ORDERED PUBLISHED

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re:

BRYCE PELTIER and KRISTINE DIANE 

PELTIER,

Debtors.

BAP No. OR-22-1000-FBG

Bk. No. 3:21-bk-30450-DWH

Adv. No. 3:21-ap-03018-DWH

OPINION

BRYCE PELTIER; KRISTINE DIANE 

PELTIER,

Appellants,

v.

VAN LOO FIDUCIARY SERVICES, LLC,

Appellee.

Appeal from the United States Bankruptcy Court

for the District of Oregon

David W. Hercher, Bankruptcy Judge, Presiding

Filed – August 16, 2022

Ordered Published – September 12, 2022

APPEARANCES:

Michael Fuller of OlsenDaines argued for appellants; 

Darlene Pasieczny of Samuels Yoelin Kantor LLP argued for appellee.

Before: FARIS, BRAND, and GAN, Bankruptcy Judges.

FARIS, Bankruptcy Judge:

FILED

AUG 16 2022

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT
2

INTRODUCTION

The Oregon state court entered a judgment against Kristine Diane 

Peltier and Bryce Peltier for financial elder abuse of a family member. The 

Peltiers filed for chapter 71 bankruptcy protection, and appellee Van Loo 

Fiduciary Services LLC (“Van Loo”) sought to have the judgment debt 

declared nondischargeable under §§ 523(a)(2), (4), and (6). The bankruptcy 

court entered judgment against Kristine2 on the § 523(a)(4) claim, based on 

the issue preclusive effect of the state court judgment.

Kristine appeals, arguing that issue preclusion was inappropriate

because the issues that the state court necessarily determined were not the 

same as those before the bankruptcy court. 

We disagree with the bankruptcy court’s reasoning but agree with its 

conclusion. We AFFIRM.

FACTS

A. The state court judgment

Van Loo is the court-appointed conservator for Kristine’s mother, 

Leah D. Hudson, and the personal representative for the estate of Jon W. 

Hudson, who was Mrs. Hudson’s husband and Kristine’s father.

1 Unless specified otherwise, all chapter and section references are to the 

Bankruptcy Code, 11 U.S.C. §§ 101-1532, all “Rule” references are to the Federal Rules 

of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal Rules of 

Civil Procedure.

2 We sometimes refer to Kristine and Bryce by their first names for convenience 

and clarity. We intend no disrespect.
3

In June 2020, Van Loo filed a complaint in the Oregon circuit court 

for financial elder abuse, unjust enrichment, and breach of fiduciary duty 

against Kristine, Bryce, Kristine’s sister, and her sister’s husband.

Van Loo alleged that, while the Hudsons suffered from declining 

mental and physical health, the defendants misused the Hudsons’ funds, 

credit, and assets to benefit themselves. It alleged that Kristine had 

accomplished this by abusing powers of attorney that the Hudsons had 

granted her. 

The complaint stated three claims for relief: (1) elder abuse under 

Oregon Revised Statutes (“ORS”) 124.110 against all defendants; (2) unjust 

enrichment against all defendants; and (3) breach of fiduciary duty against 

Kristine. 

The Peltiers did not respond to the complaint, and the circuit court 

entered an order of default against the Peltiers.3 After a prima facie hearing 

at which Van Loo’s principal testified, the court stated that “it’s very clear

that . . . the plaintiffs have made a prima facie showing of elder abuse, 

unjust enrichment, and a breach of fiduciary duties by the remaining 

defendants, so I do find in favor of the plaintiffs on their claims.” It did not 

offer any detailed findings or conclusions.

The circuit court granted Van Loo a limited judgment4 against the 

3 The other defendants apparently settled with Van Loo and were dismissed 

from the case.

4 A “limited judgment” under ORS 18.005(13) and Oregon Rule of Civil 
4

Peltiers on all claims for relief. Pursuant to ORS 124.100, it awarded Van 

Loo treble damages totaling $1,069,606.86 against Kristine and Bryce and 

an additional judgment against Kristine for treble damages of $887,276.16 –

exactly what Van Loo requested. It also issued a second limited judgment 

awarding Van Loo attorneys’ fees and costs and conservator fees.

B. The chapter 7 bankruptcy case and adversary proceeding

The Peltiers sought chapter 7 bankruptcy protection. Van Loo filed a 

timely complaint to determine the nondischargeability of the state court 

judgment debts pursuant to §§ 523(a)(2)(A), (4), and (6).

