11 U.S.C. § 523

Section 523(a)(4) requires an express or technical trust relationship for a debtor to have acted in a fiduciary capacity.

Schieber v. Hooper (In Re Hooper) · filed 1990-04-10(a)(4)

If state law creates an express or technical trust relationship between the debtor and another party and imposes trustee status upon the debtor, the debtor will be a fiduciary within section 523(a)(4).

Section 523(a)(4) limits fiduciary capacity to relationships arising from a pre-existing express or technical trust, rather than a trust implied from a contract.

Hardesty v. Goseland (In Re Goseland) · filed 1990-04-11(a)(4)

As a result, the courts have limited the term “fiduciary capacity,” as it is used in the statute, to include only those types of relationships arising out of a pre-existing express or technical trust and not those which the law implies from a contract.

Section 523(a)(4)’s fiduciary capacity exception requires a technical trust; a trust implied by law does not suffice.

Romero v. Missirlian (In Re Missirlian) · filed 1990-04-24(a)(4)

Aside from our conclusion that the plaintiff lacks standing to bring this action, we find that the plaintiff’s argument that the debt should be deemed non-dischargeable because the monies received by Medicare were trust funds paid to the debtor in a fiduciary capacity, would fail under § 523(a)(4) of the Bankruptcy Code. There is a long-standing principle emanating from the Supreme Court that in determining dischargeability in bankruptcy, fiduciary responsibility arises only from technical trusts, not from trusts implied in law.

Section 523(a)(4) can apply to a corporate officer who directly participates in a corporate trustee’s defalcation of trust funds.

Woodworking Enterprises, Inc. v. Baird (In Re Baird) · filed 1990-03-22(a)(4)

In this case, it is undisputed that the debtor is the only person responsible for disbursing funds held by Baird Construction. Thus, the debtor directly and actively participated in the defalcation and can be held personally liable in an action under section 523(a)(4).

Section 523(a)(4) excepts from discharge a corporate officer’s debt arising from defalcation while acting as a fiduciary of the corporation.

Advance-United Expressways Inc. v. Wines (In Re Wines) · filed 1990-03-20(a)(4)

The Court finds that the debtor was a fiduciary of the creditor corporation within the meaning of 11 U.S.C. § 523(a)(4) at the time he negotiated the agreement based on his position as chief executive officer and chairman of the board of directors throughout many years. ... The Court further finds that the debtor’s entry into the agreement with the competitor constituted a defalcation under 11 U.S.C. § 523(a)(4).

Section 523(a)(4) excepts a debt from discharge when a commodities broker commits defalcation while acting in a fiduciary capacity created by statutory duties.

Prudential-Bache Securities, Inc. v. Sawyer (In Re Sawyer) · filed 1990-03-22(a)(4)

I concluded that § 523(a)(4) applies in this situation, and that the stipulated facts indicate that Sawyer committed a defalcation while acting in a fiduciary capacity.

Section 523(a)(4) makes an escrow agent’s debt nondischargeable when the agent holds funds in a fiduciary capacity and fails to return or account for them.

Stone v. Feldman (Feldman) · filed 1990-03-12(a)(4)

The sums which the Debtor received from the Plaintiff in the nature of “deposits” and “escrows” were hence funds received by the Debtor while acting in a fiduciary capacity. His admitted failure to repay those sums to the Plaintiff, or even account for same, constitutes a defalcation. ... Therefore, we conclude that the Debtor’s obligation to the Plaintiff in the amount of $10,150 is nondischargeable under § 523(a)(4), as to him only.

Section 523(a)(4) requires an express trust to establish fiduciary capacity for a defalcation claim; knowingly receiving property transferred by someone else’s fiduciary does not suffice.

Shumaker v. Williams (In re Williams) · filed 1990-02-26(a)(4)

However, in this Court’s opinion these facts are not sufficient to establish that the debtor held a fiduciary relationship to the plaintiff. In 1934 the Supreme Court noted that in the context of bankruptcy proceedings the term “fiduciary capacity” should be narrowly applied only to express trust relationships.

Section 523(a)(4) permits a claim that an insurance producer acted in a fiduciary capacity when state law and regulations imposed duties over collected premiums before the alleged wrongdoing.

Coronet Insurance v. Blumberg (In Re Blumberg) · filed 1990-03-15(a)(4)

These duties existed when the PFTA was created, prior to Debtor’s alleged wrongful acts, and establish that Debtor was acting in a fiduciary capacity within 11 U.S.C. § 523(a)(4) at the time of his alleged misdeeds.

Section 523(a)(4) excepts a debt from discharge when it arises from fraud or defalcation by a debtor acting in a fiduciary capacity created by an express or technical trust, including a statutory trust.

Wright v. Menendez (In Re Menendez) · filed 1989-12-01(a)(4)

Therefore, the Court finds that the statutory trust created by Fla.Stat. § 607.301 fulfills the requirement under 11 U.S.C. § 523(a)(4) that there be an “express or technical” trust creating the fiduciary capacity.

Section 523(a)(4) does not make a lottery sales agent’s debt nondischargeable when state rules label an ordinary sales arrangement fiduciary but do not create a genuine trust.

Division of Special Revenue, State of Connecticut v. Schusterman (In Re Schusterman) · filed 1989-12-08(a)(4)

The court holds that Conn.Gen.Stat. § 12-569 and the regulations promulgated thereunder fail to make lottery sales agents’ actions fiduciary ones within the context and purpose of Code § 523(a)(4).

Section 523(a)(4) treats Oklahoma general partners as acting in a fiduciary capacity because their trust relationship exists before any wrongdoing.

Susi v. Mailath (In Re Mailath) · filed 1989-12-13(a)(4)

An express or technical trust, arising by agreement or by state law prior to the commission of any wrongful act, must exist between the parties to create the requisite fiduciary capacity under § 523(a)(4). ... Oklahoma common law clearly evinces an intent that general partners act as trustee for one another and this relationship is imposed from the inception of the partnership and not from any act of wrongdoing.

Section 523(a)(4) excepts a debt for defalcation while acting in a fiduciary capacity from discharge even if the fiduciary received no personal financial gain.

Hirsch v. Winter · filed 1989-10-18(a)(4)

While Appellants may not have received any financial gain from the neglect of their duties, that does not provide a defense to the exception from discharge under section 523(a)(4).

Section 523(a)(4) excepts a debt from discharge when a debtor fails to account for funds entrusted to the debtor in a fiduciary capacity.

Chicago Title Insurance Co. v. Manzo (In Re Manzo) · filed 1989-10-17(a)(4)

Because we find that the debt arose as a result of defalcation committed while acting in a fiduciary capacity, we rule in favor of plaintiff and find that the debt is nondischargeable under § 523(a)(4).

Section 523(a)(4) makes a debt nondischargeable when an express trust existed and the debtor caused the debt through fraud or defalcation while acting as the creditor’s fiduciary.

Klingman v. Levinson · filed 1986-10-28(a)(4)

Under 11 U.S.C. 523(a)(4), three elements must be shown to determine whether a debt is nondischargeable: (1) an express trust existed, (2) the debt was caused by fraud or defalcation, and (3) the debtor acted as a fiduciary to the creditor at the time the debt was created.

Section 523(a)(4) requires a fiduciary relationship based on a trust; pledging stock as security for a debt does not by itself create one.

Haworth v. Kapnison (In Re Kapnison) · filed 1986-09-23(a)(4)

In the case at bar, the Pledge Agreement does not require that the debtor serve as a fiduciary. The Pledge Agreement provides for the rights and liabilities of the parties and nothing indicates either an express or implied intent of the parties that they were to be in a fiduciary relationship.

Section 523(a)(4) requires the fiduciary relationship between debtor and creditor to exist before the wrongdoing that created the debt.

Connecticut National Bank v. Clark (In Re Clark) · filed 1986-10-03(a)(4)

It is equally well settled that as used in § 523(a)(4), a fiduciary relationship between a debtor and his creditor must have existed before the wrongful act that gave rise to the contested debt rather than be imposed as a consequence thereof.

