Thomas Misik v. Thomas D'Arco

FILED
NOT FOR PUBLICATION
SEP 20 2019
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
THOMAS MISIK, No. 18-55750
Appellant, D.C. No. 2:17-cv-05629-AB
v.
MEMORANDUM*
THOMAS D’ARCO,
Appellee.
Appeal from the United States District Court
for the Central District of California
Andre Birotte, Jr., District Judge, Presiding
Submitted September 12, 2019**
Pasadena, California
Before: RAWLINSON, IKUTA, and BENNETT, Circuit Judges.
Thomas Misik appeals the district court’s order affirming the bankruptcy
court’s judgment in favor of Thomas D’Arco in Misik’s action alleging D’Arco’s
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
debt to him was nondischargeable in bankruptcy under 11 U.S.C. § 523. We have
jurisdiction under 28 U.S.C. § 158(d), and we affirm.
The bankruptcy court’s finding that D’Arco lacked fraudulent intent because
he intended to repay the loan funds and spent all funds in furtherance of the
development project was not clearly erroneous. See In re Slyman, 234 F.3d 1081,
1085 (9th Cir. 2000). Therefore, the bankruptcy court did not err in concluding
D’Arco’s debt was not excepted from discharge under 11 U.S.C. § 523(a)(2)(A).
For the same reason, the bankruptcy court did not err in concluding D’Arco’s debt
was not excepted from discharge under 11 U.S.C. § 523(a)(2)(B). See In re
Candland, 90 F.3d 1466, 1469 (9th Cir. 1996).
The bankruptcy court also did not err in concluding D’Arco’s debt was not
excepted from discharge under 11 U.S.C. § 523(a)(4). The bankruptcy court did
not clearly err in finding D’Arco spent all funds in furtherance of the project.
Therefore, even assuming D’Arco was acting in a fiduciary capacity for purposes
of 11 U.S.C. § 523(a)(4), Misik failed to prove that D’Arco committed “an
intentional wrong” necessary to prove defalcation under 11 U.S.C. § 523(a)(4),
Bullock v. BankChampaign, N.A., 569 U.S. 267, 273 (2013), or that D’Arco
embezzled any funds, see In re Littleton, 942 F.2d 551, 555 (9th Cir. 1991). Nor
did Misik prove that D’Arco’s accounting of the funds was a “gross deviation from
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the standard of conduct that a law-abiding person would observe in the actor’s
situation.” Bullock, 569 U.S. at 274 (emphasis omitted) (quoting Model Penal
Code § 2.02(2)(c) (1985)).
Finally, the bankruptcy court did not err in holding D’Arco’s debt was not
excepted from discharge under 11 U.S.C. § 523(a)(6) because Misik failed to prove
D’Arco had any intent to injure. See In re Ormsby, 591 F.3d 1199, 1206 (9th Cir.
2010).
AFFIRMED.
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