Court Opinion

ID: 992364
Source: CourtListenerOpinion
Date Created: 2013-07-03 23:50:57.441844+00
Date Added: 2024-06-11T15:10:22.071141
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In Re: AUGUST S. DEITZ, JR.,
Debtor.

AUGUST S. DEITZ, JR.,
Plaintiff-Appellant,                                                No. 96-2212

v.

DONALD DEITZ; NORMA EDENS;
GENEVIEVE PROMITICO,
Defendants-Appellees.

Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Benson E. Legg, District Judge.
(CA-95-2099-L, BK-93-5-5612-SD, AP-93-5495-SD)

Argued: May 8, 1997

Decided: June 11, 1997

Before MURNAGHAN and HAMILTON, Circuit Judges, and
CURRIE, United States District Judge for the
District of South Carolina, sitting by designation.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Peter Baldwin Turney, Baltimore, Maryland, for Appel-
lant. Anthony Peter Palaigos, BLUM, YUMKAS, MAILMAN, GUT-
MAN & DENICK, P.A., Baltimore, Maryland, for Appellees. ON
BRIEF: Tammy C. Drescher, BLUM, YUMKAS, MAILMAN,
GUTMAN & DENICK, P.A., Baltimore, Maryland, for Appellees.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Appellant August S. Deitz, Jr., appeals the decision of the district
court affirming the holding of the bankruptcy court that principles of
collateral estoppel bar him from relitigating the issue of defalcation
after state courts have found him to have breached his fiduciary duties
as personal representative.

I. FACTS

August S. Deitz, Sr. ("Decedent") died on April 22, 1986. An estate
for Decedent ("Estate") was duly admitted for probate with the regis-
ter of Wills for Baltimore County. August S. Deitz, Jr. ("Debtor") was
appointed personal representative of the Estate and served in that
capacity throughout the duration of the Estate. Peter B. Turney
("Turney"), counsel for Debtor in this appeal, was hired by Debtor in
late 1987 to act as Debtor's attorney in his capacity as personal repre-
sentative.

The total value of the Estate was estimated at $158,000, which con-
sisted of three separate parcels of real estate and various personal
property. One of the real estate parcels is a five and one half acre tract
located off Inwood Avenue (the "Property").

The relevant portions of Decedent's Last Will and Testament cal-
led for distribution of the Property as follows: one acre to Norma
Edens, one acre to Genevieve Promitico, two acres to Donald Deitz

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and one half acre to Debtor. Prior to Decedent's death, the Property
had not been subdivided into separate and distinct parcels or lots that
could accommodate the distribution. Litigation in state court, result-
ing in judgments against Turney and Debtor, stemmed from their
fruitless efforts to subdivide the Property.

II. STATE COURT PROCEEDINGS

On April 8, 1992, the Orphan's Court of Baltimore County found
that both Debtor and Turney had acted in bad faith. Debtor and
Turney were ordered to file a final administrative account and to
reimburse petitioners' fees. They appealed to the Circuit Court for
Baltimore County which heard the matter de novo and entered judg-
ment against Debtor and Turney following a two-day trial. Specifi-
cally, the Circuit Court held that Debtor and Turney had breached
their fiduciary duties to appellees and entered judgment against them
totaling $15,439.90. On appeal of that order, the Court of Special
Appeals of Maryland affirmed the Circuit Court in an unreported
decision.

Upon Debtor and Turney's motion for reconsideration, the Court
of Special Appeals vacated only the award of attorney's fees and
remanded to Circuit Court finding: 1) confusion as to the proper
period of time for which to assess attorney's fees; and 2) no explicit
finding that Debtor had acted in bad faith without substantial justifica-
tion, a prerequisite for award of attorney's fees. Pursuant to this man-
date, the Circuit Court entered an order reducing the award of
attorney's fees from $7,905 to $4,500.

Debtor and Turney again appealed to the Court of Special Appeals
which affirmed and denied Debtor and Turney's subsequent motion
for reconsideration. Next, Debtor and Turney filed a petition for a
writ of certiorari to the Court of Appeals of Maryland, which denied
the petition on October 10, 1996.

III. FEDERAL PROCEEDINGS

In the middle of his state court challenges, Debtor filed a Chapter
7 bankruptcy petition on August 18, 1993, and a complaint to recover

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$300 in wages garnished by appellees. Appellees filed an answer and
counterclaim alleging that the Circuit Court judgment was not dis-
chargeable as the underlying debt was incurred by virtue of Debtor's
breach of fiduciary duty. On cross motions for summary judgment,
the Bankruptcy Court denied Debtor's motion to recover garnished
wages and granted appellees' counterclaim to determine dischargea-
bility of debt, holding that the debt was not dischargeable under Sec-
tion 523(a)(4) of the Bankruptcy Code. On appeal, the district court
affirmed noting that principles of collateral estoppel apply in nondis-
chargeability proceedings and bar appellant's relitigation of the defal-
cation issue.

Based upon the reasons outlined in the memorandum accompany-
ing the district court's order, we affirm.

AFFIRMED

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