Section 523(a)(4) limits fiduciary capacity to technical or express trusts; partnership status alone does not qualify.

McClain v. Elliott (In Re Elliott) · filed 1986-10-22(a)(4)

Since this statutory provision first appeared in 1841, it has consistently been limited in its application to technical or express trusts as distinct from the frauds of agents, bailees, brokers, factors, partners, and other persons similarly situated.

Section 523(a)(4) requires a fiduciary relationship for a debt arising from fraud or defalcation; a debtor-creditor relationship alone does not suffice.

May v. Baker (In Re Baker) · filed 1986-11-04(a)(4)

Since a debtor/creditor relationship, without more will not establish a fiduciary/beneficiary relationship under § 523(a)(4), plaintiffs’ first cause of action does not state a claim upon which relief can be granted.

Section 523(a)(4) requires an express or technical trust for a debt arising from defalcation in a fiduciary capacity to be excepted from discharge.

Doucette v. Kwiat (In Re Kwiat) · filed 1986-06-30(a)(4)

In order for a fiduciary relationship to exist under 11 U.S.C. § 523(a)(4), there must either be an express or technical trust.

Section 523(a)(4) does not treat a constructive trust implied from a contract as a fiduciary relationship.

Dawley v. Gould (In Re Gould) · filed 1986-08-15(a)(4)

Further, the language of § 523(a)(4), “in a fiduciary capacity”, specifically does not apply to constructive trusts implied by law from contracts.

Section 523(a)(4) does not except a floor-plan financing debt from discharge for fiduciary fraud when the arrangement creates only a debtor-creditor relationship, with no trust.

First American National Bank-Eastern v. Mullins (In Re Mullins) · filed 1986-08-20(a)(4)

It was simply a debtor-creditor relationship secured by inventory, guaranty of the Debtor, and residential mortgage. ... The Plaintiff’s evidence did not show any such trust arrangement which would bring the case within § 523(a)(4).

Section 523(a)(4) requires more than trust language in a security agreement to establish a fiduciary relationship, and § 523(a)(6) requires proof of willful and malicious injury.

American Honda Finance Corp. v. Tester (In Re Tester) · filed 1986-06-23(a)(4), (a)(6)

In light of the authority presented, the Court finds this single mention, along with other evidence, insufficient to create a fiduciary relationship within the meaning of § 523(a)(4). ... AHFC has failed to produce sufficient evidence to support a finding of willful and malicious injury.

Section 523(a)(4) makes a debt for unpaid construction lien claims nondischargeable when the failure to apply trust funds constitutes defalcation while acting in a fiduciary capacity.

Neely v. Edmond (In Re Edmond) · filed 1980-07-02(a)(4)

Furthermore, since Edmond’s failure to pay these lien claims constitutes a defalcation while acting in a fiduciary capacity, the indebtedness arising directly therefrom is nondischargeable in bankruptcy.

Section 523(a)(4) requires a fiduciary relationship arising from an express trust; calling sale proceeds held “in trust” in an inventory financing agreement does not alone create one.

Borg-Warner Acceptance Corp. v. Miles (In Re Miles) · filed 1980-08-12(a)(4)

It is abundantly clear that the relationship between the parties in the present case was that of creditor and debtor and nothing else. ... Accordingly, the Court finds that the debts owed to Borg-Warner Acceptance Corporation and General Electric Credit Corporation are discharged.

Section 523(a)(4) requires a technical or express trust for a debt to arise from fraud or defalcation in a fiduciary capacity.

Mullis v. Walker (In Re Walker) · filed 1980-10-26(a)(4)

The fiduciary relationship required by Section 523(a)(4) of the Bankruptcy Code is not one implied by contract or by the factual situation of the parties and the law, but is one of technical or express trusts.

Section 523(a)(4) does not make a contractor a fiduciary for a debt incurred before the contractor receives the funds that would form the trust.

Wolohan Lumber Co. v. Pacocha (In re Pacocha) · filed 1980-11-04(a)(4)

That since the defendants were not holding any funds paid to them at the time the debts were incurred they did not become fiduciaries under the meaning of § 523(a)(4) of the Bankruptcy Code. The elements of an express trust are not present, because until the contractor has been paid there can be no trust res.

Section 523(a)(4) makes a contractor’s debt for unpaid employee benefit contributions nondischargeable when state law holds construction payments in trust for labor claims and the contractor uses those payments for other debts.

Building Trades United Pension Trust Fund v. Schultz (In re Schultz) · filed 1980-10-07(a)(4)

The plaintiffs maintain that the judgment debt owed to them is not dis-chargeable under 11 U.S.C. § 523(a)(4) because it is based upon the debtors’ failure to pay labor claims as required by Wisconsin’s theft by contractor statute. ... The court agrees.

Section 523(a)(4) does not make a debt nondischargeable for fiduciary defalcation when the parties had only a debtor-creditor relationship.

National Agents Service Co. v. Duiser (In Re Duiser) · filed 1981-01-07(a)(4)

The thrust of the Plaintiff’s case is that of a person acting in a “fiduciary capacity.” The Court gathers from the complaint and evidence that the Plaintiff’s contention is that the funds received were in effect trust funds. This is not supported by the facts presented which actually amount to nothing more than a debtor-creditor relationship whereby the defendant assigned the premium contracts to the plaintiff.

Section 523(a)(4) requires a fiduciary relationship that existed before the wrongdoing; an agency agreement alone does not establish one.

Air Traffic Conference of America v. Paley (In Re Paley) · filed 1981-01-16(a)(4)

The plaintiff failed to introduce any evidence proving that a trust or fiduciary relationship existed among the parties prior to the act of wrongdoing. If a trust or fiduciary relationship existed, it arose as a result of the wrongdoing, i. e., failure to remit the funds to the plaintiff. Under such circumstances, the defendants did not act in a fiduciary capacity within the meaning of 11 U.S.C. section 523(a)(4).

Section 523(a)(4) requires proof that the debtor acted in a fiduciary capacity to except a debt for defalcation from discharge.

National Bank of Detroit v. Olson (In Re Olson) · filed 1981-01-21(a)(4)

The plaintiffs have not presented any evidence which establishes that the debtor ever acted in a “fiduciary capacity” in accordance with § 523(a)(4) or its predecessor statutes.

Section 523(a)(4)'s fiduciary capacity exception applies only to express, technical trusts.

Dixon v. Kirk (In Re Kirk) · filed 1981-02-05(a)(4)

The plaintiff relies, legally, upon 11 U.S.C. § 523(a)(4) to support that portion of her cause of action grounded in “breach of a high trust.” Simply because one is supposed to do something and doesn’t and even if one does not pay for property of another trusted to him, a fiduciary capacity has not existed, in the bankruptcy sense, in the first place. Really, it was long ago settled that such an exception to discharge applies only to express, technical trusts. A very narrow use of this exception to discharge is permitted.

Section 523(a)(4) can except a New York Article 3-A statutory trust debt from discharge if the creditor proves fraud or defalcation by the debtor.

Truax & Hovey, Ltd. v. Grosso (In Re Grosso) · filed 1981-03-16(a)(4)

First, the Plaintiff must establish that he possesses an outstanding trust claim against the Debtor, as defined under Article 3-A of the New York Lien Law. Second, that trust claim or debt must be shown to have resulted from “fraud or defalcation” by the Debtor to qualify his claim under § 523(a)(4) of the Bankruptcy Code.

Section 523(a)(4) makes a debt nondischargeable when a real estate broker fraudulently uses clients’ funds for unrelated expenses while acting in a fiduciary capacity.

Dempsey v. Lawrence (In Re Lawrence) · filed 1981-05-06(a)(4)

However, the plaintiffs have established that the defendant committed fraud while acting in a fiduciary capacity. ... A real estate broker is likewise impressed with this fiduciary obligation. The transfers of the funds advanced by the plaintiffs for unrelated expenses were fraudulent. ... The debts are found to be nondischargeable in bankruptcy and the Court enters judgment for each plaintiff as set forth in the paragraph immediately preceding.

The Michigan Builders Trust Fund Act alone does not place a debtor contractor in a fiduciary capacity for § 523(a)(4)'s defalcation exception.

