Raso v. Fahey (In re Fahey)
- Summarized by Bodie Colwell , Preti Flaherty, LLP
- 12 years 1 month ago
- Citation:
- Raso v. Fahey (In re Fahey), No. 12-028 (B.A.P. 1st Cir. Nov. 20, 2012)
- Tag(s):
-
- Ruling:
- Concluding that the debtor acted in the a fiduciary capacity as an ERISA fiduciary, as well as a fiduciary of a technical trust under common law, the BAP reversed the order of the Bankruptcy Court and remanded for proceedings consistent with the opinion.
- Procedural context:
- Charles Raso (“Raso”) appeals from a bankruptcy court order granting summary judgment in favor of the debtor, James M. Fahey, Jr. (“Fahey”), on Count II of Raso’s § 523(a)(4) complaint seeking a determination that certain unpaid contributions to multiple employee benefit plans were nondischargeable. The bankruptcy court found that Raso failed to establish that Fahey acted in a fiduciary capacity, as required under § 523(a)(4).
- Facts:
- The debtor, Fahey, was formerly the president, treasurer and sole shareholder of Zani Tile, Inc. Raso was president and secretary-treasurer of a labor organization known as Bricklayers and Allied Craftsmen Local Union No. 3 Massachusetts, Maine, New Hampshire, Rhode Island (“BAC Local 3”) and also trustee and treasurer of the Massachusetts Bricklayers and Masons Health and Welfare, Pension, and Annuity Funds (collectively, the “Funds”).
In January 2011, Fahey filed a voluntary petition for relief under chapter 7. On his schedules, Fahey indicated that the Raso, as trustee of BAC Local 3, held a disputed, unsecured claim which represented union dues and employee benefit contributions which Zani failed to pay to the Funds. In April 2011, Raso, as trustee of BAC Local 3, filed a nondischargeability complaint against Fahey. In Count I, Raso alleged that prior to the commencement of Fahey’s bankruptcy case, Zani entered into one or more collective bargaining agreements with BAC Local 3, whereby Zani agreed to deduct union dues from the net wages of its employees and to forward payment to the Funds, as the collection agent of BAC Local 3. In Count II, Raso alleged that the collective bargaining agreements also required Zani to make pension, health, and annuity contributions to the Funds on behalf of certain employees. Raso filed a motion for summary judgment on both counts of the complaint. In his filed response, Fahey consented to summary judgment on Count I. Regarding Count II, the Bankruptcy Court found that Raso failed to establish that Fahey acted in a fiduciary capacity, as required under § 523(a)(4).
- Judge(s):
- Lamoutte, Kornreich, and Cabán,
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