In re Woldman

111 Citing cases

  1. LeCann v. Cobham (In re Cobham)

    551 B.R. 181 (E.D.N.C. 2015)   Cited 16 times
    Finding an award of punitive damages for "willful or wanton conduct" is insufficient to satisfy the willful and malicious standard under § 523

    Id.In a subsequent case, In re Woldman, 92 F.3d 546 (7th Cir.1996), the court again applied the balance of power rule and held dischargeable a debt owed by one lawyer to another, as a result of excess fees owed to the latter under a referral agreement which afforded to the former an opportunity to enter into a lucrative settlement. Id. at 546–47.

  2. Organic Family, LLC v. Pawlak

    Bankruptcy Case No. 10-11787-7 (Bankr. W.D. Wis. Feb. 7, 2012)

    In recent years, courts have also found a fiduciary relationship in instances in which there was "a difference in knowledge or power between fiduciary and principal" that "gives the former a position of ascendancy over the latter." In re Marchiando, 13 F.3d 1111, 1116 (7th Cir. 1994); see also In re Woldman, 92 F.3d 546, 547 (7th Cir. 1996) (the exception to discharge "reaches only those fiduciary obligations in which there is substantial inequality in power or knowledge"). The existence of a "fiduciary relationship" within the meaning of § 523(a)(4) is a matter of federal law.

  3. Organic Family, LLC v. Pawlak (In re Pawlak)

    467 B.R. 462 (Bankr. W.D. Wis. 2012)   Cited 11 times

    In recent years, courts have also found a fiduciary relationship in instances in which there was “a difference in knowledge or power between fiduciary and principal” that “gives the former a position of ascendancy over the latter.” In re Marchiando, 13 F.3d 1111, 1116 (7th Cir.1994); see also In re Woldman, 92 F.3d 546, 547 (7th Cir.1996) (the exception to discharge “reaches only those fiduciary obligations in which there is substantial inequality in power or knowledge”). The existence of a “fiduciary relationship” within the meaning of § 523(a)(4) is a matter of federal law.

  4. In re Roberts

    Bankruptcy No. 10 B 06420, Adversary No. 10 A 01298 (Bankr. N.D. Ill. Sep. 14, 2011)

    A creditor's debt may be found nondischargeable under the fraud or defalcation prong of § 523(a)(4) if he is able to establish that: (1) an express trust or fiduciary relationship existed between him and the debtor; and (2) the debtor committed fraud or defalcation in the course of that relationship. In re Woldman, 92 F.3d 546, 547 (7th Cir. 1996); Monroe, 304 B.R. at 358. "Fraud" for purposes of this exception has generally been interpreted as involving intentional deceit, rather than implied or constructive fraud.

  5. Zitt v. Roberts (In re Roberts)

    Bankruptcy No. 10 B 06420 (Bankr. N.D. Ill. Sep. 14, 2011)

    A creditor's debt may be found nondischargeable under the fraud or defalcation prong of § 523(a)(4) if he is able to establish that: (1) an express trust or fiduciary relationship existed between him and the debtor; and (2) the debtor committed fraud or defalcation in the course of that relationship. In re Woldman, 92 F.3d 546, 547 (7th Cir. 1996); Monroe, 304 B.R. at 358. "Fraud" for purposes of this exception has generally been interpreted as involving intentional deceit, rather than implied or constructive fraud.

  6. Estate of Bartlett v. Vaccaro

    No. 09 B 08674 (Bankr. N.D. Ill. Oct. 14, 2010)

    These situations involve a fiduciary relation which was in existence prior to the debtor's wrong and are "characterized by disparities in the knowledge or economic status of the participants," the fiduciary having the superior status and/or knowledge to the defrauded creditor victim. McGee, 353 F.3d at 541; see also In re Woldman, 92 F.3d 546, 547 (7th Cir. 1996)("section 523(a)(4) reaches only those fiduciary obligations in which there is substantial inequality in power or knowledge in favor of the debtor seeking the discharge and the creditor resisting the discharge."). In some instances, the requisite superior status and/or knowledge establishing a fiduciary relationship has been found where the creditor/plaintiff is vulnerable due to advanced age, poor health, and isolation.

  7. In re Vaccaro

    Case No. 09 B 08674, Adv. No. 09 A 00476 (Bankr. N.D. Ill. Oct. 14, 2010)   Cited 8 times

    These situations involve a fiduciary relation which was in existence prior to the debtor's wrong and are "characterized by disparities in the knowledge or economic status of the participants," the fiduciary having the superior status and/or knowledge to the defrauded creditor victim. McGee, 353 F.3d at 541; see alsoIn re Woldman, 92 F.3d 546, 547 (7th Cir. 1996) ("section 523(a)(4) reaches only those fiduciary obligations in which there is substantial inequality in power or knowledge in favor of the debtor seeking the discharge and the creditor resisting the discharge."). In some instances, the requisite superior status and/or knowledge establishing a fiduciary relationship has been found where the creditor/plaintiff is vulnerable due to advanced age, poor health, and isolation. See, e.g.

  8. In re Berman

    629 F.3d 761 (7th Cir. 2011)   Cited 143 times
    Holding debtor must have been trustee before wrongdoing

    We have recognized that the exception encompasses only "a subset" of fiduciary obligations. In re Woldman, 92 F.3d 546, 547 (7th Cir. 1996). At the time of Davis, the subset was limited to express trusts, and did not include trusts implied by law.

  9. In re Frain

    230 F.3d 1014 (7th Cir. 2000)   Cited 178 times
    Holding the source of a debtor's fiduciary relationship was his "substantial ascendancy" over two shareholders

    In re Marchiando, 13 F.3d 1111, 1116 (7th Cir. 1994). See also Woldman, 92 F.3d 546, 547 ("section 523(a)(4) reaches only those fiduciary obligations in which there is substantial inequality in power or knowledge in favor of the debtor seeking the discharge and against the creditor resisting discharge."). A "fiduciary duty" under this test covers circumstances which, although not comprising a literal "trust," do "call for the imposition of the same high standard."

  10. Follett Higher Education Group, Inc. v. Berman

    427 B.R. 432 (N.D. Ill. 2010)   Cited 11 times
    Noting that "courts have generally construed `fraud or defalcation while acting in a fiduciary capacity' in § 523 as applying only in circumstances akin to breach of a formal trust — that is, to debts involving property that could be the res of a trust and a relationship between the debtor and creditor that establishes a fiduciary relationship encompassing that property."

    A mere promise to pay a debt when circumstances giving rise to the obligation to pay come into existence, made by an individual to another person or entity of equal or superior standing, is not within the ambit of 11 U.S.C. § 523(a)(4). In re Woldman, 92 F.3d 546 (7th Cir. 1996). However, a "fiduciary duty" under this test includes circumstances which, although not comprising a literal or "formal" trust, do "call for the imposition of the same high standard."