Sieting Construction v. Emmert (In re Emmert) · filed 1981-05-20(a)(4)

In a case under the 1898 Act, I held that the Michigan Builders Trust Fund Act did not in itself cause the debtor contractor to be in a fiduciary capacity. ... For the reasons set forth in the opinion of the District Court and this Court in In re Johnson, supra, I find the claim of Sieting to be dischargea-ble and its complaint is dismissed with prejudice and without costs to either party.

Section 523(a)(4) makes a fiduciary’s debt nondischargeable when the fiduciary fails to account for entrusted money.

Treacher v. Duttenhofer (In Re Duttenhofer) · filed 1981-07-31(a)(4)

His failure to account is a defalcation which renders the liability non-dischargeable.

Section 523(a)(4) excepts from discharge a fiduciary’s unexplained failure to remit funds held in a statutory trust.

In Re Cairone · filed 1981-06-17(a)(4)

Based on these precedents, the unexplained failure of the Debtors to remit to the Lottery Commission the proceeds they obtained during their fiduciary relationship with the Commission, is defalcation within the meaning of § 523(a)(4). Accordingly, the debt in controversy falls within the scope of § 523(a)(4), and is excepted from discharge.

Section 523(a)(4) excepts from discharge a debt arising when a fiduciary fails to remit funds held in a statutory trust.

Rhode Island Lottery Commission v. Yolanda (In re Yolanda) · filed 1981-06-17(a)(4)

Based on these precedents, the unexplained failure of the Debtors to remit to the Lottery Commission the proceeds they obtained during their fiduciary relationship with the Commission, is defalcation within the meaning of § 523(a)(4).

Section 523(a)(4) strictly construes fiduciary status when determining whether a debt for fraud or defalcation is nondischargeable.

National Agents Service Co v. Duiser (In Re Duiser) · filed 1981-07-14(a)(4)

Under § 523, the responsibilities of a fiduciary are not lightly imposed upon a Debtor; the term “fiduciary” is strictly construed.

Section 523(a)(4) requires a preexisting express trust for a debtor to act in a fiduciary capacity; a trust arising from the wrongdoing itself does not suffice.

Witt Building Material Co. v. Barker (In Re Barker) · filed 1981-07-15(a)(4)

An implied trust or a trust ex maleficio which arises as a result of an act of wrongdoing does not create the “fiduciary capacity” required in § 523(a)(4).

Section 523(a)(4) requires a fiduciary trust relationship that predates the defalcation; a constructive trust arising from the wrongdoing does not suffice.

Climax Molybdenum v. Specialized Installers, Inc. (In Re Specialized Installers, Inc.) · filed 1981-07-16(a)(4)

The trust relation must arise prior to the defalcation, not as a result of it.

Section 523(a)(4) does not except a debt from discharge for fiduciary defalcation when the parties had only a debtor-creditor relationship.

Brauman Paper Co. v. Neumann (In Re Neumann) · filed 1981-07-24(a)(4)

Accordingly, evidence showing that nothing other than a debtor-creditor relationship existed between Brauman and Neumann cannot sustain plaintiff’s action under 11 U.S.C. § 523(a)(4).

Section 523(a)(4) bars discharge for defalcation in a fiduciary capacity only if the fiduciary relationship existed before the misuse of funds.

Jasel Building Products Corp. v. Polidoro (In Re Polidoro) · filed 1981-07-23(a)(4)

In order to bar discharge of the judgment under section 523(a)(4), it is not enough that the debtor should be found liable under state law as a trustee: rather, it must appear that the debtor stood in a fiduciary relationship with the plaintiff before his corporation’s misapplication of funds and without reference thereto.

Section 523(a)(4) excepts from discharge a debt arising from an executor’s failure to account for estate funds, which is defalcation while acting as a fiduciary.

Johnson v. Gramza (In Re Gramza) · filed 1981-08-21(a)(4)

In view of the above, it is clear to this court that the debtor defaulted while acting as a fiduciary and the plaintiff is entitled to summary judgment. The Circuit Court’s judgment was based upon the debtor’s failure to account for funds which came into his possession as personal representative of the estates of Donald and Joan Gramza. ... And a personal representative/executor’s failure to account for funds is unquestionably a defalcation.

Section 523(a)(4) excepts from discharge a fiduciary’s debt arising from failure to account for money received in a fiduciary capacity.

Aetna Insurance v. Byrd (In Re Byrd) · filed 1981-11-02(a)(4)

Defalcation includes the failure by a fiduciary to account for money he received in his fiduciary capacity.

Section 523(a)(4)’s fiduciary capacity exception does not apply to a real estate broker’s breach of duty to a client.

Williams v. Bernardelli (In re Bernardelli) · filed 1981-08-14(a)(4)

Additionally, even though there is no question that defendant breached his duty as a real estate broker-salesman when he failed to protect plaintiff’s conditional listing, Section 523(a)(4) insofar as it relates to a debtor acting in a fiduciary capacity does not apply to real estate brokers.

Section 523(a)(4) limits fiduciary capacity to technical or express trusts.

Kannon v. Blalock (In Re Blalock) · filed 1981-08-21(a)(4)

The term “fiduciary capacity” in § 523(a)(4) will, therefore, be limited in application to technical or express trusts.

Section 523(a)(4) makes debts for embezzlement or larceny nondischargeable even without a fiduciary relationship.

Lumbermens Mutual Casualty Co. v. Snellgrove (In Re Snellgrove) · filed 1981-10-30(a)(4)

Section 523(a)(4) clearly provides that debts for embezzlement or larceny are nondischargeable, whether or not they occurred within a fiduciary capacity.

Section 523(a)(4) makes a guardian’s debt for defalcation while acting in a fiduciary capacity nondischargeable.

Alabama National Bank v. Beach (In re Beach) · filed 1981-08-26(a)(4)

As to the dischargeability of Beach’s debt as guardian for defalcation while acting in a fiduciary capacity, under Section 523(a)(4) of the Bankruptcy Code of 1978, the conclusion must be that this debt, under the applicable Alabama law, is non-dischargeable.

Section 523(a)(4) excepts a corporate officer’s fiduciary fraud or defalcation from discharge, and § 523(a)(6) excepts loan repayments that willfully and maliciously injure a creditor.

UNITED VIRGINIA BANK v. Fussell (In Re Fussell) · filed 1981-10-16(a)(4), (a)(6)

Section 523(a)(4) of the Bankruptcy Code is appropriately applied to prevent the discharge of such debts. ... Accordingly, this Court finds that the loan repayments to Fussell were effectuated in violation of § 523(a)(6).

Section 523(a)(4) requires a technical trust for a debt arising from fraud or defalcation in a fiduciary capacity; a trusted agent relationship alone is insufficient.

DL&B Oil Co. v. Dawson (In Re Dawson) · filed 1982-01-04(a)(4)

This court interprets the qualifying terms “fiduciary duty” to require proof of a technical trust between the agent and principal, before a debt due and owing between them can be found non-dischargea-ble. The facts in the instant case do not demonstrate such a relationship and therefore judgment for the debtor, Michael O. Dawson, is hereby entered.

Section 523(a)(4) makes a debt nondischargeable when a fiduciary contractor fails to pay a subcontractor its pro rata share of project funds received.

C. Bundy, Jr., Inc. v. Karsten (In Re Karsten) · filed 1982-01-14(a)(4)

3. T. A. K. was a fiduciary for the benefit of its subcontractors, employees, and materialmen, including Bundy, upon its receipt of payments on the Moore Oil and the Voell Machinery jobs. ... 6. T. A. K. breached its fiduciary obligation to C. Bundy, Jr., Inc. by failing to pay it a pro rata share of the funds it received for the Moore Oil and Voell Machinery jobs. ... 8.Therefore, the sum of $4,531.94 is a nondischargeable debt as provided by 11 U.S.C. § 523(a)(4) of the Bankruptcy Code.

Section 523(a)(4) excepts a fiduciary’s intentional, unauthorized diversion of funds from discharge without requiring personal benefit or criminal intent.

