Court Opinion

ID: 2708858
Source: CourtListenerOpinion
Date Created: 2014-08-05 15:07:21.234289+00
Date Added: 2024-06-11T09:14:35.027951
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit

No. 12-3689

IN RE : ARCHDIOCESE OF MILWAUKEE ,
                                                   Debtor-Appellee,

                                v.

APPEAL OF: JOHN DOE , Claimant A-49,
                                                          Appellant.

           Appeal from the United States District Court
              for the Eastern District of Wisconsin.
            No. 12-C-292 — Rudolph T. Randa, Judge.

    ARGUED APRIL 17, 2013 — DECIDED FEBRUARY 25, 2014

   Before WOOD , Chief Judge, and EASTERBROOK and SYKES,
Circuit Judges.
    SYKES, Circuit Judge. This appeal challenges the disallow-
ance of a claim in the ongoing Chapter 11 bankruptcy reorgani-
zation of the Archdiocese of Milwaukee. John Doe
Claimant A-49 alleges that Father David Hanser, a former
pastor at St. John Vianney Catholic Parish in Brookfield,
2                                                            No. 12-3689

Wisconsin, sexually abused him in the late 1970s when he was
seven years old.1 In 2007 the claimant participated in a volun-
tary mediation program conducted by the Archdiocese to
address claims of sexual abuse by priests. The mediation
produced a settlement; the Archdiocese paid the claimant
$100,000, and he signed an agreement releasing the Archdio-
cese from all claims relating to abuse by Father Hanser.
    When the Archdiocese filed its Chapter 11 petition four
years later, however, Claimant A-49 submitted a claim based
on the same allegations of abuse by Father Hanser. The
Archdiocese moved to disallow it based on the release. In
response the claimant asserted that an Archdiocesan represen-
tative had fraudulently induced him to settle by giving him
misleading information about when the Archdiocese first
received reports of abuse by Father Hanser. The bankruptcy
judge refused to set aside the agreement because the claimant
had not shown that but for the alleged misrepresentations, he
would not have accepted the settlement. The judge enforced
the release and entered summary judgment disallowing the
claim. The district court affirmed.
   We likewise affirm, although on a somewhat different
analysis. The courts below misstated the elements of a claim for
rescission based on fraudulent inducement under Wisconsin
law. To be fair, the Wisconsin Supreme Court has never
addressed the precise question presented here, but its

1
 The bankruptcy judge overseeing the Chapter 11 issued a standing order
that claimants alleging clergy abuse may be publicly identified by number
rather than name to protect their confidentiality. The parties have followed
that practice, and we will as well.
No. 12-3689                                                      3

approach to the remedy of rescission has long followed the
Restatement (Second) of Contracts, and under that framework the
lower courts reached the right result. Claimant A-49 failed to
show that the alleged misrepresentations were a substantial
factor in his decision to accept the settlement. The claimant’s
lawyer argues that the bankruptcy judge wrongly refused his
request to supplement the record with oral testimony or a
second affidavit from his client. We find no abuse of discretion.
Counsel never made an offer of proof explaining what the
expanded record would show, nor has he told us what his
client would say in these additional forms of proof.

                         I. Background
    We recount the factual background from the record before
the bankruptcy court on the summary-judgment motion,
construing the facts and drawing inferences in favor of the
claimant. In re United Air Lines, Inc., 438 F.3d 720, 727 (7th Cir.
2006). Claimant A-49 alleges that Father Hanser sexually
abused him in 1977 or 1978, when he was seven years old. At
the time, Father Hanser was the pastor of St. John Vianney
Parish in the Milwaukee Archdiocese. In 2007 the Archdiocese
conducted a voluntary mediation program to address claims
of sexual abuse by its priests. Claimant A-49 participated in
this program. Barbara Anne Cusack represented the Archdio-
cese in the mediation.
    During the course of his mediation session, Claimant A-49
asked Cusack when the Archdiocese first received a complaint
of sexual abuse by Father Hanser. She replied that the first
report arose in the mid- to late-1980s. Claimant A-49 then
4                                                     No. 12-3689

