U.S. Department of Labor v. Harris, No. 17-1261 (8th Cir. 2018)Annotate this Case
The DOL obtained a pre-bankruptcy judgment against debtor, providing that debtor breached his fiduciary duty under the Employee Retirement Income Security Act (ERISA). The DOL filed an adversary proceeding in debtor's Chapter 7 bankruptcy to have that judgment debt declared nondischargeable as a debt for defalcation while acting in a fiduciary capacity under 11 U.S.C. 523(a)(4).
The Eighth Circuit affirmed the grant of summary judgment for the DOL. The court held that debtor had fiduciary obligations regarding the funds that had been withheld from wages for payment to HealthPartners. The court also held that the undisputed facts and unchallenged factual findings supported the conclusion that debtor committed defalcation in late March 2009 when he chose to use plan assets to pay himself and other corporate expenses instead of remitting those assets to HealthPartners.