Price v. Price (In Re Stalnaker) · filed 1982-04-07(a)(4)

To establish a defalcation, the plaintiff is not required to prove that the fiduciary derived a personal benefit from the diversion of the estate or that there was any criminal intent. She need prove only that the diversion was unauthorized and intentional.

Section 523(a)(4) requires a technical or express trust for a debt arising from fraud or defalcation in a fiduciary capacity to be nondischargeable.

Jarrell v. Weidman (In Re Weidman) · filed 1982-03-09(a)(4)

11 U.S.C. § 523(a)(4) applies only to technical and express trusts and does not apply to fiduciary relationships which arise out of equitable or implied trusts.

Section 523(a)(4) requires a technical or express trust to establish a fiduciary relationship.

Snap-On Tools Corp. v. Rigsby (In Re Rigsby) · filed 1982-03-10(a)(4)

Under this section only agreements which create a technical or express trust create a fiduciary relationship.

Section 523(a)(4) covers the fiduciary relationship created by Michigan’s construction trust fund statute, but the creditor must prove intent to defraud when the debtor misappropriated trust funds.

Littlejohn v. Englund (In Re Englund) · filed 1982-06-16(a)(4)

This Court holds, therefore, that a fiduciary relationship is created by the Michigan statute and that this fiduciary relationship falls within the scope of 523(a)(4), but such a holding is limited by the decision of the district court in In re Trimble, 1 BCD 1276 (DC ED Mich.1975). ... To succeed on a complaint of the type before the Court, the creditor is going to have to prove that the Debtor had the intent to defraud his creditors when he misappropriated funds that were the res of the trust.

Section 523(a)(4) requires a technical or express trust that existed before the debt arose for defalcation in a fiduciary capacity.

Joseph Lorenz, Inc. v. Thomas (In Re Thomas) · filed 1982-06-30(a)(4)

For a debt to be non-dischargeable under this section, the prerequisite fiduciary relationship must rest upon a technical or express trust and not upon a trust implied in law resulting from an act of wrong doing. Further, the fiduciary relationship must be shown to have been in existence prior to the creation of the debt in controversy.

Section 523(a)(4) prevents discharge of a debt arising from a debtor’s failure to remit pension payments held for another as a constructive trustee.

Brown v. Brown (In Re Brown) · filed 1982-07-06(a)(4)

The failure of MR. BROWN to remit to the plaintiff her equitable interest in each payment amounts to a breach of this fiduciary duty. Therefore, pursuant to 11 U.S.C. Section 523(a)(4), the obligation of the defendant, ROBERT BROWN, to remit to the plaintiff her equitable interest in each past Pension payment is not dischargeable in bankruptcy.

Section 523(a)(4) excepts from discharge a debt arising when a fiduciary fails to account for money received in that capacity.

Kleppinger v. Kleppinger (In Re Kleppinger) · filed 1982-08-18(a)(4)

Defalcation includes the failure by a fiduciary to account for money he received in his fiduciary capacity. ... Consequently, the debtor falls squarely within the language of § 523(a)(4) and the $3,000.00 debt will be ordered non-dis-chargeable.

Section 523(a)(4) requires an express trust for a debt arising from fiduciary defalcation to be excepted from discharge; an agency relationship alone does not suffice.

American Insurance Co. v. Lucas (In Re Lucas) · filed 1982-07-08(a)(4)

Willful and malicious conversions of another’s property having been eliminated as grounds for excepting debts from a discharge under the provisions of Section 523 of the revised Code except as they can be construed to be injuries to that property under Section 523(a)(6), we feel constrained by the foregoing authorities to hold that liabilities for debtors’ defalcations under the present circumstances and law must be held to be discharged.

Section 523(a)(4) excepts from discharge a contractor’s debt arising from the misapplication of construction funds held in trust for lien claimants.

Oklahoma Brick Corp. v. Fisher (In Re Fisher) · filed 1982-09-07(a)(4)

Since such trust relationship was created prior to the foreclosure suit and the state statute mandated that no trust funds could be improperly disbursed to others except lien claimants (Sec. 152, supra) nondischargeable debts were created and remained unaffected by the subsequent foreclosure.

Section 523(a)(4)’s fiduciary capacity requirement for fraud or defalcation is limited to technical or express trusts; a trust imposed by operation of law does not qualify.

Hall v. Cooper (In Re Cooper) · filed 1982-10-01(a)(4)

The fiduciary capacity requirement of this section of the Code has consistently been limited to technical or express trust relationships and not to trusts which are imposed by operation of law.

Section 523(a)(4) does not treat an ordinary principal-agent relationship as fiduciary unless a statute defines it as such.

Green Acres Investment v. Ridgway (In Re Ridgway) · filed 1982-11-22(a)(4)

Absent a statutory definition, a principal-agent relationship does not fall within the meaning of the bankruptcy law’s definition of fiduciary.

Section 523(a)(4) does not except a debt from discharge for fiduciary fraud or defalcation when the debtor had no duty to account for or segregate the creditor’s funds.

Great American Insurance v. Storms (In Re Storms) · filed 1983-03-11(a)(4)

Storms was under no obligation to account for premiums received, he was not required or requested to segregate funds, and his relationship with Great American lacked formality, as evidenced by the minimal duties imposed upon him. The Court concludes that Storms was not in a fiduciary relation and discharge of his debt to Great American cannot be denied on the basis of fraud or defalcation by a fiduciary pursuant to § 523(a)(4) of the Bankruptcy Code.

Section 523(a)(4) does not except a debt from discharge for breach of fiduciary duty when the parties have only a contractual relationship, without an express technical or statutory trust.

REL Commercial Corp. v. Materetsky (In Re Materetsky) · filed 1983-03-17(a)(4)

The case at bar involves neither an express technical trust, nor a statutory trust. Therefore, despite their contractual obligations to REL, neither Materetsky nor Amis owed a fiduciary duty to REL within the meaning of Bankruptcy Code section 523(a)(4).

A creditor seeking to except a debt from discharge for misuse of a real estate deposit must establish that the debtor was liable to return the deposit.

Williams v. Keown (In re Keown) · filed 1983-04-15(a)(4)

If the Williams were entitled to the return of their deposit, the Court would consider excepting this debt from discharge. The plaintiffs, however, have not convinced this Court that Mr. Keown is liable for these monies.

Section 523(a)(4) requires a technical or express trust between debtor and creditor for a debt based on fiduciary defalcation to be nondischargeable.

General Electro Music, Inc. v. Messore (In re Messore) · filed 1983-04-22(a)(4)

The fiduciary relationship required by 11 U.S.C. § 523(a)(4) must be a technical or express trust between the debtor and creditor.

Section 523(a)(4) requires an actual trust relationship for fiduciary defalcation; boilerplate terms in an agreement do not create one.

Argonaut Insurance v. Morris (In Re Morris) · filed 1983-06-02(a)(4)

If the relationship between the parties is not one of actual trust, boilerplate language in an agreement will not create a fiduciary relationship.

Section 523(a)(4)'s fiduciary capacity exception does not cover a constructive trust implied by Minnesota's contractor theft statute.

MacArthur Co. v. Crea (In Re Crea) · filed 1983-06-02(a)(4)

In addition, the fiduciary capacity the Minnesota Supreme Court has found implied in § 514.02 imposes a constructive trust to which § 523(a)(4) exception to discharge does not apply.

Section 523(a)(4) requires a special fiduciary relationship for a debt arising from fraud or defalcation to be nondischargeable; a corporate officer ordinarily has no such relationship with a corporate creditor.

Kosik v. Hays (In Re Hays) · filed 1983-06-17(a)(4)

Nevertheless, there is usually no fiduciary relation of the kind required by § 523(a)(4) between the creditor and the corporate officer.

Section 523(a)(4) requires the fiduciary relationship to exist before the fraud; a constructive trust arising from the wrongdoing does not establish fiduciary capacity.

