Date of Decision:
October 17, 2008
Whether Debtors' fiduciary duty to an elderly relative under two powers of attorney met the federal definition of a fiduciary under 11 U.S.C. § 523(a)(4) so as to allow entry of summary judgment for the plaintiff-bank which had obtained, as the elderly person's estate representative, a state court judgment against Debtors for their misuse of the elderly relative's assets?
Yes, summary judgment was entered for the plaintiff-bank. Debtors were a fiduciary under § 523(a)(4) because the initial power of attorney established the parameters of the fiduciary relationship and the res of the trust but did not evidence any expectation of supervision by the elderly person; the relationship was not contractual in nature; and the trust did not arise from Debtors' wrongdoing.
Full Bankruptcy Court Decision: