Circuit split · bankruptcy law
Whether a 'defalcation' excepting a debt from discharge under Bankruptcy Code § 523(a)(4) can arise from mere negligence, or requires a higher mental state such as intent or recklessness
1 federal appellate case on this question, each acknowledging the disagreement in its own words.
- Meyer v. Rigdon36 F3D 1375
Seventh Circuit Court of Appeals · September 22, 1994
“Given this well-recognized principle, and the split of authority concerning whether a “defalcation” may result from negligence, we cannot say that Congress intended for a debt arising from a mere negligent breach of fiduciary duty to be excepted from discharge under section 523(a)(ll).” — Split of authority
Empirical analysis of this case →
The other side of the split
Decisions the acknowledging court(s) named as the opposing or joined side, quoted in the acknowledging opinion's own words.
- On the other side · Bankr. W.D. Pa.In re McCormick70 B.R. 49
- On the other side · W.D. Pa.American Ins. Co. v. Lucas41 B.R. 923
- Discussed · 11th Cir.Quaif
“The Eleventh Circuit held that the conduct at issue in Quaif “was far more than an innocent mistake or even negligence.” Id.” — Meyer v. Rigdon, acknowledging the split
- Discussed · Bankr. E.D. Wis.In re Marvin139 B.R. 202
“This is based on the strong policy of the Bankruptcy Code of providing a debtor with a ‘fresh start.’ ” In re Marvin, 139 B.R.” — Meyer v. Rigdon, acknowledging the split
What the split turns on
- Anchor precedents:
- Central Hanover Bank & Trust Co. v. Herbst93 F.2d 510
- Statutes:
- § 523(a)(4)
- Doctrines & tests:
- strict construction of exceptions to discharge ·
- fresh start policy
Cases are grouped by the legal question they announce a split on, classified from the court's own acknowledgment sentence. Verified acknowledgments only. Counter-side decisions are extracted from the acknowledging opinions' own text and linked only when the citation resolves in this corpus. See all circuit splits.