As to § 523(a)(4), Van Loo alleged that the Peltiers had committed 

fraud or defalcation by a fiduciary, larceny, and embezzlement. 

The Peltiers filed an answer generally denying the allegations in the 

adversary complaint.

C. Van Loo’s motion for summary judgment

Van Loo filed a motion for summary judgment on all claims. It 

argued that the state court’s findings were entitled to issue preclusive 

effect, so the judgments were nondischargeable under §§ 523(a)(2), (4), and 

(6).

The Peltiers opposed the motion for summary judgment. They 

argued that Van Loo could not establish each element of issue preclusion 

under Oregon law. The Peltiers contended that the issues were not 

Procedure 67 B is essentially the same as a judgment on fewer than all claims or parties 

under Civil Rule 54(b). 
5

identical and the issues were not “necessarily decided.” They emphasized 

that the state court had not made any findings on the record. With regard 

to § 523(a)(4), they argued that the default judgment did not establish gross 

recklessness or felonious intent necessary to a nondischargeability ruling.

After a hearing, the bankruptcy court announced that it would grant 

summary judgment against Kristine, but not Bryce, and only under 

§ 523(a)(4).

The bankruptcy court recited the five elements of issue preclusion 

under Oregon law. It noted that the Peltiers conceded that Oregon affords 

issue preclusive effect to default judgments. It also held that the Peltiers 

had a full and fair opportunity to litigate the state court proceedings and 

that issue preclusion was appropriate for this type of proceeding.

It acknowledged that, because the state court “made no specific 

findings of fact, except for its quantification of damages, it’s difficult to 

know exactly what was determined.” Therefore, to determine the issue 

preclusive effect of the default judgment, the court analyzed “which of the 

many allegations of the complaint are the minimum that the [state] Court 

had to find to enter its judgment.” 

The bankruptcy court held that issue preclusion did not bar 

relitigation of any issue under the §§ 523(a)(2)(A) and (6) claims. However, 

it held that the state court’s elder abuse findings satisfied § 523(a)(4) as to 

Kristine. It explained that § 523(a)(4) requires that the debt arose from 

either fraud or defalcation while acting in a fiduciary capacity or 
6

embezzlement or larceny. It quickly rejected embezzlement or larceny, 

because the complaint did not allege that the Peltiers feloniously took 

property from the Hudsons.

However, the bankruptcy court said that the allegations against 

Kristine aligned with defalcation while acting in a fiduciary capacity. It 

stated that Kristine was a fiduciary based on her power of attorney and 

concluded that the state court must have found defalcation.

Later, Van Loo agreed to dismiss its claims against Bryce. The 

bankruptcy court entered judgment against Kristine and declared 

nondischargeable the first limited judgment debt for $1,069,606.86 plus 

post-judgment interest. 

The Peltiers timely appealed.5 Van Loo did not cross-appeal.

JURISDICTION

The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and 

157(b)(2)(I). We have jurisdiction under 28 U.S.C. § 158.

ISSUE

Whether the bankruptcy court erred in granting Van Loo summary 

judgment on its § 523(a)(4) nondischargeability claim against Kristine.

5 Counsel for the Peltiers acknowledged at oral argument that, although both 

Bryce and Kristine filed the notice of appeal, Bryce was not a party to the appeal. Van 

Loo argues that the judgment should be affirmed as to Bryce, with costs awarded to 

Van Loo. We DENY this request, because Bryce was a prevailing party, not an 

aggrieved party, and was therefore not entitled to appeal, and Van Loo did not crossappeal that portion of the judgment.
7

STANDARDS OF REVIEW

We review de novo the bankruptcy court’s decisions to grant 

summary judgment and to except a debt from discharge. Plyam v. Precision 

Dev., LLC (In re Plyam), 530 B.R. 456, 461 (9th Cir. BAP 2015). “De novo 

review requires that we consider a matter anew, as if no decision had been 

made previously.” Francis v. Wallace (In re Francis), 505 B.R. 914, 917 (9th 

Cir. BAP 2014).