Star Industries, Inc. v. Ruskin (In Re Ruskin) · filed 1983-07-26(a)(4)

In light of the foregoing, this Court continues to be of the view that a constructive trust imposed ex maleficio does not give rise to a fiduciary capacity within the meaning of § 523(a)(4) of the Bankruptcy Code and that the Order on Motion for Summary Judgment entered May 17, 1983 was decided in accordance with controlling ease law on the subject.

Section 523(a)(4)'s fiduciary defalcation exception requires an express or technical trust; a contractual debtor-creditor relationship does not suffice.

Robles v. Lowther (In Re Lowther) · filed 1983-08-31(a)(4)

This section deals with an express or technical trust and not one simply arising out of contract.

Section 523(a)(4) makes a debt for defalcation nondischargeable when a public officer holds funds in a fiduciary capacity under a statutory trust.

Eau Claire County v. Loken (In Re Loken) · filed 1983-08-04(a)(4)

Thus, even if the facts before the court may be insufficient to find that Lo-ken embezzled the $30,000.00, there is a sufficient basis to find that the money was obtained by defalcation while serving in a fiduciary capacity.

Section 523(a)(4) treats defalcation under an express trust that predates the debt as a debt incurred while acting in a fiduciary capacity.

Travelers Express Co. v. Niven (In Re Niven) · filed 1983-08-22(a)(4)

After careful review of all the above, we are of the opinion that the Trust Agreement entered into between all the parties was a “trust” for purposes of the “fiduciary capacity” requirements of § 523(a)(4). Clearly, the document evidences an explicit declaration of the creation of a trust and an intent to create a trust relationship. Further, and we believe, more importantly, there exists a clearly defined trust res.

Section 523(a)(4) requires a fiduciary relationship, and § 523(a)(6) requires willful and malicious injury rather than negligent business oversight.

Ford Motor Credit Co. v. Clifton (In Re Clifton) · filed 1983-09-06(a)(4), (a)(6)

Based on the above considerations, this Court finds that the debtors were not acting in a fiduciary capacity as to FMCC and that the complaint for nondischargeability under 11 U.S.C. § 523(a)(4) must be dismissed. ... That scale of involvement in the activity of which FMCC complains is not enough, under § 523, to rise to the level of “willful and malicious.”

Section 523(a)(4) excepts a debt from discharge when a corporate officer diverts inventory sale proceeds held in trust to keep the business operating, even if he is not personally liable to the creditors paid.

Appliance Buyers Credit Corp. v. Tocci (In Re Tocci) · filed 1983-10-24(a)(4)

Although the term “misappropriation” is eliminated, the term “defalcation” is generally recognized as a broader term. ... That factual difference does not require a different conclusion. In this instance, as in that case, the debtor’s defalcation served his personal purpose. As an officer and a major stockholder of the corporation, he diverted the money in question in order to keep his business alive and thus serve his personal purpose.

Section 523(a)(4) requires a plaintiff alleging defalcation to prove that the debtor was a fiduciary and committed the defalcation while acting in that capacity.

American Metals Corp. v. Cowley (In Re Cowley) · filed 1983-12-01(a)(4)

Bankruptcy Rule 4005 puts the burden of proving the elements of a § 523 action on the plaintiff. Here the plaintiffs must prove two elements: that the debtor was a fiduciary of AMC; and that while a fiduciary, the debtor committed a defalcation. ... The plaintiffs have simply failed to prove that the debtor committed a defalcation.

Section 523(a)(4) does not treat a corporate officer’s duty to ensure workers’ compensation coverage as a fiduciary duty.

Samuel v. Baitcher (In Re Baitcher) · filed 1983-12-14(a)(4)

Defendant-Debtor had a duty under Georgia law to see that her corporation insured the payment of workmen’s compensation. However, that duty did not constitute a fiduciary duty within the meaning of § 523(a)(4).

Section 523(a)(4) requires a fiduciary relationship grounded in an express trust; trust language and a collateral account do not turn a creditor-debtor relationship into one.

Barclays American/Business Credit, Inc. v. Long (In Re Long) · filed 1983-12-14(a)(4)

Neither the use of the words “express trust” nor the existence of a collateral account, into which proceeds from receivables were to be deposited in order to segregate the money from ACJ, alone, nor in conjunction, create a fiduciary relationship where the substance of the relationship between the parties was that of creditor/debtor.

Section 523(a)(4) includes the fiduciary relationship between a corporate officer or director and the corporation.

Black's Inc. v. Decker (In Re Decker) · filed 1983-12-30(a)(4)

This court holds the fiduciary relationship required under 11 U.S.C. § 523(a)(4) includes the fiduciary relationship between a corporate officer or director and the corporation.

Section 523(a)(4) excepts from discharge a debt arising from a partner’s defalcation while acting under a preexisting fiduciary duty.

Holmes v. Kraus (In Re Kraus) · filed 1984-02-01(a)(4)

In the present proceeding, this Court agrees with the state court’s findings that numerous disbursements were made by the debtor in breach of his fiduciary duties under M.C.L.A. 449.21, and that such a breach properly constitutes a defalcation. Therefore, this Court determines that the full state court judgment is a non-dischargeable debt of the debtor under 11 U.S.C. § 523(a)(4).

Section 523(a)(4)’s fiduciary-capacity exception requires an actual trust with identifiable property.

Greyhound Lines, Inc. v. Fains (In Re Fains) · filed 1984-03-05(a)(4)

Therefore, because no certain and ascertained res ever existed, we find that the defendant was not acting in a fiduciary capacity with respect to the plaintiff.

Section 523(a)(4) makes a subcontractor's debt to a prime contractor nondischargeable when the subcontractor diverts public-project trust funds for its own purposes.

In the Matter of Paul E. Thomas · filed 1984-03-07(a)(4)

Plaintiff satisfied its burden of establishing nondischargeability by showing that it paid defendants $17,804.54 to complete the work and that the defalcation by defendants occurred when they used this trust fund for their own purposes.

Section 523(a)(4) makes diverted construction trust funds nondischargeable to the extent the debtor cannot show they were spent on the project.

In re Thomas · filed 1984-03-07(a)(4)

The lower courts erred in refusing to find that the entire $17,804.54 was nondischargeable, at least in the absence of proof by defendants of expenditures for the Green Market project.

Section 523(a)(4) requires an express trust for a debt arising from fraud or defalcation in a fiduciary capacity to be nondischargeable.

Energy Marketing Corp. v. Sutton (In Re Sutton) · filed 1984-04-13(a)(4)

While EMC may have intended to create an express trust arrangement with the debtor, it failed to properly structure and maintain such a relationship. Without an express trust relationship, a fiduciary relationship under § 523(a)(4) cannot be found.

Section 523(a)(4) requires the fiduciary relationship to exist before the defalcation and excepts from discharge a debt arising from fraud committed in that capacity.

Estate of Hensel v. Barker (In Re Barker) · filed 1984-05-14(a)(4)

In the context of section 523(a)(4) the relationship giving rise to fiduciary capacity must exist before the defalcation giving rise to the claim arose. ... Accordingly, the Court finds that the Defendant has committed fraud while acting in a fiduciary capacity and the outstanding indebtedness owing to Hensel is found to be non-dischargeable in bankruptcy.

Section 523(a)(4) makes a debt arising from embezzlement nondischargeable even if the debtor was not acting in a fiduciary capacity.

Funventures in Travel, Inc. v. Dunn · filed 1984-05-15(a)(4)

The phrase “while acting in a fiduciary capacity” does not modify the words “embezzlement or larceny.”

Section 523(a)(4) does not except a debt for fraud or defalcation from discharge unless the debtor acted in a fiduciary capacity toward the creditor.

Ivester v. Raymond (In re Raymond) · filed 1984-05-29(a)(4)

The plaintiff, having failed to sustain his burden of proof of fraud or defalcation while acting in a fiduciary capacity, § 523(a)(4), the claim is discharged.

Section 523(a)(4) excepts a debt for fraud or defalcation while acting in a fiduciary capacity from discharge.

American MacHinery & Engineering Corp. v. Entrekin (In Re Entrekin) · filed 1984-05-25(a)(4)

I find that the plaintiff is owed $29,202 by the debtors, jointly and severally, for fraud or defalcation on their part while acting in a fiduciary capacity. As is required by B.R. 9021(a), a separate judgment will be entered in that sum and excepting that claim from discharge under § 523(a)(4).

