09 B 13534, 09 A 00667
The court ruled in favor of the defendant on a count under 11 U.S.C. section 523(a)(4) charging defalcation or fraud while acting in a fiduciary capacity, finding as a matter of law that the defendant did not owe her brother or mother a fiduciary duty regarding their mother's financial transactions. The defendant held the mother's power of attorney when she helped the mother make banking transactions, some of which resulted in the brother being replaced as a surviving co-owner of the mother's accounts. Illinois law provides that the execution of a power of attorney creates a fiduciary relationship. However, federal law requires that in addition to the execution of a power of attorney that the principal entrust the agent with money or property to be used for the principal's benefit. The defendant was not entrusted with money or property to be administered for the benefit of the principal. The defendant merely helped their mother fill out bank forms to achieve transactions that the mother desired. The court found in favor of the defendant on a count under 11 U.S.C. section 523(a)(6) charging willful and malicious injury to the plaintiff's property. The plaintiff could not show that the defendant exercised the power of attorney or that she executed any of the transactions in issue. The court found in favor of the defendant on a count under 11 U.S.C. section 523(a)(2)(A) charging that the debt was incurred by way of false representations, false pretenses or actual fraud. The Plaintiff did not allege in his complaint or in a Local Rule 7056-2 Statement a false promise, a false representation or actual fraud leading to the formation of the debt in issue.