“We also review de novo the bankruptcy court’s determination that 

issue preclusion was available. If issue preclusion was available, we then 

review the bankruptcy court’s application of issue preclusion for an abuse 

of discretion.” In re Plyam, 530 B.R. at 461 (quoting Black v. Bonnie Springs 

Fam. Ltd. P’ship (In re Black), 487 B.R. 202, 210 (9th Cir. BAP 2013)).

To determine whether the bankruptcy court has abused its discretion, 

we conduct a two-step inquiry: (1) we review de novo whether the 

bankruptcy court “identified the correct legal rule to apply to the relief 

requested” and (2) if it did, we consider whether the bankruptcy court’s 

application of the legal standard was illogical, implausible, or without 

support in inferences that may be drawn from the facts in the record. 

United States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc).

“We may affirm on any ground fairly supported by the record.” 

Jimenez v. ARCPE 1, LLP (In re Jimenez), 613 B.R. 537, 543 (9th Cir. BAP

2020).

DISCUSSION
8

Kristine argues that the bankruptcy court erred in granting Van Loo

summary judgment under § 523(a)(4) because it was inappropriate to 

afford the state court judgment issue preclusive effect.

Under Civil Rule 56(a), made applicable by Rule 7056, summary 

judgment is appropriate when “there is no genuine dispute as to any 

material fact and the movant is entitled to judgment as a matter of law.” 

The movant bears the initial burden of demonstrating an absence of a 

genuine issue of material fact. See Matsushita Elec. Indus. Co. v. Zenith Radio 

Corp., 475 U.S. 574, 585 (1986). We must view the evidence in the light most 

favorable to the non-moving party and draw all justifiable inferences in her

favor. Fresno Motors, LLC v. Mercedes Benz USA, LLC, 771 F.3d 1119, 1125 

(9th Cir. 2014).

We hold that the record before the bankruptcy court was sufficient to 

support summary judgment on Van Loo’s § 523(a)(4) claim.

A. Issue preclusion in nondischargeability proceedings

Issue preclusion applies in nondischargeability actions under 

§ 523(a). Grogan v. Garner, 498 U.S. 279, 284 n.11 (1991). 

Federal courts must give full faith and credit to state court 

judgments. 28 U.S.C. § 1738. This means that the bankruptcy court was 

required to give the Oregon state court’s judgment the same preclusive 

effect it would be given by other Oregon courts. See Far Out Prods., Inc. v. 

Oskar, 247 F.3d 986, 993 (9th Cir. 2001). We thus apply Oregon issue 

preclusion law.
9

Under Oregon law, “[i]ssue preclusion applies to preclude 

relitigation of an issue or fact when that issue or fact has been determined 

by a valid and final determination in a prior proceeding.” McCall v. Dynic 

USA Corp., 906 P.2d 295, 297 (Or. Ct. App. 1995) (cleaned up). Issue 

preclusion is appropriate if five required elements are met:

1. The issue in the two proceedings is identical.

2. The issue was actually litigated and was essential to a final 

decision on the merits in the prior proceeding.

3. The party sought to be precluded has had a full and fair 

opportunity to be heard on that issue.

4. The party sought to be precluded was a party or was in 

privity with a party to the prior proceeding [and]

5. The prior proceeding was the type of proceeding to which 

this court will give preclusive effect.

Nelson v. Emerald People’s Util. Dist., 862 P.2d 1293, 1296-97 (Or. 1993)

(citations omitted). “[T]he party asserting issue preclusion bears the burden 

of proof on the first, second, and fourth factors, after which the party 

against whom preclusion is asserted has the burden on the third and fifth 

factors.” Barackman v. Anderson, 167 P.3d 994, 999 (Or. Ct. App. 2007).

The fourth and fifth elements require no discussion. There is no 

doubt that Kristine was a party to both the state court case and the 

adversary proceeding and the state court case was the type of proceeding 

which may be afforded issue preclusive effect.
10

The third element requires only brief consideration. Kristine argued 

in the bankruptcy court that she was not afforded a full and fair 

opportunity to litigate the state court proceeding because she could not 

afford to obtain counsel. But under Oregon law, a party’s choice not to 

respond to a complaint, or the party’s inability to afford counsel, is not a 

denial of a full and fair opportunity to be heard for purposes of issue 

preclusion. See id. at 1000 n.3 (“The question under the third factor is 

whether plaintiff was denied the opportunity to adduce the evidence or 

make the arguments that she needed to prevail on her claim.”); Skeen v. 

