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In re Zachary Allen ; Tiara Donegan

Summarizing by Lars Fuller

Palm Finance Corp. v. Eberts (In re Eberts)

9th Cir. Case No. 13-55691 (May 26, 2015). Not for publication.
Bankruptcy court properly concluded that parts of debt were not excepted from discharge under § 523(a)(4) or (6) and prejudgment interest on the nondischargeable amounts was properly calculated in accordance with federal and not state law. 9th Circuit held as follows: (1) that the bankruptcy court finding that Debtor was not a fiduciary of Plaintiff under § 523(a)(4) was supported by the evidence; (2) that the bankruptcy court finding that Debtor had no intent to embezzle as required by § 523(a)(4) and instead engaged in "sloppy business practices" was supported by the evidence; (3) that the bankruptcy court finding that there was no subjective motive to inflict injury on Plaintiff or a belief that such injury was substantially certain to result from Debtor's conduct under § 523(a)(6) was supported by the evidence; and (4) with regard to the debt the bankruptcy court held nondischargeable, the bankruptcy court correctly calculated the prejudgment interest awarded and Plaintiff did not contend that the equities warranted application of state law for this purpose.
Procedural context:
Plaintiff files adversary proceeding seeking a determination that debts owed were nondischargeable. Plaintiff prevailed in part. Plaintiff appeals and the district court affirms.
Few facts are mentioned. Debtor apparently juggled funds amongst various companies in which Plaintiff did not have an interest. Plaintiff claimed the juggling was an intentional fraud while debtor successfully evidenced the bankruptcy court that the juggling was nothing more than a sloppy business practice.
Lipez, Wardlaw, and Murguia, Circuit Judges.

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