Gary O Cerny and Barbara M Cerny

UNITED STATES BANKRUPTCY COURT
WESTERN DISTRICT OF WISCONSIN
In re:
Case Number: 24-10322-13
GARY O. CERNY and
BARBARA M. CERNY,
Debtors.
GARY O. CERNY and
BARBARA M. CERNY,
Plaintiffs, 	Adversary Number: 24-00061
v.
OLD NATIONAL BANK,
JUDGE JEFFREY S. KUGLITSCH, and
ECKBERG LAMMERS, P.C.
Defendants.
DECISION AND ORDER
Gary and Barbara Cerny filed a letter with the Court requesting that the
Court reconsider a decision by the Court. The letter referred to the main case.
But the body of the letter asks this Court to vacate its decision and reopen an
adversary proceeding against Old National Bank, Judge Jeffrey S. Kuglitsch,
and the law firm Eckberg Lammers, P.C.
The Court will consider this a motion for relief under Rule 60. In other
words, as a motion for relief from a judgment. For the reasons below, the Court
denies the motion.
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BACKGROUND
Gary and Barbara Cerny filed their third bankruptcy case in February
2024. It was filed as a Chapter 13. At the center of each bankruptcy case and
the adversary proceeding is a mortgage debt and state court foreclosure action
related to the Cernys’ home.
The Debtors dispute that Old National Bank (“Old National”) owns the
note and mortgage. Based on this theory, they alleged multiple causes of action
seeking to have the state court judgment of foreclosure vacated and to award
them damages. Litigation related to foreclosure has continued over more than
10 years.
The original loan was made by AnchorBank, fsb (“Anchor”). Anchor
merged with Old National in 2016. The Cernys signed an agreement with Old
National in 2018 to reinstate the mortgage and stop a foreclosure. There was a
default on that agreement, and a foreclosure action was again filed. The state
court found Old National was the holder of and entitled to enforce the note and
mortgage. And that Old National was the successor-by-merger to AnchorBank,
fsb. Finally, there was a default under the note and mortgage, and Old National
was entitled to a judgment of foreclosure.
No appeal of the state court decision was taken. The state redemption
period expired. Then the Cernys filed this current bankruptcy. While
represented in the main case by counsel, they filed a pro se adversary
proceeding against Old National, its attorneys, and Judge Kuglitsch.
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The adversary proceeding contained 14 causes of action. A declaratory
judgment that the state court decision was null and void was requested.
Additionally, this Court was asked to find the note and mortgage were not
owned by Old National.
This Court issued a decision and entered an order dismissing the
adversary proceeding. Dissatisfied and disagreeing with that decision, the
Cernys filed a motion for reconsideration. The motion did not identify any
newly discovered evidence, any mistake, inadvertence or surprise other than
their disagreement with the facts that had been found in the state court, or
excusable neglect. Neither was there evidence of fraud or that the state court
judgment was void or otherwise satisfied.
In both the original decision to dismiss the adversary proceeding, and in
the decision to deny reconsideration, the Court carefully laid out the federal
rules and case law governing its decision. The same arguments about the
owner and holder of the note and mortgage were litigated in the state court.
Motions to dismiss the adversary proceeding were filed. There were
objections to the motions by the Cernys. Briefs were submitted by all the
parties, including the Cernys.
On March 21, 2025, the Court issued its decision on the Motions to
Dismiss and an Order dismissing the case (Dkt. Nos. 36 and 37)1 . On April 30,
1 Unless otherwise specified, all references to the Docket refer to the Docket in the
adversary proceeding, Adv. Case No. 24-61.
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2025, the Cernys filed a letter seeking reconsideration of that decision and
order. That request was opposed by all defendants.
There followed a motion to amend the complaint seeking to add a
defendant. The Court denied that motion (Dkt. No. 57).
On June 26, 2025, the Cernys filed a Notice of Appeal with a Statement
of Issues on Appeal (Dkt. No. 58).
After reviewing the Motion to Reconsider and other filings by the Cernys,
the Court issued a decision denying the request (Dkt. No. 61). That same day,
Notice of Docketing of the Appeal was entered (Dkt. No. 62). The record was
transmitted to the District Court (Dkt. No. 71).
On January 23, 2026, the District Court issued its Opinion and Order,
and Judgment in a Civil Case (Dkt. No. 76). The District Court affirmed the
decision of the Bankruptcy Court and dismissed the appeal. Judgment in favor
of the defendant-appellees was entered in the appeal.
DISCUSSION
Time and again this Court has explained to the Cernys the Rooker-
Feldman doctrine. Under that doctrine, this Court is barred from acting in what
is an attempt to appeal and reverse a state court judgment.
And the Full Faith and Credit Act, 28 U.S.C. § 1738, compels this Court
to accord a state court judgment the same preclusive effect it would be given by
the rendering state court.
The Cernys believe the state court was in error when it made the finding
that Old National Bank was the owner and holder of the note and mortgage
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and entitled to foreclose. No matter how often they repeat their belief they have
not seen proof of those findings, this is not a court that can or should vacate
the state court judgment. There is no basis under Rule 60 to reconsider and
vacate the decision and prior order dismissing the adversary proceeding.
More to the point, this Court lacks jurisdiction to rule on the current
motion to vacate its prior decision. This Court entered a final order dismissing
the adversary proceeding. That order was appealed.
It is a fundamental principle of federal civil procedure that the filing of a
notice of appeal from the final judgment of a trial court divests the trial court of
jurisdiction and confers jurisdiction on the appellate court. Levey v. Systems
Div., Inc. (In re Teknek, LLC), 563 F.3d 639, 650 (7th Cir. 2009); Transtexas Gas
Corp., 303 F.3d 571, 578-79 (5th Cir. 2002) (citing Griggs v. Provident
Consumer Co., 459 U.S. 56, 58 (1982)). The purpose of the rule is to avoid the
confusion of placing the same matter before two courts at the same time and to
preserve the integrity of the appellate process. Teknek, 563 F.3d at 650.
This rule applies equally to bankruptcy courts and cases. Transtexas,
303 F.3d at 579. As a result, while an appeal is pending—with few exceptions
not applicable in this case—the bankruptcy court cannot exercise control over
“those aspects of the case involved in the appeal.” Griggs, 459 U.S. at 58.
The issues that were addressed in this Court’s decision and order were
the same as those presented in the appeal. And they are identical to the issue
asserted in the current motion by the Cernys. The adversary asked this Court
to conclude the state court was wrong and to vacate the state court order.
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The Court dismissed the complaint. The Cernys requested
reconsideration of that decision, and it was denied. They then appealed the
decision. The District Court dismissed the appeal and affirmed this Court’s
decision. At bottom, they ask this Court to enter an order that would modify,
and be inconsistent with, the judgment of the District Court.
This Court lacks jurisdiction to vacate its prior judgment and decision. It
is bound by the Order and Judgment of the District Court.
C ONCLUSION
The motion to vacate is denied. This decision constitutes findings of fact
and conclusions of law under Bankruptcy Rule 7052 and Rule 52 of the
Federal Rules of Civil Procedure. It is also the judgment and order of this Court
that the motion is denied.
Dated: January 28, 2026
BY THE COURT:
_________________________________________
Hon. Catherine J. Furay
U.S. Bankruptcy Judge
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