Marjorie Aamodt v. Pasquale B. Narcisi, II
691 F. App'x 606
11th Cir.2017Background
- In the 1980s the Aamodts consigned antiques to Narcisi under a one‑page consignment agreement that guaranteed them $25,000 from auction proceeds; they received $14,795.83 and obtained a Pennsylvania state‑court breach‑of‑contract judgment against Narcisi.
- Narcisi filed Chapter 7 in 2014; the Aamodts filed an adversary complaint seeking to except the debt from discharge under 11 U.S.C. § 523(a)(4) (fiduciary fraud/larceny).
- The Aamodts moved for summary judgment; the bankruptcy court denied their motion and sua sponte entered summary judgment for Narcisi.
- The district court affirmed the bankruptcy court; the Aamodts appealed, raising collateral estoppel, denial of leave to amend to add embezzlement, and error in the court’s sua sponte summary judgment.
- The courts concluded the state‑court judgment and a prior Chapter 13 dismissal did not have preclusive effect on the § 523 issues, the proposed embezzlement amendment was time‑barred under Rule 4007(c), and there was insufficient evidence of a fiduciary relationship or larceny to except the debt from discharge.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Collateral estoppel from Pennsylvania state judgment and prior Chapter 13 order | State judgment and prior bankruptcy order preclude relitigation of facts and should bar discharge | Prior orders did not decide fiduciary fraud/intentional fraud or were not adjudications on the dischargeability issues | Not preclusive: state court decided contract breach (not fiduciary fraud); prior Ch.13 dismissal did not reach dischargeability and was forfeited as a basis for summary judgment |
| Leave to amend to add embezzlement (§ 523(a)(4) embezzlement) | Amendment should be allowed to add embezzlement claim based on retention of consigned items | Amendment is time‑barred under Rule 4007(c) and would be futile | Denied: embezzlement allegation did not relate back to original complaint and was barred by the 60‑day rule |
| Existence of fiduciary relationship for § 523(a)(4) (fraud in fiduciary capacity) | Consignment/agency and state auctioneering rules created trust‑like fiduciary duties | Consignment/agency alone did not establish the special fiduciary trust required by § 523(a)(4); no evidence of required statutory trust account breach | No fiduciary relationship shown; summary judgment for Narcisi affirmed on fiduciary fraud theory |
| Larceny (§ 523(a)(4)) | Narcisi unlawfully took or retained consigned property; debt should be nondischargeable as larceny | Property was turned over to Narcisi under the consignment agreement (not an unlawful taking) | No evidence of unlawful taking; larceny not established; summary judgment for Narcisi affirmed |
Key Cases Cited
- Grogan v. Garner, 498 U.S. 279 (1991) (collateral estoppel principles apply in discharge exception proceedings)
- In re St. Laurent, 991 F.2d 672 (11th Cir. 1993) (issue preclusion standards in bankruptcy contexts)
- Rue v. K‑Mart Corp., 713 A.2d 82 (Pa. 1998) (Pennsylvania collateral estoppel principles)
- Quaif v. Johnson, 4 F.3d 950 (11th Cir. 1993) (statutory trust duties can create fiduciary relationship by operation of law)
- In re Blaszak, 397 F.3d 386 (6th Cir. 2005) (agent‑principal relationship alone insufficient to satisfy § 523(a)(4) fiduciary requirement)
- Anderson v. Liberty Lobby, 477 U.S. 242 (1986) (summary judgment standard and inadmissible evidence considerations)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment and burden on nonmoving party)