Reshetar Systems, Inc. v. Thompson (In Re Thompson), 458 B.R. 504

Debtor Scott A. Thompson owned and led Construction 70, which contracted with Applebee's to build a Cambridge, Minnesota restaurant.
Reshetar Systems, Inc. supplied carpentry and drywall labor, materials, and equipment for Construction 70's project and was not fully paid.
A settlement in June 2009 yielded Debtor's confession of judgment for $78,000.00 in favor of Reshetar.
Debtor filed a Chapter 7 bankruptcy petition on December 30, 2009; Reshetar filed an adversary proceeding under 11 U.S.C. § 523(a)(2)(A), (4), and (6).
The bankruptcy court ruled in Debtor's favor on January 20, 2011, and Reshetar appealed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Minnesota § 514.02 creates a fiduciary relationship for § 523(a)(4)	Reshetar asserts a statutory fiduciary duty existed over the Applebee's payments.	Thompson contends § 514.02 does not create a fiduciary relationship for dischargeability purposes.	No fiduciary relationship under § 523(a)(4).
Whether the Applebee's payments to Construction 70 constituted embezzlement	Reshetar argues funds belonged to it and were misused by Construction 70.	Construction 70 could use its funds freely; no specific property right vested in Reshetar.	Not embezzlement; funds were Construction 70's property.
Whether the payments gave rise to larceny under § 523(a)(4)	Reshetar contends unauthorized taking by Construction 70 constituted larceny.	Payments were lawfully received by Construction 70 and used legitimately.	No larceny; payments belonged to Construction 70.
Whether there was a willful and malicious injury under § 523(a)(6)	Reshetar claims this amounts to conversion and malicious conduct by Debtor.	Debtor argues there was no conversion or malicious intent; actions were effort to rectify the situation.	No willful or malicious injury; judgment not excepted from discharge.

R & R Ready Mix v. Freier (In re Freier), 604 F.3d 583 (8th Cir. 2010) (de novo review of contract interpretation and factual findings)
Bremer Bank v. John Hancock Life Ins. Co., 601 F.3d 824 (8th Cir. 2010) (contract interpretation and related standards)
First Nat'l Bank of Olathe, Kansas v. Pontow, 111 F.3d 604 (8th Cir. 1997) (interpretation of contracts and related dischargeability issues)
In re Cantrell, 329 F.3d 1119 (9th Cir. 2003) (fiduciary status not broadly defined for § 523(a)(4))
In re Long, 774 F.2d 878 (8th Cir. 1985) (constructive trust and fiduciary concept limitations)
Snyder Elec. Co. v. Fleming, 305 N.W.2d 869 (Minn. 1981) (insolvency-related fiduciary duties under Minnesota law)
In re Patch, 526 F.3d 1176 (8th Cir. 2008) (willful and malicious injury standard under § 523(a)(6))
In re Geiger, 113 F.3d 848 (8th Cir. 1997) (definition of willful injury under § 523(a)(6))
In re Scarborough, 171 F.3d 638 (8th Cir. 1999) (willful and malicious standard guidance)
In re Porter, 539 F.3d 889 (8th Cir. 2008) (malicious injury analysis under § 523(a)(6))
In re Belfry, 862 F.2d 661 (2d Cir. 1988) (embezlement concept in § 523(a)(4) context)
Amcon Block & Precast, Inc. v. Suess, 794 N.W.2d 386 (Minn. App. 2011) (Minnesota corporate liability dynamics post-insolvency)