Section 523(a)(4) excepts a debt from discharge when a debtor’s failure to remit assigned sale proceeds constitutes defalcation of a fiduciary duty.

Super Concrete Corp. v. Shipe (In Re Shipe) · filed 1984-06-27(a)(4)

The Shipes’ failure to honor the assignment upon receipt of the proceeds clearly constitutes a defalcation of their fiduciary responsibilities, therefore the debt of $11,137.96 (with interest from February 26, 1981, the date of settlement) is nondischargeable under § 523(a)(4).

Section 523(a)(4) excepts a debt for defalcation from discharge only if the debtor acted under a preexisting express or technical trust.

Carey Lumber Co. v. Weaver (In Re Weaver) · filed 1984-07-27(a)(4)

Finding that Carey can not benefit from the imposition of §§ 152 and 153, there exists no technical nor express trust and hence no “fiduciary capacity” for purposes of 11 U.S.C. § 523(a)(4). The debt is therefore dischargeable.

Section 523(a)(4) excepts a debt for defalcation from discharge when a debtor in a fiduciary relationship receives another’s money and uses or misappropriates it without first paying the debt owed to that person.

Livingston v. Zurich Insurance (In Re Livingston) · filed 1984-07-30(a)(4)

The elements of defalcation are: 1) The debtor is in a fiduciary relationship with the plaintiff; 2) Money belonging to plaintiff came into the hands of the debtor; and 3) Debtor used or misappropriated this money without first retiring his debt to plaintiff.

Section 523(a)(4) requires a fiduciary relationship that existed before or independently of the transaction giving rise to the debt.

Szilagyi v. LeMire (In re LeMire) · filed 1984-06-19(a)(4)

Although the Court rejects the debtor’s contention that Dr. Szilagyi “was at all times a full partner in Rubicon International,” Debtor’s Memorandum at 16, the Court does find that the relationship between Edward Lemire and Dr. Szilagyi was not a fiduciary one that “existed previous to or independent of the particular transaction” at issue — the inducement for Dr. Szilagyi’s signing the note and personal guaranty.

Section 523(a)(4) requires a preexisting express trust for a debt arising from defalcation in a fiduciary capacity to be nondischargeable.

American Insurance Co. v. Lucas · filed 1984-07-26(a)(4)

Therefore, this Court interprets the qualifying terms “fiduciary duty” under Section 523(a)(4) to require proof of a trust between the agent and principal before a debt due and owing between them can be found nondischargeable. The facts in the instant case do not demonstrate such a relationship and therefore an order of dismissal was properly entered by the Bankruptcy Court.

Section 523(a)(4) does not treat a dealer’s use of floor-plan proceeds to pay business expenses as fiduciary defalcation when the dealer seeks no personal benefit.

Ford Motor Credit Co. v. Hickey (In Re Hickey) · filed 1984-07-11(a)(4)

In this case, no part of the money received for the vehicles sold out of trust was used for any non-corporate purpose. The debtor, who was then confident he would receive substantial credits from Ford, used the sales proceeds to pay his most pressing business expenses in order to keep his doors open. This was the debtor’s only purpose. ... I find no defalcation while acting in a fiduciary capacity in the debtor’s use of the busines receipts which are in question here. Plaintiff has, therefore, failed to substantiate its allegations under § 523(a)(4).

Section 523(a)(4) excepts from discharge a debt resulting from defalcation while the debtor acts in a fiduciary capacity.

Landvest Associates v. Owens (In Re Owens) · filed 1984-09-11(a)(4)

This Court holds that the defendant was obligated to the plaintiffs in a fiduciary capacity. The defendant committed defalcation while acting in that fiduciary capacity, and the plaintiff’s debt resulted from the defendant’s defalcation. The debt is, therefore, nondischargeable pursuant to 11 U.S.C. § 523(a)(4).

Section 523(a)(4) requires a fiduciary relationship based on a trust that exists before the wrongdoing and independently of contractual obligations.

Toledo Area Construction Workers Health & Welfare Plan v. Hayden (In Re Hayden) · filed 1984-11-14(a)(4)

The threshold question is whether O.R.C. 4113.15(c) imposes the standard of a fiduciary duty as required by 11 U.S.C. § 523(a)(4). The court finds the statutory language of O.R.C. 4113.15(C) does not create an express trust prior to an act of wrongdoing or apart from contractual obligations and therefore, it does not convert the employer’s status to that of fiduciary for purposes of the Bankruptcy Code.

Section 523(a)(4) excepts a debt from discharge when a debtor appropriates sales proceeds held under an express trust that requires the proceeds to be kept separate.

Chrysler Credit Corp. v. Rebhan (In Re Rebhan) · filed 1985-01-04(a)(4)

On the basis of the trust agreements and the evidence presented, the Court finds that the trust agreements created a formal, express trust as to sales proceeds and that the defendant committed fraud or defalcation while acting in a fiduciary capacity through the appropriation of those proceeds.

Section 523(a)(4) requires proof of fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny to except a debt from discharge.

Allentown Supply Co. v. McCurdy (In Re McCurdy) · filed 1985-01-16(a)(4)

We simply cannot except from discharge debts on the basis of accusations which are not supported by any concrete oral and written testimony that prove or establish any of the requirements of the discharge sections of the Code. In short, we find that the plaintiff has simply not met its burden of proof under § 523(a)(4) of the Bankruptcy Code.

Section 523(a)(4) excepts from discharge a debt for an attorney’s defalcation while acting as the client’s fiduciary.

Brawer v. Gelman (In Re Gelman) · filed 1985-03-19(a)(4)

Accordingly, the judgment debt in the amount of $65,000, as compensatory damages, and costs of $1,564.15 is a debt for defalcation while acting in a fiduciary relationship and accordingly, is not dis-chargeable in bankruptcy proceedings as provided by 11 U.S.C. § 523(a)(4).

Section 523(a)(4) excepts from discharge a debt arising from a fiduciary’s unauthorized use of money entrusted for a specific purpose.

Goldberg v. Wolfington (In Re Wolfington) · filed 1985-03-21(a)(4)

There can be no doubt in this case that the deposit monies were entrusted to the debtor for a specific purpose, creating a fiduciary relationship between the debtor and the plaintiffs. ... In conclusion, we find that the debt owed to the plaintiffs is non-dischargeable under section 523(a)(4) of the Code and judgment will be entered for the plaintiffs in the amount of $13,000.00 plus interest.

Section 523(a)(4) does not treat a commercial security agreement as a fiduciary trust merely because it uses trust language and imposes duties to protect collateral.

Congress Financial Corp. v. Levitan (In Re Levitan) · filed 1985-02-14(a)(4)

This court, based on the analysis of Chapman and its progeny, concurs with Miles and holds that a security agreement between a commercial creditor and debtor is not transformed into a trust for purposes of § 523(a)(4) by the insertion of trust language and the imposition of duties upon the debtor for the protection of the collateral.

Section 523(a)(4) does not except unpaid fringe benefits from discharge as fiduciary defalcation when the contractor owns the funds received and owes only a contractual duty to pay.

Teamsters Local 533 v. Schultz (In Re Schultz) · filed 1985-02-22(a)(4)

At most, the statute creates an agency of a type excluded from the reach of § 523(a)(4): Even if Schultz became an “agent” by operation of the statute, nevertheless, he had a “present right” to the funds received and they became his property. Since one cannot be a fiduciary in the strict sense when handling one’s own money, Schultz’ obligation to pay the fringe benefits was a contractual — not a fiduciary — debt.

Section 523(a)(4) limits fiduciary capacity to traditional trust relationships, such as express trusts, and excludes trusts implied in law or imposed by statute.

American Home Assurance Co. v. Katzen (In Re Katzen) · filed 1985-03-20(a)(4)

For the purposes of this section, the term “fiduciary” is limited to traditional trust relationships, such as express trusts, not trusts implied in law or imposed by statute.