asked her whether the Archdiocese had received reports from
other victims of abuse by Father Hanser while he served at
St. John Vianney. Cusack said there were none.
    At the conclusion of the mediation, the parties reached an
agreement to settle the claim. The Archdiocese agreed to pay
the claimant $100,000 and to cover certain expenses for
counseling and other services. In return the claimant released
the Archdiocese from all claims relating to abuse by Father
Hanser. The release provision in the settlement agreement
states as follows:
          In return for the payments set out above, and
      for the mutual promises contained herein, [Doe]
      releases and forever discharges the Archdiocese,
      and all of the Archdiocese’s employees, agents,
      officers, directors, affiliates, insurers and assigns,
      including, without limitation, all members of the
      Roman Catholic clergy, and all parishes and
      schools and any person or entity affiliated with
      the Archdiocese of Milwaukee from, and cove-
      nants not to sue them for, all claims, causes of
      action, charges, and demands, whether in tort,
      contract, or otherwise, of any nature that he may
      have had at any time up to and including the
      date of signing of this Agreement, including,
      without limitation, any claim of any nature
      arising from the assault, injury, whether physical
      or mental, or any other activity by Hanser.
Claimant A-49 and Cusack signed the agreement on January 10
and 12, 2007, respectively.
No. 12-3689                                                                5

    Four years later, in January 2011, the Archdiocese filed for
Chapter 11 bankruptcy due to mounting claims of clergy
sexual abuse. During the reorganization proceedings, informa-
tion came to light showing that the Archdiocese was in
possession of allegations that Father Hanser sexually abused a
child in the 1970s and sexually abused other children while he
was assigned to St. John Vianney. These disclosures contra-
dicted the information Cusack provided during the mediation
session.
   Although he had settled his claim and released the Archdi-
ocese from further liability, Claimant A-49 filed a claim in the
bankruptcy seeking recovery for the abuse by Father Hanser.
The Archdiocese objected and moved to disallow the claim
based on the release. See 11 U.S.C. § 502(b)(1) (providing that
a claim may be disallowed if “such claim is unenforceable
against the debtor … under any agreement or applicable
law”).2
    Claimant A-49 responded that the Archdiocese had
fraudulently induced him to settle and sought to void the
settlement agreement. He submitted an affidavit recounting
the statements Cusack made during the mediation session in
response to the questions he raised about the Archdiocese’s
knowledge of prior incidents of abuse by Father Hanser. In the
affidavit he attested that “[b]oth of [Cusack’s] answers were
very important to me.” He also said that at the time of the

2
 The Archdiocese also asserted that the claim was barred by the applicable
statutes of limitations, but the bankruptcy court had no need to address that
argument and neither do we.
6                                                  No. 12-3689

mediation, he was a practicing, faithful Catholic and “believed
that the Archdiocese and the people associated with the
Archdiocese had my best interests at heart.” Finally, he said
that he “believed that Barbara Cusack was telling the truth
during [the] mediation when I asked her about Hanser’s
history and other abuse at St. John Vianney.”
    The bankruptcy judge held a hearing and closely ques-
tioned counsel about the claim of fraudulent inducement.
Because the claimant sought to rescind the settlement agree-
ment, the judge inquired whether he would have to return the
$100,000 payment in order to proceed with his claim in the
Chapter 11. But most of the judge’s attention was focused on
whether the claimant had actually relied on the alleged
misrepresentations in deciding whether to settle. In his
affidavit Claimant A-49 never asserted that but for Cusack’s
statements, he would not have accepted the offer of settlement.
Rather, he said only that Cusack’s statements were “very
important” to him. The judge thought that was not enough.
    Responding to the court’s inquiry, counsel for
Claimant A-49 asked to present oral testimony or a second
affidavit from his client. But he did not make an offer of proof
about what his client would say, and the judge declined to
allow supplementation of the record. At the end of the hearing,
the judge delivered an oral ruling finding insufficient evidence
of reliance and disallowing the claim based on the release
language in the settlement agreement, which she found valid
and enforceable.
   The judge followed up with a written decision detailing her
reasons for disallowing the claim. She explained that the
No. 12-3689                                                        7