Dep't of Hum. Res., 17 P.3d 526, 528-29 (Or. Ct. App. 2000) (Litigants are

denied “full and fair opportunity” to be heard under Nelson if they

establish either that “the procedures provided for . . . are insufficient to 

justify the application of issue preclusion or that they were not permitted to 

use those procedures.”). Therefore, the third element was satisfied.

The first and second elements require more attention: (1) whether the 

issues in the two proceedings were identical; and (2) whether the issues 

were essential to the state court’s judgment.

Kristine points out that the state court made no express findings. But 

this does not deprive its judgment of issue preclusive effect. Under Oregon 

law, a judgment has issue preclusive effect as to all issues that the court 

expressly decided or were necessary to the court’s judgment. Chase v. 

Gordon, Aylworth & Tami, P.C., Case No. 3:18-cv-568-AC, 2019 WL 5085417,

at *7 (D. Or. Oct. 10, 2019) (“In Oregon, the doctrine of res judicata, 
11

including collateral estoppel, as to matters essential to the judgment, 

applies to judgments by default. To satisfy the ‘actually litigated and 

essential to a final decision’ requirement, a prior court’s resolution of an 

issue must either be apparent from the face of a judgment or order or, if not 

apparent from the face of a judgment or order, must have been necessary to 

the resolution of the prior adjudication.” (cleaned up)); Sturgis v. Asset 

Acceptance, LLC, No. 3:15-CV-00122-AC, 2016 WL 223708, at *3 (D. Or. Jan. 

19, 2016) (“[C]ourts in Oregon apply issue preclusion to cases where the 

first case ended in a default judgment and the defendant did not appear in 

court or otherwise take advantage of the opportunity to ‘actually litigate’ 

the issues at stake. Because an issue may be deemed ‘actually litigated’ in 

an action where a default judgment is entered after one party fails to 

appear or otherwise actually litigate the pertinent issue, analysis of this 

element should focus on whether the issue was ‘essential to the [first] 

judgment.’” (citation omitted)).

Therefore, we will describe the required elements of § 523(a)(4) and 

compare those elements with what the state court must have necessarily 

decided to support its judgment on the statutory elder abuse claim. 

B. Elements of § 523(a)(4)

Section 523(a)(4) precludes the discharge of debts “for fraud or 

defalcation while acting in a fiduciary capacity, embezzlement, or larceny.”

In other words, because “while acting in a fiduciary capacity” does not 

modify “embezzlement” or “larceny,” and the statute is written in the 
12

disjunctive, a debt is nondischargeable if it was incurred due to (1) fraud or 

defalcation while acting in a fiduciary capacity, (2) embezzlement, or 

(3) larceny. See Bullock v. BankChampaign, N.A., 569 U.S. 267, 275 (2013)

(“The statutory provision makes clear that [embezzlement and larceny] 

apply outside of the fiduciary context[.]”); Transamerica Com. Fin. Corp. v. 

Littleton (In re Littleton), 942 F.2d 551, 555 (9th Cir. 1991) (“Clearly, a debt 

can be nondischargeable for embezzlement under 523(a)(4) without the 

existence of a fiduciary relationship.”).

1. Fraud or defalcation

Fraud or defalcation while acting in a fiduciary capacity under 

§ 523(a)(4) requires that “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.” Mele v. Mele (In re Mele), 501 B.R. 

357, 363 (9th Cir. BAP 2013) (quoting Otto v. Niles (In re Niles), 106 F.3d 

1456, 1459 (9th Cir. 1997)).

“Defalcation” “includes a culpable state of mind requirement akin to 

that which accompanies application of the other terms in the same 

statutory phrase. We describe that state of mind as one involving 

knowledge of, or gross recklessness in respect to, the improper nature of 

the relevant fiduciary behavior.” Bullock, 569 U.S. at 269.

“To prevail on a nondischargeability claim under § 523(a)(4) the 

plaintiff must prove not only the debtor’s fraud or defalcation, but also that 

the debtor was acting in a fiduciary capacity when the debtor committed 
13

the fraud or defalcation.” Honkanen v. Hopper (In re Honkanen), 446 B.R. 373, 

378 (9th Cir. BAP 2011). “The fiduciary relationship must be one arising 

from an express or technical trust that was imposed before and without 

reference to the wrongdoing that caused the debt. We consult state law to 

determine whether the requisite trust relationship exists.” In re Mele, 501 

B.R. at 363 (cleaned up).

