Opinion ID: 77369
Heading Depth: 2
Heading Rank: 3

Heading: Bankruptcy Case and Adversary Proceeding

Text: 4 Meanwhile, on December 1, 2000, the Debtor had filed a voluntary petition for relief under Chapter 7 of Title 11 of the United States Code (the Bankruptcy Code). On February 26, 2001, the Guerras filed in the bankruptcy case an adversary proceeding against the Debtor. The Guerras' adversary complaint asserted that, pursuant to Florida Statutes § 458.320, the Debtor was obligated to establish a fund to pay claims arising out of his rendering of, or failure to render, medical care and services, and that the Debtor had a fiduciary duty to his patients to maintain a claims fund of $250,000 per claim or $750,000 in the aggregate. The Guerras alleged that the Debtor had not established the required fund and thus would not be able to pay the malpractice judgment against him. The Guerras essentially alleged that they had a non-dischargeable claim against the Debtor for the amount of the required claims fund to apply to the malpractice award. 5 More specifically, the Guerras asserted that their claim was non-dischargeable pursuant to § 523(a)(4) of the Bankruptcy Code. See 11 U.S.C. § 523(a)(4). Section 523(a)(4) provides that debts for fraud or defalcation while acting in a fiduciary capacity are non-dischargeable. 1 6 On March 21, 2001, the bankruptcy court entered an order abating the adversary proceeding pending the resolution of the state court litigation. On September 9, 2002, the Debtor filed a motion to dismiss the Guerras' adversary complaint for failure to state a claim upon which relief could be granted or, in the alternative, for summary judgment. The Debtor argued, inter alia, that Florida Statutes § 458.320 is a regulatory statute and does not create a fiduciary duty or any technical trust between the Debtor and the Guerras, and thus the § 523(a)(4) exception to discharge does not apply to any debt between the Debtor and the Guerras. 2 After a hearing, the bankruptcy court granted the Debtor's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief could be granted. 7 The Guerras appealed the bankruptcy court's dismissal to the district court, and the district court affirmed. The Guerras now appeal to this Court.