fraudulent-inducement claim required evidence that
Claimant A-49 had relied on Cusack’s representations to his
detriment, but in his affidavit he never “state[d] that he relied
on [Cusack’s] statements in deciding to settle with the Debtor,”
and “[n]ot once does he allege that if he knew the statements
were not true, he would not have entered into the Settlement
Agreement.” Instead, the claimant said only that he believed
Cusack and that her statements were “very important” to him.
That was insufficient evidence of reliance, the judge held. So
the fraudulent-inducement claim failed for lack of proof of an
essential element, and the judge granted summary judgment
disallowing the claim.
    The district court affirmed the bankruptcy judge’s decision.
The court agreed that the claimant “needed to produce specific
evidence of detrimental reliance” and failed to do so. The court
also held that the bankruptcy judge did not abuse her discre-
tion in denying the request to supplement the record with oral
testimony or a second affidavit. Claimant A-49 appealed.

                          II. Discussion
    Summary-judgment proceedings in bankruptcy court are
governed by Rule 56 of the Federal Rules of Civil Procedure.
See FED . R. BANKR. P. 7056; FED . R. BANKR. P. 9014(c); Dick ex rel.
Amended Hilbert Residence Maint. Trust v. Conseco, Inc., 458 F.3d
573, 577 (7th Cir. 2006). Summary judgment is appropriate
when there is no genuine dispute of material fact and the
moving party is entitled to judgment as a matter of law. FED .
R. CIV . P. 56; Dick, 458 F.3d at 577. The substantive legal rules
applicable to the claim are provided by state law. See Travelers
8                                                            No. 12-3689

Cas. & Sur. Co. of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443,
450–51 (2007); In re Lothian Oil Inc., 650 F.3d 539, 543 (5th Cir.
2011); In re G.I. Indus., Inc., 204 F.3d 1276, 1281 (9th Cir. 2000).
The parties agree that Wisconsin law applies. Our review is de
novo. Dick, 458 F.3d at 577.
    In Wisconsin, as elsewhere, a release is a contract. See Peiffer
v. Allstate Ins. Co., 187 N.W.2d 182, 185 (Wis. 1971). A contract
induced by fraud is voidable at the option of the party whose
assent was fraudulently induced. See Tietsworth v. Harley-
Davidson, Inc., 677 N.W.2d 233, 244 (Wis. 2004); Bank of Sun
Prairie v. Esser, 456 N.W.2d 585, 588 (Wis. 1990). For claims of
rescission based on fraud in the inducement, the Wisconsin
Supreme Court follows the rule set forth in the Restatement
(Second) of Contracts: “If a party’s manifestation of assent is
induced by either a fraudulent or a material misrepresentation
by the other party upon which the recipient is justified in
relying, the contract is voidable by the recipient.” RESTATE -
MENT (SECOND ) OF CONTRACTS § 164(1) (1981) [hereinafter
RESTATEMENT ]; see First Nat’l Bank & Trust Co. of Racine v. Notte,
293 N.W.2d 530, 538 (Wis. 1980) (adopting this formulation as
it appeared in a tentative draft of the Restatement (Second)).3

3
 The state supreme court has not always spoken with perfect clarity on the
subject. For example, in Merten v. Nathan, 321 N.W.2d 173 (Wis. 1982), the
court framed the elements of fraudulent inducement of a contract as
follows:

        The elements of fraudulent misrepresentation rendering a
        contract voidable are: (1) there must be a statement of fact
        which is untrue; (2) the false statement must be made with
                                                              (continued...)
No. 12-3689                                                                  9