2. Embezzlement and larceny

Embezzlement is defined as “the fraudulent appropriation of 

property by a person to whom such property has been entrusted or into 

whose hands it has lawfully come.” In re Littleton, 942 F.2d at 555 (quoting 

Moore v. United States, 160 U.S. 268, 269 (1885)). Thus, the proponent of the 

nondischargeability determination must prove: “(1) property rightfully in 

the possession of a nonowner; (2) nonowner’s appropriation of the 

property to a use other than which [it] was entrusted; and 

(3) circumstances indicating fraud.” Id. (quoting Nat’l Bank of Com. of Pine 

Bluff v. Hoffman (In re Hoffman), 70 B.R. 155, 162 (Bankr. W.D. Ark. 1986)).

We have stated that “circumstances indicating fraud, as an element of 

embezzlement, is not coterminous with an intent to defraud . . . .” Newman 

v. Lee (In re Newman), BAP Nos. CC-21-1228-GTL, CC-21-1250-GTL, 2022 

WL 2100905, at *7 (9th Cir. BAP June 10, 2022); see Phillips v. Estate of Ronald 

M. Arnold (In re Phillips), BAP No. WW-15-1178-TaKuJu, 2016 WL 7383964, 

at *5 (9th Cir. BAP Dec. 16, 2016) (“The finding required for a 

determination of § 523(a)(4) embezzlement is that Debtor’s actions 
14

indicated fraud. Such a determination is not synonymous with an intent to 

defraud as required under § 523(a)(2)(A).”).

As for scienter, the U.S. Supreme Court has stated that 

“embezzlement requires a showing of wrongful intent.” Bullock, 569 U.S. at

274. The Court noted that wrongful intent in this context has been 

described as “moral turpitude or intentional wrong” or “felonious intent.”

Id. (quoting Neal v. Clark, 95 U.S. 704, 709 (1877); Moore, 160 U.S. at 269-70).

Further, in the criminal context, the Ninth Circuit has relied on the Seventh 

Circuit’s statement that “cases indicate that the ‘felonious’ intent with 

which embezzlement is committed consists of the intent to appropriate or 

convert the property of the owner; the simultaneous intent to return the 

property or to make restitution does not make the offense any less 

embezzlement.” United States v. Anderson, 850 F.2d 563, 565 (9th Cir. 1988)

(quoting United States v. Waronek, 582 F.2d 1158, 1161 n.4 (7th Cir. 1978)).

Larceny is the “felonious taking of another’s personal property with 

intent to convert it or deprive the owner of the same.” Ormsby v. First Am. 

Title Co. of Nev. (In re Ormsby), 591 F.3d 1199, 1205 (9th Cir. 2010) (quoting 4 

Collier on Bankruptcy ¶ 523.10[2] (15th ed. rev. 2008)). “Felonious is 

defined as ‘proceeding from an evil heart or purpose; malicious; villainous 

. . . Wrongful; (of an act) done without excuse of color of right.’” Id. at 1205 

n.4 (quoting Elliott v. Kiesewetter (In re Kiesewetter), 391 B.R. 740, 748 (Bankr.

W.D. Pa. 2008)).

There is only one difference between embezzlement and larceny: for 
15

embezzlement, the perpetrator initially had the right to possess property 

and then stole it; while for larceny, the perpetrator stole property that the 

perpetrator never had a right to possess. Hopper v. Lewis (In re Lewis), 551 

B.R. 41, 50 (Bankr. E.D. Cal. 2016) (“Larceny is distinguished from 

embezzlement in that the original taking of the property was unlawful.”

(citation omitted)). The offenses of embezzlement and larceny require 

essentially the same mental state. As the Supreme Court held in Bullock, 569 

U.S. at 269, the scienter required for the three offenses described in 

§ 523(a)(4) – fiduciary fraud and defalcation, embezzlement, and larceny –

are “akin,” or closely related, to each other. See Urban v. BSC West, LLC (In 

re Urban), BAP No. SC-13-1047-PaJuKu, 2014 WL 1492717, at *14 (9th Cir. 

