil Procedure 56 and a
plain English explanation of the summary judgment procedure. See Timms v. Frank, 953 F.2d
281, 285 (7th Cir. 1992); ECF Nos. 22 & 24.
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JURISDICTION
The Court has jurisdiction under 28 U.S.C. § 1334 and the Eastern
District of Wisconsin’s July 16, 1984, order of reference entered under 28
U.S.C. 157(a). Determining whether a debt is dischargeable is a core
proceeding under 28 U.S.C. § 157(b)(2)(I) and the Court may enter a final order.
FACTS
Based on the record, and for purposes of summary judgment, the Court
finds the following material facts to be undisputed or not subject to reasonable
dispute:
1. 	In 2022, Ms. Miller filed eight weekly unemployment benefit claims that
are at issue in this litigation: six claims for weeks 27 through 32 (the
weeks ending July 2 through August 6, 2022), and two claims for weeks
35 and 36 (the weeks ending August 27 through September 3, 2022)
(the “Working Weeks”). ECF No. 24-3, at 27–42 (Ex. E).
2. 	During the Working Weeks, Ms. Miller was employed by Super 8 Motel
(among others). On each unemployment benefit claim made in the
Working Weeks, Ms. Miller reported that she had worked for and earned
part-time wages from Super 8. Id.3
3. 	Also during the Working Weeks, Ms. Miller was employed by Nyholm &
Associates SC (“Nyholm”). On the unemployment benefit claims made in
weeks 27 through 32, Ms. Miller did not report any work or wages from
Nyholm. Ex. E. On the claims made in weeks 35 and 36, Ms. Miller
reported working 18 hours and earning wages of $199 from Nyholm. Id.
4. 	In August of 2022, the DWD began investigating Ms. Miller’s working
relationship with Nyholm, first mailing the employer a wage
verification/eligibility letter, and later a Weekly Earnings Audit report.
See ECF No. 24-3, at 51 (Ex. K); id. at 45–47 (Ex. G).
5. 	Nyholm’s response to the weekly audit report differed greatly from Ms.
Miller’s disclosure. For weeks 27 through 32—and contrary to her
certifications of performing no work—Nyholm reported that Ms. Miller
had performed more than 142 hours of work (ranging from 19 to 28
hours per week) and earned almost $1,700 in wages. Likewise, for
weeks 35 and 36, Nyholm’s response reflected hours and wages
3 Although her reporting of wages from Super 8 is not the basis for the DWD’s underlying
complaint, the DWD says that Ms. Miller’s reporting here was inaccurate and serves as further
evidence of her fraudulent intent in making other false representations.
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significantly exceeding those reported by Ms. Miller: almost 38 hours of
work (not 18), and earnings of $435.21 (not $199). Ex. G.
6. 	Ms. Miller does not deny working for Nyholm during the Working Weeks,
failing to report her work and wages for weeks 27 through 32 of 2022,
or grossly underreporting her work and wages for weeks 35 and 36 of
2022. See ECF No. 24-3, at 6–23 (Ex. C); Ex. E.4
7. 	Based on Ms. Miller’s inaccurate reporting of her Nyholm employment
and other information received during its investigation, the DWD
concluded that Ms. Miller had engaged in concealment (i.e., that Ms.
Miller “intentionally misle[]d the department by withholding or hiding
information or making a false statement or misrepresentation,” Wis.
Stat. § 108.04(11)(g)), and issued an administrative determination that
it had erroneously paid her unemployment insurance benefits to which
she was not entitled in the amount of $1,811.00. See ECF No. 24-3, at
53–61 (Ex. M); id. at 62 (Ex. N).
8. 	For the same reasons, the DWD assessed Ms. Miller a civil penalty of
$724.40 under Wis. Stat. § 108.04(11)(bh), and a future benefit amount
reduction (“BAR”) of $5,478.00 under Wis. Stat. §§ 108.04(11)(be) &
(bm). Ex. M.
9. 	The DWD also incurred collection costs of $71.94. See ECF No. 24-3, at
24–26 (Ex. D).
10. The initial determination concerning Ms. Miller’s overpayment and
concealment is now final. Ms. Miller has not repaid any of the
overpayment, civil penalty, or collection costs.5
SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(a); Fed. R. Bankr. P. 7056. A dispute is
4 The DWD sent Ms. Miller discovery requests, along with a cover letter directing her to answer
each request for admission “with an admit, deny, or objection in the blank space,” and stated
that the responses must be signed before a notary. See Ex. C. Ms. Miller’s responses were
incomplete and not notarized. More importantly, while she contested the DWD’s accounting of
her actual hours and wages for Super 8, she did not deny the same for Nyholm. Id.
5 Although Ms. Miller contended in her responses to the DWD’s interrogatories that she repaid
part of the penalty, see Ex. C, she appears to have confused the amounts withheld due to her
disqualification for future unemployment benefits (her “BAR forfeiture”) with repayments of the
existing overpayment and/or penalty debts. See id.
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“genuine” if the evidence is such that a reasonable jury could return a verdict
for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). To be “material,” a fact must be “outcome-determinative under
governing law.” Contreras v. City of Chicago, 119 F.3d 1286, 1291 (7th Cir.
1997).
The moving party bears the burden of establishing that summary
judgment is appropriate. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Once the movant has done so, the nonmoving party cannot withstand
summary judgment by merely resting on her pleadings but instead must
“present affirmative evidence in order to defeat” the motion. Anderson, 477 U.S.
at 257–58. If the non-moving party fails to properly address a movant’s
assertion of fact, the Court may consider the fact undisputed. Fed. R. Civ. P.