    In Notte the state high court also adopted the Restatement’s
standards and definitions for several elements of the
claim—notably, its definitions of “misrepresentation,”
“fraudulent misrepresentation,” and “material misrepresenta-
tion.” See Notte, 293 N.W.2d at 538 & n.7. A party seeking to
rescind a contract based on fraudulent inducement must prove
the claim by clear and convincing evidence, the same burden
that applies to fraud claims sounding in tort. See Daniel J.
Hartwig Assocs. v. Kanner, 913 F.2d 1213, 1221–22 (7th Cir. 1990)
(applying Wisconsin law).
    At issue here is the reliance element of the claim. To rescind
a contract based on a fraudulent or material misrepresentation
made during contract formation, the recipient must have
justifiably relied on the misrepresentation in deciding to enter
into the contract. See Notte, 293 N.W.2d at 538; RESTATEMENT
§ 164(1). The reliance inquiry thus involves two subsidiary
questions: (1) Did the party actually rely on the
misrepresentation? (2) If so, was the reliance justifiable?

3
    (...continued)
            intent to defraud and for the purpose of inducing the other
            party to act upon it; and (3) the other party must rely on
            the false statement and must be induced thereby to act to
            his injury or damage.

Id. at 176 n.2. This formulation suggests that the contract remedy for fraud
in the inducement requires tort-like intent to defraud. But later the court
explained that honest misrepresentations can support a claim of rescission,
citing Notte and the Restatement. Id. Nothing in this brief discussion suggests
the court was departing from its prior reliance on the Restatement (Second)
of Contracts. Notte, which adopted the Restatement’s formulation of the claim,
remains the law in Wisconsin.
10                                                   No. 12-3689

7 JOSEPH M. PERILLO , CORBIN    ON   CONTRACTS § 28.15 (rev. ed.
2002).
    Special standards govern when reliance is justifiable, see
RESTATEMENT §§ 169–172, and Wisconsin courts regularly
address whether a party’s reliance was justified in specific
circumstances, see, e.g., Notte, 293 N.W.2d at 539; Caulfield v.
Caulfield, 515 N.W.2d 278, 282–83 (Wis. Ct. App. 1994); Ritchie
v. Clappier, 326 N.W.2d 131, 134–35 (Wis. Ct. App. 1982). Here,
however, the dispute is about actual reliance; in other words,
the issue for us is whether the alleged misrepresentations
actually induced Claimant A-49 to manifest his assent to the
settlement.
    The Wisconsin Supreme Court has not addressed the
standard that governs this aspect of a fraudulent-inducement
claim. That’s not unusual. As we’ve just noted, most disputes
over reliance center on whether one party’s reliance on a
counterparty’s misrepresentation during contract formation
was justified. See Joseph M. Perillo, The Origins of the Objective
Theory of Contract Formation and Interpretation, 69 FORDHAM L.
REV . 427, 473–74 (2000) (“Misrepresentation cases generally do
not discuss the reliance factor. The focus of most of the cases is
on the nature of the deception and the justification for any
reliance.”). In the absence of Wisconsin caselaw specifically
addressing the actual-reliance question, our task is to predict
how the Wisconsin Supreme Court would decide it. See Intec
USA, LLC v. Engle, 467 F.3d 1038, 1040 (7th Cir. 2006); Zapata
Hermanos Sucesores, S.A. v. Hearthside Baking Co., 313 F.3d 385,
390 (7th Cir. 2002) (“[T]he Erie doctrine applies to any case in
which state law supplies the rule of decision … .”).
No. 12-3689                                                    11

