Court Opinion

ID: 4440769
Source: CourtListenerOpinion
Date Created: 2019-09-23 20:00:33.750807+00
Date Added: 2024-06-11T14:19:42.427284
License: Public Domain

FILED
                            NOT FOR PUBLICATION
                                                                            SEP 20 2019
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

THOMAS MISIK,                                    No.   18-55750

              Appellant,                         D.C. No. 2:17-cv-05629-AB

 v.
                                                 MEMORANDUM*
THOMAS D’ARCO,

              Appellee.

                    Appeal from the United States District Court
                       for the Central District of California
                    Andre Birotte, Jr., District Judge, Presiding

                           Submitted September 12, 2019**
                                Pasadena, California

Before: RAWLINSON, IKUTA, and BENNETT, Circuit Judges.

      Thomas Misik appeals the district court’s order affirming the bankruptcy

court’s judgment in favor of Thomas D’Arco in Misik’s action alleging D’Arco’s

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
debt to him was nondischargeable in bankruptcy under 11 U.S.C. § 523. We have

jurisdiction under 28 U.S.C. § 158(d), and we affirm.

      The bankruptcy court’s finding that D’Arco lacked fraudulent intent because

he intended to repay the loan funds and spent all funds in furtherance of the

development project was not clearly erroneous. See In re Slyman, 234 F.3d 1081,

1085 (9th Cir. 2000). Therefore, the bankruptcy court did not err in concluding

D’Arco’s debt was not excepted from discharge under 11 U.S.C. § 523(a)(2)(A).

For the same reason, the bankruptcy court did not err in concluding D’Arco’s debt

was not excepted from discharge under 11 U.S.C. § 523(a)(2)(B). See In re

Candland, 90 F.3d 1466, 1469 (9th Cir. 1996).

      The bankruptcy court also did not err in concluding D’Arco’s debt was not

excepted from discharge under 11 U.S.C. § 523(a)(4). The bankruptcy court did

not clearly err in finding D’Arco spent all funds in furtherance of the project.

Therefore, even assuming D’Arco was acting in a fiduciary capacity for purposes

of 11 U.S.C. § 523(a)(4), Misik failed to prove that D’Arco committed “an

intentional wrong” necessary to prove defalcation under 11 U.S.C. § 523(a)(4),

Bullock v. BankChampaign, N.A., 569 U.S. 267, 273 (2013), or that D’Arco

embezzled any funds, see In re Littleton, 942 F.2d 551, 555 (9th Cir. 1991). Nor

did Misik prove that D’Arco’s accounting of the funds was a “gross deviation from

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the standard of conduct that a law-abiding person would observe in the actor’s

situation.” Bullock, 569 U.S. at 274 (emphasis omitted) (quoting Model Penal

Code § 2.02(2)(c) (1985)).

      Finally, the bankruptcy court did not err in holding D’Arco’s debt was not

excepted from discharge under 11 U.S.C. § 523(a)(6) because Misik failed to prove

D’Arco had any intent to injure. See In re Ormsby, 591 F.3d 1199, 1206 (9th Cir.

2010).

AFFIRMED.

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