Bos v. Board of Trustees, No. 13-15604 (9th Cir. 2015)
Annotate this CaseAfter Gregory Bos and his spouse filed a joint petition for Chapter 7 bankruptcy, the Board filed a complaint against Bos and his spouse contesting the dischargeability of a $504,282.59 debt. An arbitrator had awarded the Board the $504,282.59 against Bos, individually and as doing business as BEI, and BEI to recover the outstanding amounts owed to trust funds governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. The bankruptcy court entered judgment, concluding that Bos had committed defalcation while acting as a fiduciary of the Funds and that the $504,282.59 debt to the Funds was therefore nondischargeable. The district court affirmed. At issue on appeal was whether an employer’s contractual requirement to contribute to an employee benefits trust fund makes it a fiduciary of unpaid contributions. The court joined the Sixth and Tenth Circuits, holding that Bos was not a fiduciary under section 523(a)(4). Consistent with the court's general rule that unpaid contributions to employee benefit funds are not plan assets, Bos did not engage in defalcation for purposes of section 523(a)(4). Therefore, the court reversed the district court's judgment because Bos did not act as a fiduciary under 11 U.S.C. 523(a)(4), and because the bankruptcy court and district court expressly found that Bos’s debt did not fall under any of the other nondischargeability exceptions put forth by the Board. The court remanded to the bankruptcy court with instructions to discharge the debt.
Court Description: Bankruptcy. Reversing the district court’s judgment affirming the bankruptcy court, the panel held that a debt was not nondischargeable as a debt incurred due to the Chapter 7 debtor’s fraud or defalcation while acting in a fiduciary capacity. Agreeing with the Sixth and Tenth Circuits, the panel held that the debtor was not a “fiduciary” under 11 U.S.C. § 523(a)(4) when he failed to make contractually required contributions to an employee benefits trust governed by the Employee Retirement Income Security Act. The panel declined to recognize an exception to the rule that unpaid contributions by employers to employee benefit plans are not plan assets, even though other courts had recognized an exception when the plan document expressly defines the fund to include future payments. BOS V. BOARD OF TRUSTEES 3 The panel reversed with instructions to remand to the bankruptcy court with instructions to discharge the debt.
The court issued a subsequent related opinion or order on March 24, 2016.
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