56(e)(2).
The DWD filed a properly supported motion for summary judgment. In
response, Ms. Miller did not contest any of the factual allegations or evidence
offered by the DWD; rather, she asked the Court to dismiss the complaint
solely for reasons of alleged financial hardship. ECF No. 25.
Although pro se litigants like Ms. Miller in certain instances may be
“entitled to benefit from various procedural protections not otherwise afforded
to the ordinary attorney-represented litigant,” Jones v. Phipps, 39 F.3d 158,
163 (7th Cir. 1994), such instances of “leniency” do not extend to the Federal
Rules of Civil Procedure. See id. In the context of summary judgment, a court
need not, even for an unrepresented party, “scour the record looking for factual
disputes,” and pro se litigants, like all litigants, cannot avoid summary
judgment without demonstrating a material dispute of fact. Greer v. Bd. of Ed.
of the City of Chicago, 267 F.3d 723, 727 (7th Cir. 2001).
ANALYSIS
Section 523(a)(2)(A) of the Bankruptcy Code excepts from discharge “any
debt . . . for money . . . obtained by . . . false pretenses, a false representation,
or actual fraud . . . .” 11 U.S.C. § 523(a)(2)(A). To succeed on its claim, the
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DWD must prove, by a preponderance of the evidence, that: “(1) the debtor
made a false representation or omission, (2) that the debtor (a) knew was false
or made with reckless disregard for the truth and (b) was made with the intent
to deceive, (3) upon which [the DWD] justifiably relied.” Ojeda v. Goldberg, 599
F.3d 712, 716–17 (7th Cir. 2010); see also Reeves v. Davis (In re Davis), 638
F.3d 549, 553 (7th Cir. 2011).
Here, the undisputed evidence establishes all required elements. A “false
representation” is an express misrepresentation or omission, which can be
spoken, written, or demonstrated through conduct, while “false pretenses”
include implied misrepresentations or conduct intended to create or foster a
false impression. See CQM, Inc. v. VandenBush (In re VandenBush), 614 B.R.
306, 315 (Bankr. E.D. Wis. 2020). In this case, Ms. Miller made at least eight
separate false certifications by either failing to report, or underreporting, her
hours and wages from Nyholm during the Working Weeks. She has not denied
that these certifications were false, nor that she made them knowingly.
As for intent to deceive, “[d]etermining whether a debtor had the requisite
intent under § 523(a)(2)(A) is . . . a factual, subjective inquiry decided by
examining all of the relevant circumstances,” and “a court may [] rely on a
pattern of representations to infer intent.” 6050 Grant, LLC v. Hanson (In re
Hanson), 437 B.R. 322, 328 (Bankr. N.D. Ill. 2010). Based on Ms. Miller’s
course of conduct—including the significant amount and repeated instances of
her reporting discrepancies—the Court concludes that Ms. Miller intended to
deceive the DWD in falsely certifying her work and wages from Nyholm.
Compare Ohio Dep’t of Job & Family Servs. v. Yuppa (In re Yuppa), No. 12-
31619, 2013 WL 4854479, at *4 (Bankr. S.D. Ohio June 12, 2013) (finding
fraudulent intent on summary judgment when the debtor filed “not one, but
ten false certifications” of her employment status during the weeks at issue).
Finally, the DWD justifiably relied on Ms. Miller’s false representations.
The statutory scheme surrounding Wisconsin’s unemployment compensation
program requires the DWD to rely on the reporting of its claimants, who bear
the burden of proving eligibility. “[T]he majority of courts that have considered
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the issue have held that it is justifiable for state agencies to rely on
representations made in a claimant’s initial application and his or her weekly
certifications when determining the claimant’s eligibility for benefits.” Michigan
Unemployment Insurance Agency v. Heinisch (In re Heinisch), 600 B.R. 393,
403–04 (Bankr. W.D. Mich. 2019) (citing, inter alia, Yuppa, 2013 WL 4854479
at *4, and Kansas v. Oliver (In re Oliver), 554 B.R. 493, 501-02 (Bankr. D. Kan.
2016)). Ms. Miller’s misrepresentations caused the DWD to pay her $1,811 in
benefits to which she was not entitled (and led to additional penalties and
collection costs,6 which Ms. Miller has not refuted).
CONCLUSION
For all these reasons, the Court concludes that the DWD has met its
burden of proving that Ms. Miller obtained unemployment benefit
overpayments through fraudulent misrepresentations on which the DWD
justifiably relied to its detriment. The resulting debt for $1,811 attributable to
benefit overpayments, $71.94 in pre-petition collection costs, plus the $350.00
filing fee in this proceeding, for a total of $ 2,232.94, is not dischargeable
under 11 U.S.C. § 523(a)(2)(A), while the unpaid civil penalty balance of
$724.40 is not dischargeable under 11 U.S.C. § 523(a)(7).
The Court will issue a separate order for judgment consistent with this
decision.
Dated: May 15, 2026
6 See Wis. Stat. §§ 108.04(11)(bh) & 108.22(11)(a); 11 U.S.C. § 523(a)(7) (excepting from
discharge any debt for a “fine, penalty, or forfeiture payable to or for the benefit of a
governmental unit, [that is] not compensation for actual pecuniary loss,” other than certain tax
penalties); Cohen v. de la Cruz, 523 U.S. 213, 223 (1998) (section 523(a)(2)(A) “encompasses
any liability arising from money, property, etc., that is fraudulently obtained, including treble
damages, attorney’s fees, and other relief that may exceed the value obtained by the debtor”).
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