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2. Fiduciary capacity
Board of Trustees of Ohio Carpenters' Pension Fund v. Bucci (In re Bucci), 493 F.3d 635 (6th Cir. 2007) (Failure to remit employer contributions to ERISA qualified funds was dischargeable because fiduciary capacity under ERISA was not sufficient for S 523(a)(4) purposes and if trust arose it was after the failure to remit. "A 'defalcation' encompasses not only embezzlement and misappropriation by a fiduciary, but also the 'failure to properly account for such funds.' A debt is nondischargeable as a defalcation when the preponderance of the evidence establishes: '(1) a preexisting fiduciary relationship; (2) breach of that fiduciary relationship; and (3) a resulting loss.' The Sixth Circuit 'construes the term 'fiduciary capacity' found in the defalcation provision of S 523(a)(4) more narrowly than the term is used in other circumstances.' . . . [The court has] limited the application of the defalcation provision to express or technical trusts and refused to extend it to constructive or implied trusts imposed by operation of law as a matter of equity. . . . [T]he defalcation provision applies only to express or technical trusts. . . . [I]t does not apply to someone who merely fails to meet an obligation under a common law fiduciary relationship. . . . [T]he defalcation provision applies to 'only those situations involving an express or technical trust relationship arising from placement of a specific res in the hands of the debtor.' To establish the existence of an express or technical trust, a creditor must demonstrate: '(1) an intent to create a trust;
(2) a trustee; (3) a trust res; and (4) a definite beneficiary.' . . . [I]t is clear in this circuit that a statute may create a trust for purposes of S 523(a)(4) if that statute defines the trust res, imposes duties on the trustee, and those duties exist prior to any act of wrongdoing. . . . [T]he Sixth Circuit has repeatedly construed 'the term 'fiduciary capacity' found in the defalcation provision of S 523(a)(4) more narrowly than the term is used in other circumstances.' This definition does not match the definition of an ERISA fiduciary. . . . '[I]t is not enough that, by the very act of wrongdoing out of which the contested debt arose, the bankrupt has become chargeable as a trustee ex maleficio. He must have been a trustee before the wrong and without reference thereto.' . . .'[T]he requisite trust relationship must exist prior to the act creating the debt and without reference to it.' . . . The act that created the debt-[the debtor's] breach of his contractual obligation to pay the employer contributionsis also the exercise of control that the Funds allege made [the debtor] an ERISA fiduciary. But for a trust relationship to satisfy S 523(a)(4), the alleged fiduciary must have duties that preexist the act creating the debt. . . . [I]f an employer failing to pay contributions becomes an ERISA fiduciary only after the contributions are due, then the trust relationship springs from the act from which the debt arose. Such a trust relationship does not create an express or technical trust for purposes of S 523(a)(4). . . . [The debtor] had only a contractual obligation to pay the employer contributions. This is not enough, for 'the debtor must hold funds in trust for a third party to satisfy the fiduciary relationship element of the defalcation provision of S 523(a)(4).'").
Fowler & Peth, Inc. v. Regan (In re Regan), 477 F.3d 1209 (10th Cir. 2007) (After certification of question to the Colorado Supreme Court, the Tenth Circuit reaffirmed its decision in Mangum v.
