Opinion ID: 730866
Heading Depth: 3
Heading Rank: 3

Heading: Fraud as a fiduciary

Text: 43 The Bankruptcy Court alternatively found under 11 U.S.C. § 523(a)(4) that debtor defrauded creditor while acting in a fiduciary capacity. The term fiduciary under section 523(a)(4) applies only to express or technical trusts and does not extend to implied trusts, which are imposed on transactions by operation of law as a matter of equity. Riden v. Sigler (In re Sigler), 196 B.R. 762, 764 (Bankr.W.D.Ky.1996) (quoting Carlisle Cashway, Inc. v. Johnson (In re Johnson), 691 F.2d 249, 251 (6th Cir.1982)). Debtor argues that creditor failed to prove the existence of an express trust under state law, and that the District Court and Bankruptcy Court improperly relied upon In re Denton Coal Co., 20 B.R. 281, 283 (Bankr.W.D.Ky.1982), which held that Kentucky law imposes a constructive trust upon a party who purchases land for his individual account partially through funds provided by another party. We do not need to address whether creditor proved the existence of an express trust, however, because the proper findings by the lower courts that debtor incurred a nondischargeable debt through both false pretenses and embezzlement already provide independent reasons to affirm.