OPINION
This аction presents the question of whether the United States Bankruptcy Code excludes from discharge a debt that an employer owes for failing to contribute to employee benefit funds. Debtor Charles S. Bucci signed a collective bargaining agreement in 2003 requiring his company, Floors by Bucci, Inc., to make monthly contributions to pension and fringe benefit funds. Bucci admits that he failed to contribute to the funds for over a yеar. In 2005, he filed a Chapter 7 bankruptcy petition.
Appellants, who represent the various funds (the “Funds”), filed an adversary proceeding in the bankruptcy court, seeking a declaration that Bucci’s debt could not be discharged. They argued that his failure to contribute to the funds was a “defalcation while acting in a fiduciary capacity” under 11 U.S.C. § 523(a)(4). The bankruptcy court held that § 523(a)(4) did not apply because there wаs no evidence demonstrating Bucci acted as a fiduciary of the monies owed to the funds. On appeal, the district court affirmed and rejected the Funds’ contention that Bucci’s status as a fiduciary under the Employee Retirement Income Security Act of 1974 (ERISA) also made him a fiduciary for purposes of § 523(a)(4)’s defalcation provision.
*638 Because the requirements for a defalcation under § 523(a)(4) are not met in this case, we AFFIRM.
I.
Bucci is the president and sole shareholder of Floors by Bucci, Inc. In February 2003, he signed the Northeast Ohio Carpenters’ Collective Bargaining Agreement. Article XXV of the CBA required Bucci’s company to make monthly contributions to certain pension, hospitalization, and annuity funds. The amount of the contribution to each fund was set by a rate specified in Appendix D to the CBA. In addition, the CBA required Bucci’s cоmpany to withhold union dues and vacation benefits from employees’ wages. Under the CBA, wage statements provided to employees had to indicate the amount of employer contributions and wage withhold-ings being made for each pay period.
In January 2005, Bucci filed a Chapter 7 bankruptcy petition. He scheduled a $99,000 debt to the benefit funds for unpaid employer contributions and withhold-ings.
On April 11, 2005, the boards of trusteеs for the Funds filed an adversary proceeding against Bucci. The complaint alleges that Bucci should be treated as the alter ego of Floors by Bucci because he acted as the only officer and director of the company, made all corporate decisions, owned 100% of the company’s stock, and ignored corporate separateness from his personal financial affairs. The complaint further alleges that from March 2003 through May 2004, Bucci failed to make the employer contributions required by the CBA and failed to remit union dues and vacation benefits that he had withheld from his employees’ wages. According to the complaint, Bucci owed to the Funds $61,300 in employer contributions and $24,500 in related delinquency assessments, and he owed $9600 in wage withholdings and $3900 in related delinquency assessments. The comрlaint seeks a declaration that Bucci’s debts for unpaid contributions and withholdings are not dischargeable in bankruptcy because they qualify as debts from defalcation and from embezzlement under 11 U.S.C. § 523(a)(4).
Bucci did not dispute before the bankruptcy court that he was an alter ego of Floors by Bucci or that he had failed to pay the contributions and withholdings. The parties filed cross-motions for summary judgment on the claims of defalcation and embezzlement. The bankruptcy court found that the unpaid employer contributions were not a debt from defalcation because Bucci did not act as a fiduciary of the contributions. Citing
Commonwealth Land Title Co. v. Blaszak (In re Blaszak),
In contrast, the bankruptcy court concluded that the debt for unpaid wage with-holdings was excluded from discharge. The court found that the CBA created a trust, with the withheld wages as the trust res and Bucci as the trustee. In the bankruptcy court’s view, the wages Bucci withheld from employees’ paychecks belonged to the employees as earned compensation under the CBA. Bucci was entrusted with those wages and was required to turn *639 them over to the union and vacation benefit fund. The bankruptcy court therefore found that Bucci was a fiduciary of the withheld wages and that his failure to remit the entrusted monies was a defalcation.
Only the bankruptcy court’s ruling regarding employer contributions was appealed to the district court. The Funds argued that the bankruptcy court should have relied on ERISA law to find that Bucci was a fiduciary of the employer contributions. The district court rejected this argument and held that under Blaszak, the defalcation provision does not apply unless the debtor holds the monies in trust. The court ruled that being an fiduciary under ERISA’s broad definition of that term is not enough. The district court found no evidence that Bucci acted as a fiduciary of the contributions and affirmed the bankruptcy court’s decision.
The Funds now appeal the decision of the district court. For the reasons stated below, we affirm.
II.
On appeal of a district court’s initial appellate review of a bankruptcy court’s decision, “this court independently reviews the bankruptcy court’s findings of fact for clear error and its conclusions of law de novo.”
R.E. America, Inc. v. Garver (In re Garner),
The Bankruptcy Code “does not discharge an individual debtor from any debt ... for fraud or defalcation while acting in a fiduciary capacity.” 11 U.S.C. § 523(a)(4). A “defalcation” encompasses not only embezzlement and misappropriation by a fiduciary, but also the “failure to properly account for such funds.”