   The predictive inquiry is fairly straightforward here. For all
other elements of the fraudulent-inducement claim, the state
supreme court has followed the standards and definitions in
the Restatement (Second) of Contracts. The Restatement contains
a standard for evaluating the element of actual reliance,
framing it as a question of causation:
       § 167 When A Misrepresentation Is An Inducing
             Cause
       A misrepresentation induces a party’s manifesta-
       tion of assent if it substantially contributes to his
       decision to manifest his assent.
RESTATEMENT § 167 (emphasis added). The commentary
explains that in this context “but for,” “sole,” or even
“predominant” causation is not required: “It is not necessary
that this reliance have been the sole or even the predominant
factor in influencing [the party’s] conduct,” nor is it “necessary
that he would not have acted as he did had he not relied on the
assertion.” Id. cmt. a. Rather, it is enough that reliance on the
misrepresentation “substantially contributed to his decision to
make the contract.”
    The commentary also explains that “[t]he materiality of the
misrepresentation is a particularly significant factor in [the]
determination [of actual reliance]. It is assumed, in the absence
of facts showing the contrary, that the recipient attached
importance to the truth of a misrepresentation if it was
material, but not if it was immaterial.” Id. cmt. b. Leading
contract treatises are in accord, see 1 E. ALLAN FARNSWORTH ,
FARNSWORTH ON CONTRACTS § 4.13 (3d ed. 2004); 27 RICHARD
A. LORD , A TREATISE ON THE LAW OF CONTRACTS § 69:32 (4th ed.
12                                                              No. 12-3689

2003); 7 PERILLO , supra, § 28.15, although one recognizes that
there is some “authority for the view that the test of whether
a party relied on [an]other party’s misrepresentation is
generally whether he would have acted in the absence of the
representation,” 27 LORD , supra, § 69:32.
    We can safely predict that the Wisconsin Supreme Court
would adopt the Restatement’s framework for evaluating actual
reliance.4 Nothing suggests that the court would suddenly
depart from its established practice of looking to the Restate-
ment to develop the elements of the rescission remedy for
contracts induced by fraudulent or material misrepresentation.
   The courts below, however, applied a different standard to
evaluate reliance. Both judges rejected the rescission claim
because Claimant A-49 failed to show that but for Cusack’s
representations, he would not have entered into the settlement
agreement. That’s too strict a standard. Still, the claim fails
under the more generous standard of the Restatement.
    Applying that standard here, we ask first whether the
alleged misrepresentations were material. There are two
aspects of materiality in this context, one objective and one
subjective. Notte, 293 N.W.2d at 538. A misrepresentation is
objectively material “if it is likely to induce a reasonable person
to manifest his assent.” Id. A misrepresentation is subjectively

4
  A similar standard applies in tort claims of misrepresentation. See, e.g.,
First Nat’l Bank in Oshkosh v. Scieszinski, 131 N.W.2d 308, 311 (Wis. 1964);
Household Fin. Corp. v. Christian, 98 N.W.2d 390, 393 (Wis. 1959); Darlington
v. J.L. Gates Land Co., 138 N.W. 72, 74 (Wis. 1912); see also W IS . J U RY
I N STRUC TIO N S –C IV IL 2401 (2011) (M isrepresentation: Intentional Deceit).
No. 12-3689                                                   13

material if “the maker knows that it is likely that the recipient
will be induced to manifest his assent by the misrepresenta-
tion.” Id. The normal order of battle puts the objective inquiry
before the subjective. Notte explains:
       The trier of fact must determine whether a
       reasonable person would be likely to assent to
       the contract on the basis of the misrepresenta-
       tion. Second[], even when under the
       reasonable[-]person standard the misrepresenta-
       tion would not have been material, it is possible
       that there were personal considerations which
       would induce the recipient to enter the contract.
       If the party making the misrepresentation knows
       of these special circumstances, the misrepresen-
       tation may be material even though it would not
       be expected to induce a reasonable person to
       enter the proposed contract.
Id.
    Claimant A-49 has not developed an argument that
Cusack’s misrepresentations were objectively material. Instead,
his argument relies entirely on his assertion that Cusack’s
answers to his questions about other reports of abuse by Father
Hanser were “very important” to him emotionally, and that he
believed her and thought the Archdiocese had his “best
interests at heart … during the mediation.” These generalized
assertions about the emotional stakes of the mediation do not
establish the kind of “special circumstances” that could
support a conclusion that Cusack’s misrepresentations were a
14                                                  No. 12-3689