BAP Apr. 16, 2014) (noting that Bullock “observed that the ‘linquistic 

neighbors’ of defalcation – larceny and embezzlement – have always 

required felonious intent. . . . [U]nder the noscitur a sociis rule, the Supreme 

Court decided that, for an exception to discharge, a defalcation, like 

fiduciary fraud, larceny and embezzlement, required a culpable state of 

mind.”). We see no reason why the offenses of larceny and embezzlement

should require different mental states.

C. Elements of elder abuse under ORS 124.100

The state court entered judgment on a claim for statutory elder 

abuse.6 ORS 124.100(2) provides that “[a] vulnerable person who suffers 

6 We agree with the bankruptcy court that the state court’s findings concerning 

unjust enrichment and breach of fiduciary duty were not entitled to issue preclusive 
16

injury, damage or death by reason of physical abuse or financial abuse may 

bring an action against any person who has caused the physical or financial 

abuse or who has permitted another person to engage in physical or 

financial abuse.” Financial abuse occurs “[w]hen a person wrongfully takes 

or appropriates money or property of a vulnerable person, without regard 

to whether the person taking or appropriating the money or property has a 

fiduciary relationship with the vulnerable person.” ORS 124.110(1)(a).7

Oregon courts have recognized that “there are four elements to a 

claim for financial abuse of an elderly or incapacitated person: There must 

be ‘(1) a taking or appropriation (2) of money or property (3) that belongs 

to an elderly or incapacitated person, and (4) the taking must be 

wrongful.’” Gibson v. Bankofier, 365 P.3d 568, 577-78 (Or. Ct. App. 2015)

(quoting Church v. Woods, 77 P.3d 1150, 1153 (Or. Ct. App. 2003)).

Oregon courts have relied on the “ordinary” dictionary definition of 

effect. Unjust enrichment does not necessarily require a culpable mind. See Larisa’s Home 

Care, LLC v. Nichols-Shields, 404 P.3d 912, 921 (Or. 2017) (declining to adopt a precise test 

for unjust enrichment or impose a state-of-mind requirement). Similarly, intent is not an 

element of a breach of fiduciary duty claim under Oregon law. See Chapman v. Bond (In 

re Bond), 548 B.R. 570, 577 n.5 (Bankr. D. Or. 2016) (“There is no intent or bad faith 

element needed to establish the [breach of fiduciary duty] claim . . . .” (citation 

omitted)). Further, as we have noted, “fiduciary capacity” under § 523(a)(4) refers only 

to an express trust, not to the wide range of relationships that can support a “fiduciary 

duty” under state law. See Ragsdale v. Haller, 780 F.2d 794, 796 (9th Cir. 1986) (“The 

broad, general definition of fiduciary – a relationship involving confidence, trust and 

good faith – is inapplicable in the dischargeability context.”); In re Mele, 501 B.R. at 363.

7 ORS 124.110(1) also includes other types of financial elder abuse, but they are 

inapplicable to the present case. 
17

“take”: “to transfer into one’s own keeping [or to] enter into or arrange for 

possession, ownership, or use of[.]” Church, 77 P.3d at 1153 (quoting 

Webster’s Third New Int’l Dictionary 2330 (1993)).

Similarly, “appropriate” is not defined, but Oregon courts have relied 

on the “ordinary” definition of the word. The District Court for the District 

of Oregon considered the Oregon appellate courts’ use of the term and 

relied on the dictionary definition (“to claim or use as if by an exclusive 

preeminent right”) and the definition in the companion criminal statute (to 

“[e]xercise control over property of another, . . . permanently or for so 

extended a period or under such circumstances as to acquire the major 

portion of the economic value or benefit of such property”). Russi v. 

Wissenback, No. 6:18-CV-01028-AA, 2019 WL 1965830, at *3 (D. Or. Apr. 28, 

2019) (quoting Webster’s Third New Int’l Dictionary 160 (2002); ORS 

164.005(1)).

Additionally, the plaintiff must show that the defendant took or 

appropriated money or property “wrongfully,” meaning “in pursuit of an 

improper motive or by improper means. A defendant’s motives or means 

may be wrongful by reason of a statute or other regulation, or a recognized 

rule of common law, or perhaps an established standard of a trade or 

profession.” Gibson, 365 P.3d at 578 (cleaned up); see Church, 77 P.3d at 1153

(“Improper means, for example, include ‘violence, threats, intimidation, 

deceit, misrepresentation, bribery, unfounded litigation, defamation and 

disparaging falsehood.’ The use of undue influence also constitutes an 
18

‘improper means,’ in that it involves the procurement of an unfair 

advantage.” (citation omitted)).

