Case Summary:
After the Court denied the Plaintiff’s motion for summary judgment in the decision issued May 6, 2014, the Court held a trial to determine whether the defendant committed defalcation under section 523(a)(4), that is, whether he acted knowing his conduct would violate his Perishable Agricultural Commodities Act (“PACA”) duties. The Court found he had. Although the Defendant testified he did not know what PACA required of him, this testimony was not credible given his long experience in the grocery business. Additionally, every invoice the Defendant received from the Plaintiff stated the listed items were subject to a statutory trust pending receipt of full payment, putting him on notice of his duties.

Statute/Rule References:
11 U.S.C. § 523(a)(4) -- Nondischargeability - Fraud in Fiduciary Capacity

Key Terms:
Defalcation while Acting as a Fiduciary