Section 523(a)(4) excepts from discharge a debt caused by a corporate officer’s defalcation of entrusted escrow funds while acting in a fiduciary capacity.

Bellity v. Wolfington (In Re Wolfington) · filed 1985-04-26(a)(4)

We find that the debtor, while acting in a fiduciary capacity, misused the escrow funds, and that the underlying debt owed to the plaintiff as a result of his defalcation, is non-dis-chargeable under § 523(a)(4) of the Code.

Section 523(a)(4) requires a preexisting technical trust for a debt to be excepted from discharge as fraud or defalcation in a fiduciary capacity.

Parrotta v. Rausch (In Re Rausch) · filed 1985-05-31(a)(4)

For the same reasons articulated by the Court in Matter of Angelle, this Court holds that N.J.S.A. 2A:29A-1 and A-3 does not make the Debtor-Defendant in the case at bar a fiduciary within the meaning of 11 U.S.C. § 523(a)(4).

Section 523(a)(4) requires proof that the debtor committed a defalcation; a shortage caused by a third party’s withdrawal of custodial funds is insufficient.

National Bonding & Accident Insurance v. Petersen (In Re Petersen) · filed 1985-08-01(a)(4)

In any case, National Bonding has not met its burden of proving debtor himself misappropriated custodial funds in the amount claimed and thereby committed an act of defalcation.

Section 523(a)(4) does not require a fiduciary relationship for a debt arising from embezzlement or larceny to be nondischargeable.

Billing Systems, Inc. v. Nee (In Re Nee) · filed 1985-06-21(a)(4)

The phrase “while acting in a fiduciary capacity” qualifies the words “fraud or defalcation” and not “embezzlement or larceny.”

Section 523(a)(4) requires a creditor alleging fiduciary fraud to prove that the debtor acted as a fiduciary under federal law.

Younger v. Ford (In Re Ford) · filed 1985-07-15(a)(4)

In order to come within Section 523(a)(4) on the ground of fraud applicable to fiduciaries, the creditor must prove the debtor was acting as a fiduciary as defined by federal law.

Section 523(a)(4)'s exception for fraud or defalcation while acting in a fiduciary capacity requires a fiduciary relationship arising from an express trust.

American Federation of State, County & Municipal Employees, Local 2051 v. Stephens (In Re Stephens) · filed 1985-08-15(a)(4)

Although the complaint and briefs emphasize the allegation of fraud or defalcation while acting in a fiduciary capacity, we agree with Stephens that this clause is limited to fiduciary relationships arising from an express trust, which was not present in this case.

Section 523(a)(4) does not except a debt from discharge for defalcation in a fiduciary capacity when the agreement fails to create a genuine trust.

Missouri Department of Conservation v. Schnitz (In Re Schnitz) · filed 1985-06-25(a)(4)

According to 11 U.S.C. § 523(a)(4), an individual debtor is not discharged from a debt arising from “fraud or defalcation while acting in a fiduciary capacity, embezzlement or larceny.” ... In the instant case, the intent to create a trust was not clearly expressed, nor were trust-type duties imposed on the debtor. The debtor did not segregate the funds acquired pursuant to the agreement, nor was he required to do so. ... Accordingly, the Court finds that the appellee failed to meet its burden of proof and concludes that the debt of $2,685.14 is discharged.

Section 523(a)(4) excepts a debt from discharge when an employee’s kickbacks constitute defalcation while acting in a fiduciary capacity.

Compugraphic Corp. v. Golden (In Re Golden) · filed 1985-09-19(a)(4)

Golden, by taking kickbacks in the form of a secret consulting job with one of his major vendors engaged in a defalcation while acting in a fiduciary capacity. ... Therefore, under 11 U.S.C. § 523(a)(4), Golden’s obligation of $181,744.50 is nondischargeable.

Section 523(a)(4) makes a debt nondischargeable when a fiduciary fails to account for money received in that capacity.

Aquarian Foundation, Inc. v. Angel (In re Thomas) · filed 1985-09-25(a)(4)

Defalcation includes the failure by a fiduciary to account for money received in his fiduciary capacity. ... Since Debtor has failed to adequately account for the $9,165.17, the Court finds that the second element of Sec. 523(a)(4) has been satisfied.

Section 523(a)(4) requires an express or technical trust to establish fiduciary capacity for a defalcation exception to discharge.

Virginia Commission of Game & Inland Fisheries v. Myers (In Re Myers) · filed 1985-08-28(a)(4)

However, until an express or technical trust is shown, no fiduciary relationship will exist under § 523(a)(4).

Section 523(a)(4) does not use ERISA’s definition of “fiduciary” to determine whether a debt arose from fraud or defalcation while acting in a fiduciary capacity.

Schrimsher v. Nielsen (In Re Nielsen) · filed 1985-09-13(a)(4)

But, it is not necessary to decide whether, as claimed, the statute deals with the rights of the plaintiff against these defendants, because it does not appear that the defendants were “fiduciaries,” as the term is used in 11 U.S.C. § 523(a)(4).

Section 523(a)(4) requires a genuine fiduciary relationship for a debt arising from fraud or defalcation to be excepted from discharge; trust language in an agreement is insufficient when the parties’ actual relationship is debtor and creditor.

Air Traffic Conference of America v. Chick (In Re Chick) · filed 1985-09-30(a)(4)

In looking at the substance of the relationship between the parties, the specific intent to create an express trust (fiduciary relationship) is lacking. This court finds that the relationship existing between the defendant, Anne-Lise Chick, and the plaintiff is a debtor-creditor relationship, not a fiduciary one.

Section 523(a)(4) does not treat an insurance agent as a fiduciary merely because the agency agreement calls the agent a trustee when the parties' relationship is that of debtor and creditor.

Auto-Owners Insurance v. Lipke (In Re Lipke) · filed 1985-10-17(a)(4)

Based on this consistent line of cases, the court is convinced that defendant was not acting in a fiduciary capacity within the meaning of sec. 523(a)(4). ... Under these circumstances, the relationship between the parties in practice was a debt- or-creditor relationship. The language in the agency agreement referring to defendant as a trustee for premium monies does not abrogate the realities of the parties’ relationship.

Section 523(a)(4) excepts a debt from discharge when an insurance agent fails to pay a return premium to a creditor who acquired the insured’s rights by assignment.

National Premium Budget Plan Corp. v. Nicholson (In Re Nicholson) · filed 1985-12-12(a)(4)

After consideration, the Court finds that the above assignment created a fiduciary relationship between Plaintiff and Defendant-Debtor. ... Failure on the part of Defendant-Debtor to pay the returned premium over to Plaintiff, for whatever reason, was a breach of his fiduciary duty imposed upon him as an agent by O.C.G.A. § 33-23-79(b). ... Therefore, there being no material facts in dispute, it is the finding of the Court that the debt in question is nondischargeable pursuant to § 523(a)(4).

Section 523(a)(4) requires a fiduciary relationship arising from an express or technical trust that existed before the wrongdoing; a constructive trust arising from the wrongdoing does not suffice.

First National Bank of Boston v. Overmyer (In Re Overmyer) · filed 1985-10-25(a)(4)

Historically, in order to bar the discharge in bankruptcy of liabilities incurred as the result of a fiduciary’s fraud, the fiduciary relationship had to arise out of an express or technical trust rather than one implied in law. ... The Davis case continues to be applicable under the successor to § 17(a)(4) now codified at 11 U.S.C. § 523(a)(4) (1978 as amended).

Section 523(a)(4)'s fiduciary defalcation exception requires a fiduciary duty that existed before the default; a constructive trust imposed afterward does not qualify.

In Re Earl William Teichman, Debtor. Barbara F. Teichman, Cross-Appellant v. Earl William Teichman, Cross-Appellee · filed 1985-10-25(a)(4)

This is not sufficient to render the debt non-dischargeable under section 523(a)(4). That section requires the husband to have been acting in a fiduciary capacity at the time of the default.

Section 523(a)(4) excepts from discharge a debt arising from a broker’s diversion of funds held in a statutory trust when a corporate officer knew or should have known of the diversion.

Currin v. Currin · filed 1985-12-19(a)(4)

Thus, PMP’s diversion of trust assets for its own use was a breach of trust, and as such, constitutes a defalcation under 11 U.S.C. § 523(a)(4). ... As a result, Currin either knew or should have known that the owners’ assets were being misappropriated and his defense that he was unaware of the transfers until it was too late is neither credible nor exculpating. ... For the foregoing reasons, it is ORDERED that the debt owed by Ptarmigan Mountain Properties to Sidney W. Anderson, Jr., et al., is non-dischargeable in Timothy Lee Currin’s individual bankruptcy proceeding.

Section 523(a)(4) makes a Chapter 11 debtor in possession’s unauthorized use of cash collateral presumptively nondischargeable, but expenditures proven to preserve the secured creditor’s collateral are deducted from the debt.

Green River Production Credit Ass'n v. Alvey (In Re Alvey) · filed 1985-12-31(a)(4)

By separate order we will provide that the indebtedness of William and Brenda Alvey to the Green River Production Credit Association is nondischargeable under 11 U.S.C. § 523(a)(4) in a maximum amount of $6829, from which amount shall be subtracted those expenditures represented by individual checks proven by the Alveys to have been made for the preservation and benefit of the PCA’s collateral.

Section 523(a)(4) treats California partners as fiduciaries because state law makes them trustees over partnership assets.

Bankr. L. Rep. P 70,935 Vance L. Ragsdale v. John Frederick Haller AKA Fred Haller · filed 1986-01-13(a)(4)

If state law makes clear that a partner necessarily is a trustee over partnership assets for all purposes, then that partner is a fiduciary within the narrow meaning of § 523(a)(4).

Section 523(a)(4) excepts from discharge funds a debtor misused or dissipated while holding them in a fiduciary capacity, even if the funds were not clearly alimony or support.

In Re Radin · filed 1986-02-06(a)(4)

The court further holds that the monies due from debtor to Isabel Radin are not discharged, pursuant to 11 U.S.C. § 523(a)(4), because of debtor’s blatant misuse or dissipation of the funds, which he was holding in a fiduciary capacity. This determination remains unchanged even to the portion of the $86,000, which may not clearly be in the nature of alimony or support.

Section 523(a)(4) excepts a debt from discharge when an express trust existed, fraud or defalcation caused the debt, and the debtor was acting as a fiduciary when the debt arose.

Klingman v. Levinson (In Re Levinson) · filed 1986-03-18(a)(4)

Three elements must be established for nondis-chargeability under § 523(a)(4): 1) an express trust existed; 2) the debt was caused by fraud or defalcation; and 3) the debtor acted as a fiduciary to plaintiff when the debt was created.

Section 523(a)(4) recognizes the fiduciary relationship between an Illinois attorney and client as qualifying fiduciary capacity.

Purcell v. Janikowski (In Re Janikowski) · filed 1986-05-21(a)(4)

This Court therefore concludes that the fiduciary relationship created between an attorney and client under Illinois law meets the requirements for a fiduciary relationship under Bankruptcy Code § 523(a)(4).

Section 523(a)(4) does not make an equal partner’s failure to account nondischargeable when the partnership relationship creates no express or technical trust.

Donohoe v. Hurbace (In Re Hurbace) · filed 1986-06-09(a)(4)

Thus, unless there is some new Texas case not yet reported or some additional facts not presented in the case at hand, this Court concludes that § 523(a)(4) insofar as it relates to a debtor acting in a fiduciary capacity, does not apply to failure of partners to account.

Section 523(a)(4)’s fiduciary-capacity requirement applies to technical or express trusts, not constructive trusts arising from the wrongdoing itself.

Ablan v. Weber (In Re Weber) · filed 1986-06-18(a)(4)

The “fiduciary capacity” requirement has been limited to technical or express trusts and not constructive trusts arising out of the act of wrongdoing itself.

Section 523(a)(4) covers a contractor’s misuse of funds held in an express trust created by state law.

Butler v. Weedman (In Re Weedman) · filed 1986-09-30(a)(4)

After considering Kentucky law relating to the use of funds by contractors in light of the narrow definition of fiduciary under the Bankruptcy Code, we hold that KRS 376.070 imposes an express trust upon contractors and that misuse of funds from such trusts is actionable under Section 523(a)(4) of the Bankruptcy Code.

Section 523(a)(4) makes a debt nondischargeable when a fiduciary fails to remit funds received in that capacity.

Home Insurance Co. v. McCormick (In Re McCormick) · filed 1987-02-05(a)(4)

As Defendant’s fiduciary status has been determined, Defendant has equally admitted receipt and lack of remittance. This constitutes a defalcation under § 523(a)(4) of the Bankruptcy Code.

Section 523(a)(4) makes a debt for defalcation nondischargeable when the debtor acted under an express or technical trust, which commodity trading law can create for customers.

Smith v. M & M Commodities, Inc. (In Re Smith) · filed 1987-03-11(a)(4)

However, the “fiduciary capacity” needed to make a debt non-dischargeable under § 523(a)(4) must arise from .an express or technical trust. ... The Court finds that the Act and regulations created a technical trust between Smith and his customers. ... The Court finds no error in the Bankruptcy Court’s finding that Smith’s actions constituted defalcation.

Section 523(a)(4) requires a fiduciary trust to exist before the wrongdoing; Kansas’s partner accounting statute alone does not create that fiduciary capacity.

Medved v. Novak (In Re Novak) · filed 1987-05-18(a)(4)

Therefore, K.S.A. 56-321 alone cannot serve as the basing for imposing a fiduciary duty upon Novak under § 523(a)(4).

Section 523(a)(4) makes a debt arising from defalcation nondischargeable when the debtor was already acting as a fiduciary under a trust recognized by state law.

In re Robert E. SHORT and Dolores J. Short. · filed 1987-06-02(a)(4)

Under Washington's partnership law and section 523(a)(4), Short was a fiduciary for the joint venture when he committed the defalcation.

Section 523(a)(4) treats a managing joint venturer as a fiduciary when the venture agreement and state law impose trustee duties before the defalcation.

Lewis v. Short (In re Short) · filed 1987-06-02(a)(4)

Under Washington’s partnership law and section 523(a)(4), Short was a fiduciary for the joint venture when he committed the defalcation.

Section 523(a)(4) requires a debt owed by an attorney to a client to arise from a breach of fiduciary duty; an ordinary personal loan does not suffice.

Schwalbe v. Gans (In Re Gans) · filed 1987-06-15(a)(4)

Having once established that an attorney-client relationship exists, a court must then determine whether or not the debt arose from a breach of the debtor-attorney’s fiduciary duty to the client.

Section 523(a)(4) excepts a debt for fraud or defalcation from discharge when the debtor acted in a fiduciary capacity; an insurance agent’s duty to remit premiums does not establish that capacity when the agent may commingle receipts and must remit premiums whether or not collected.

LeMars Mutual Insurance Co. v. Cutler (In Re Cutler) · filed 1987-06-23(a)(4)

If a fiduciary duty exists, then the debt is non-dischargeable under 11 U.S.C. § 523(a)(4) if fraud or defalcation is proven. ... In addition, LeMars did not require segregation of premium receipts from other funds of defendant or restrict the use of premiums received by defendant but not yet remitted. These findings are not clearly erroneous. ... The facts of the instant case are closer to Storms than to Morgan. This court finds no error in any part of the well reasoned opinion of the bankruptcy judge and determines that it could add little to other aspects of this case by a separate opinion coming to the same legally warranted conclusions.

Section 523(a)(4) does not make a debt nondischargeable for nonfraudulent diversion of construction funds under the Texas statute because that statute does not impose the required fiduciary duties.

In the Matter of Christopher Wallace Boyle, Debtor. Christopher Wallace Boyle v. Abilene Lumber, Inc. · filed 1987-06-19(a)(4)

There being no finding or evidence of fraud on Boyle’s part, nor any basis for any theory of fiduciary defalcation other than the Texas statute itself, we hold that it was error to sustain Abilene Lumber’s objection to the discharge of these debts of Boyle.