Case Summary:
Defendant Gee was a contractor hired to perform work on a home in Pardeeville. Gee hired Plaintiffs H&M and MDA as subcontractors for all the electrical and plumbing materials and services on the home. The homeowners paid money into an escrow fund, from which Gee made three withdrawals. Gee did not pay Plaintiffs in full and they sued him for theft by contractor, breach of contract, among other allegations. The state court entered default judgment against him for breach of contract but did not make findings as to the other claims. Plaintiffs moved for summary judgment on their 11 U.S.C. § 523(a)(2)(A), (a)(4), and (a)(6) claims. The Court denied summary judgment as to all three claims. While the state court judgment was binding, it did not make any findings as to Gee’s intent. Plaintiffs failed to identify a false representation made with the intent to deceive required under section 523(a)(2)(A). Similarly, while Gee was a fiduciary of a trust, the fact that he failed to pay Plaintiffs the full contract amount did not by itself prove fraud or defalcation under section 523(a)(4). Finally, the state court findings did not show Gee acted with the requisite malice needed to render a debt nondischargeable under section 523(a)(6).

Statute/Rule References:
11 U.S.C. § 523(a)(2)(A) -- Nondischargeability – False Pretenses, False Representation or Fraud
11 U.S.C. § 523(a)(4) -- Nondischargeability – Fraud or Defalcation in Fiduciary Capacity
11 U.S.C. § 523(a)(6) -- Nondischargeability – Willful and Malicious Injury
Wis. Stat. § 779.02(5) -- Theft by Contractor

Key Terms:
Actual Fraud
Defalcation while Acting as a Fiduciary
False Representation
Theft by Contractor
Willful and Malicious - Defined