substantial factor in Claimant A-49’s decision to accept the
settlement.
    We acknowledge that we are not confronted with ordinary
contract negotiations here; the context is far more sensitive. We
do not doubt that the mediation was extraordinarily difficult
and emotionally wrenching for the claimant and that the
atmosphere was one of trust rather than an arm’s-length
financial negotiation. We also accept, as we must, that Cusack’s
answers to the claimant’s questions about other victims of
abuse by Father Hanser were important to him as a subjective
matter. But that’s not enough by itself to show that Cusack’s
answers were a substantial factor in his decision to accept the
settlement. When pressed on this point at oral argument,
counsel for Claimant A-49 simply reiterated that Cusack’s
responses were important to his client emotionally; he never
explained how they actually factored into his decision to accept
the offer of settlement from the Archdiocese.
    Although the claimant’s counsel did not mention it, the
Archdiocese’s prior knowledge of abuse by Father Hanser may
have loomed larger had the mediation occurred seven months
later. In July 2007 the Wisconsin Supreme Court resolved
unsettled timeliness questions for two legal theories under
which the Archdiocese might be liable for abuse by its priests:
negligent supervision and fraud. The court held that for
negligent-supervision claims, the statute of limitations com-
mences at the time of the last episode of sexual abuse. See John
Doe 1 v. Archdiocese of Milwaukee, 734 N.W.2d 827, 834–39 (Wis.
2007). This ruling largely foreclosed the negligent-supervision
theory for clergy-abuse claims against the Archdiocese; under
No. 12-3689                                                   15

this accrual rule, many if not most claims are time-barred. But
the court also held in Doe 1 that fraud claims “based on the
Archdiocese’s alleged knowledge of the priests’ prior sexual
molestation of children” stated a cognizable theory of relief
and could proceed. Id. at 846. The court applied the discovery
rule to extend the limitations period for fraud claims stemming
from clergy abuse, holding that “the date of the accrual … is
when the plaintiffs discovered or, in the exercise of reasonable
diligence, should have discovered that the Archdiocese’s
alleged fraud was a cause of their injuries.” Id. at 846–47
(internal quotation marks omitted).
    At the time of Claimant A-49’s mediation, however,
Wisconsin’s statute-of-limitations jurisprudence was decidedly
against him. The court of appeals had held in Doe 1 that
negligent-supervision and fraud claims accrue on the date of
the last occurrence of sexual abuse. See Doe 1 v. Archdiocese of
Milwaukee, No. 2005AP1945, 2006 WL 2472821, ¶¶ 13-15 (Wis.
Ct. App. Aug. 29, 2006), aff’d in part, rev’d in part, 734 N.W.2d
827 (Wis. 2007). Although the state supreme court later
reversed this accrual rule for fraud claims, at the time of
Claimant A-49’s mediation, he was faced with a stark choice:
(1) accept the $100,000 settlement offer; or (2) take his chances
that Doe 1 would be reversed and then attempt to mount his
own claim for fraud, with all the attendant risks and uncertain-
ties of litigation.
   Counsel for the claimant has not explained how, when
considered in this light, Cusack’s answers to his client’s
questions about other victims of Father Hanser’s abuse
substantially affected his decision to accept the offer of
16                                                            No. 12-3689

settlement. Indeed, all the inferences run against his position.
Whether the Archdiocese had prior knowledge of other victims
of Father Hanser’s abuse would be potentially important to a
future fraud claim if the Wisconsin Supreme Court reversed
the court of appeals in Doe 1 and if the claimant could over-
come the statute of limitations and if all the other factual and
legal predicates for a successful fraud claim were present. In
other words, at the time of the mediation, the viability of any
future fraud claim was highly contingent and quite uncertain;
the settlement offer, on the other hand, was definite and
favorable to the claimant.
   The claimant’s counsel insists that he could have bolstered
the record of his client’s reliance but the bankruptcy judge
wrongly precluded him from presenting oral testimony or a
supplemental affidavit. This argument fails for several
reasons.5 First, trial courts have considerable discretion in
managing the course of litigation, see Keeton v. Morningstar, Inc.,
667 F.3d 877, 884 (7th Cir. 2012); FEC v. Al Salvi for Senate
Comm., 205 F.3d 1015, 1018 (7th Cir. 2000), and this is no less
true in the context of summary-judgment motions. When a