D. Comparison of issues in state court with issues in bankruptcy court

The bankruptcy court held that the elder abuse claim could not 

satisfy the larceny or embezzlement element of § 523(a)(4) but that it 

satisfied the element of “defalcation while acting in a fiduciary capacity.” 

We disagree with the bankruptcy court’s reasoning but agree that it was 

appropriate to afford the elder abuse ruling issue preclusive effect.

In order to enter judgment on the statutory elder abuse claim, the 

state court had to find that Kristine (1) took or appropriated (2) money or 

property (3) that belongs to Mr. or Mrs. Hudson, who was incapacitated, 

and (4) the taking was wrongful. See Gibson, 365 P.3d at 577-78. But the 

court did not need to find that Kristine was a fiduciary for the Hudsons: 

ORS 124.110(1)(a) explicitly states that financial elder abuse is actionable 

“without regard to whether the person taking or appropriating the money 

or property has a fiduciary relationship with the vulnerable person.” In 

contrast, the “fraud or defalcation” portion of § 523(a)(4) requires a finding 

that Kristine committed fraud or defalcation while acting as the Hudsons’ 

fiduciary. Thus, a finding of a fiduciary relationship (or that Kristine

violated her fiduciary duties) was not essential to the state court judgment 

based on statutory elder abuse.

The bankruptcy court focused on the allegations of the complaint, 

especially the allegation that Kristine abused the powers of attorney that 
19

her mother and father had granted. At oral argument before the Panel, Van 

Loo’s counsel took this one step further by contending that, because 

Kristine did not answer the complaint, its allegations were deemed 

admitted. This approach misses the mark because the preclusive effect of a 

judgment does not depend on what the plaintiff alleged and proved; 

rather, it depends on what the court expressly found or, if there are no 

express findings, what it had to find to support its judgment. See Chase, 

2019 WL 5085417, at *7. Because ORS 124.110(1)(a) does not require the 

existence of a fiduciary relationship, a finding of a fiduciary relationship 

was not “essential” to the state court’s judgment.8

But the state court judgment does satisfy the “larceny” and

“embezzlement” portions of § 523(a)(4). 

The conduct proscribed by ORS 124.110(1)(a) is the same as either 

“larceny” or “embezzlement” under § 523(a)(4). To support its judgment 

for statutory elder abuse, the state court must have found that Kristine 

either “took” or “appropriated” the Hudsons’ money or property. See

Gibson, 365 P.3d at 578. The conduct involved in the offense of larceny is a 

“taking” of the property of another; embezzlement requires a 

“[mis]appropriation” of property. The match is exact. 

8 We also note that, even if Van Loo’s allegations were determinative, the state 

court could have found elder abuse based on allegations in the complaint that were 

apparently accomplished independent of the powers of attorney, such as the 

appropriation of four automobiles, the mismanagement of the Hudsons’ business, and 

the execution of a future receivables contract.
20

Similarly, there is no discernable difference between the mental states 

required by the Oregon elder abuse statute and “larceny” and 

“embezzlement” under § 523(a)(4). Under the Oregon statute, the conduct 

must be “wrongful,” meaning that it was undertaken with “an improper

motive or by improper means,” such as by deceit, misrepresentation, or 

undue influence. Gibson, 365 P.3d at 578; Church, 77 P.3d at 1153. Under 

§ 523(a)(4), embezzlement and larceny require “wrongful” or “felonious” 

intent, Bullock, 569 U.S. at 274, similar to “a culpable state of mind . . . 

involving knowledge of, or gross recklessness in respect to, the improper 

nature of the relevant . . . behavior[,]” id. at 269. Although the words of 

these definitions are not identical, in substance we see no daylight between 

them.

Thus, the financial elder abuse claim presented issues “identical” to

larceny and embezzlement under § 523(a)(4) that were “essential” to the 

state court judgment.

CONCLUSION

The bankruptcy court did not err in granting Van Loo summary 

judgment on its § 523(a)(4) claim against Kristine. We AFFIRM.