Capitol Indemnity Corp. v. Interstate Agency, Inc. (In re Interstate Agency),
The Sixth Circuit “construes the term ‘fiduciary capacity’ found in the defalcation provision of § 523(a)(4) more narrowly than the term is used in other circumstances.”
In re Blaszak,
To establish the existence of an express or technical trust, a creditor must demonstrate: “(1) an intent to create a trust; (2) a trustee; (3) a trust res; and (4) a definite beneficiary.”
In re Blaszak,
The Funds argue that an express trust was created here under ERISA. They contend that the employer contributions were plan assets under ERISA and constituted the trust res. They further argue that Bucci met the definition of an ERISA trustee because he exercised control over the assets by choosing to not pay the contributions.
See Moore v. LaFayette Life Ins. Co.,
In support of the proposition that being an ERISA fiduciary is sufficient to satisfy the fiduciary capacity requirement of § 523(a)(4), the Funds cite
Blyler v. Hemmeter (In re Hemmeter),
Other courts have disagreed and held that an being an ERISA fiduciary is not itself sufficient to satisfy the fiduciary capacity element of § 528(а)(4). In
Hunter v. Philpott,
We are not satisfied that the simple determination that an individual is an ERISA fiduciary is enough to satisfy the requirements of § 523(a)(4). Instead, we believe that the prior holdings of our court and the United States Supreme Court require that we look specifically at the property that is alleged to have been defalcated to determine whether Phil-pott was legally obligated to hold that specific property for the benefit of the Funds.
Hunter,
Other courts have likewise held that ERISA fiduciaries do not necessarily аct in a fiduciary capacity for purposes of § 523(a)(4).
See Mo-Kan Iron Workers Pension Fund v. Engleman (In re Engleman),
As noted above, the Sixth Circuit has repeatedly construed “the term ‘fiduciary capacity’ found in the defalcation provision of § 523(a)(4) more narrowly than the term is used in other circumstances.”
In re Blaszak,
This court agrees with
Hunter
that a court should examine the substance of the alleged fiduciary relationship to determine if the requirements for a defalcation are satisfied.
See Cash America Fin. Serv., Inc. v. Fox (In re Fox),
Here, the parties entered into three identical trust agreements pursuant to the CBA. Each trust agreement created a “Trust Fund” whose assets included “all funds received or due to be received by the Trustees in the form of Employer Contributions (including delinquent Employer Contributions).... ” Trust Agr., Art. I, Sec. 16 (J.A. 193). Neither the bankruptcy court nor the district court below addressed the issue of whether the employer contributions qualified as ERISA plan assets. Traditionally, the “proper rule, developed by caselaw, is that unpaid employer contributions are nоt assets of a fund unless the agreement between the fund and the employer specifically and clearly declares otherwise.”
ITPE Pension Fund v. Hall,
The Funds do not argue that the trust agreements made Bucci a trustee. Indeed, in the cross-motion for summary
*643
judgment they filed in bankruptcy court, the Funds attached only the “Definitions” section of the trust agreements; they did not include the section of the agreements that designated the trustee. The Funds instead argue that Bucci was a fiduciary under ERISA because he exercised control over the plan assets.
See
29 U.S.C. § 1002(21)(A)(i);
Moore,
The Funds’ argument illustrates the problem with treating a debtor’s status as an ERISA fiduciary as alone being sufficient to create an express or technical trust for purposes of § 523(a)(4). The act that created the debt — Bucci’s breach of his contractual obligation to pay the employer contributions — is also the exercise of control that the Funds allege made Buc-ci an ERISA fiduсiary. But for a trust relationship to satisfy § 523(a)(4), the alleged fiduciary must have duties that preexist the act creating the debt.
Davis,
The Funds’ reliance on
Iron Workers’ Local No. 25 Pension Fund v. McGuire Steel Erection, Inc.,
In their reply briеf, the Funds fall back on the argument that Bucci’s possession of trust assets, as opposed to his failure to pay them, is what made him an ERISA fiduciary. However, “ERISA’s statutory definition will not extend fiduciary status to every person who exercises mere possession, or custody over the plans’ assets.”
Briscoe v. Fine,
The key point for bankruptcy purposes, however, is that Bucci had only a
contractual
obligation to pay the employer contributions. This is not enough, for “the debt- or must hold funds in trust for a third party to satisfy the fiduciary relationship element of the defalcation provision of § 523(a)(4).”
In re Garver,
*644
The court further finds that the embezzlement provision of § 523(a)(4) does not apply. “A creditor proves embezzlement by showing that he entrusted his property to the debtor, the debtor appropriated the property for a use other than that for which it was entrusted, and the circumstances indicate fraud.”
Brady v. McAllister (In re Brady),
III.
For these reasons, we affirm.