5
  Embedded in this argument is a procedural objection: Claimant A-49
complains that the Archdiocese failed to address the reliance issue until its
reply brief. But the Archdiocese was not required to anticipate the
fraudulent-inducement argument, which did not com e into play until
Claimant A-49 raised it in his brief in opposition to summ ary judgment.
The Archdiocese replied that there was no evidence showing reliance, as
necessary for fraud in the inducement. That was the proper order of events.
No. 12-3689                                                              17

party fails to support a factual assertion in connection with a
motion for summary judgment, the court can
        (1) give an opportunity to properly support or
        address the fact; (2) consider the fact undisputed
        for purposes of the motion; (3) grant summary
        judgment if the motion and supporting
        materials—including the facts considered
        undisputed—show that the movant is entitled to
        it; or (4) issue any other appropriate order.
FED . R. CIV . P. 56(e).
    Although Rule 56 is silent about oral testimony, it plainly
contemplates the use of affidavits and documentary evidence.
See Seamons v. Snow, 206 F.3d 1021, 1025 (10th Cir. 2000); see also
Stewart v. RCA Corp., 790 F.2d 624, 628 (7th Cir. 1986)
(“Rule 56(c) suggests that the decision should be made on
affidavits and documentary evidence … .”). More generally,
Rule 43 provides that “[w]hen a motion relies on facts outside
the record, the court may hear the matter on affidavits or may
hear it wholly or partly on oral testimony or on depositions.”
FED . R. CIV . P. 43(c). Based on the predecessor to Rule 43(c), we
have held that although the court has the discretion to receive
oral testimony in connection with a motion for summary
judgment under Rule 56, oral testimony “should be rare.”
Stewart, 790 F.2d at 629.6 The use of “oral testimony at the

6
  Our decision in Stewart v. RCA Corp., 790 F.2d 624 (7th Cir. 1986), was
based on Rule 43(e), which stated as follows: “W hen a motion is based on
facts not appearing of record[,] the court may hear the matter on affidavits
                                                              (continued...)
18                                                            No. 12-3689

summary judgment stage creates a strong temptation for a
judge to assess the witness’[s] credibility,” an impermissible
role for a judge ruling on a summary-judgment motion.
Seamons, 206 F.3d at 1026.
    Beyond the general point that oral testimony is discouraged
at the summary-judgment stage, here the request to present
oral testimony or a supplemental affidavit was unaccompanied
by an offer of proof. The bankruptcy judge was not told what
Claimant A-49 would say to amplify his earlier affidavit. Under
these circumstances the judge can hardly be faulted for
declining to allow an expansion of the record. Even now, the
substance of the proposed additional testimony remains a
mystery. The claimant’s counsel has not shed any light on what
the supplemental proofs would show if we reversed and
remanded to permit further development of the record. The
bankruptcy judge was well within her discretion to proceed to
decision without reopening the factual record.
   For these reasons, the fraudulent-inducement claim fails,
the settlement agreement is binding and enforceable, and the
bankruptcy court properly disallowed the claim.
                                                                AFFIRMED .

6
 (...continued)
presented by the respective parties, but the court may direct that the matter
be heard wholly or partly on oral testimony or depositions.” F ED . R. C IV .
P. 43(e) (1982). This formulation was amended as part of the 2007 amend-
ments to the Federal Rules of Civil Procedure. The amendment was stylistic
only. See F ED . R. C IV . P. 43 advisory committee’s note.