UNITED STATES COURT OF APPEALS
Tenth Circuit
Byron White United States Courthouse
1823 Stout Street
Denver, Colorado 80294
(303) 844-3157
Patrick J. Fisher, Jr. Elisabeth A. Shumaker
Clerk Chief Deputy Clerk
September 23, 1999
TO: ALL RECIPIENTS OF THE ORDER AND JUDGMENT
RE: 99-5003, In re: Hatley
Filed on September 16, 1999
The order and judgment contains a clerical error on page one. The correct case
number for the Bankruptcy Appellate Decision is 98-047. A corrected order and
judgment is attached.
Sincerely,
Patrick Fisher, Clerk of Court
By: Keith Nelson
Deputy Clerk
encl.
F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS SEP 16 1999
FOR THE TENTH CIRCUIT PATRICK FISHER
Clerk
In re: JERRY F. HATLEY,
Debtor.
No. 99-5003
DONALD SMOLEN, (BAP No. 98-047)
(N.D. Okla.)
Appellant,
v.
JERRY F. HATLEY,
Appellee.
ORDER AND JUDGMENT *
Before BALDOCK , BARRETT , and McKAY , Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
Donald Smolen, a creditor in Jerry F. Hatley’s Chapter 7 bankruptcy
proceeding, appeals from the Tenth Circuit Bankruptcy Appellate Panel’s order,
see Smolen v. Hatley (In re Hatley) , 227 B.R. 757 (B.A.P. 10th Cir. 1998) ,
affirming the decision of the bankruptcy court that his claim was not exempt from
discharge. We affirm.
Smolen and Hatley entered into an agreement 1
in 1994 to purchase used
planes in order to refurbish and resell them. Smolen and various third party
lenders provided the funds. Hatley was to locate planes and supervise their repair
and resale. Hatley located two planes which were purchased, refurbished, and
resold. The two agreed that proceeds from the sales of the planes would be used
to pay expenses and repay the borrowed funds including Smolen’s loan. Any
profits would be divided equally between them. A total of $125,000.00 was
received. Hatley deposited those proceeds into his personal bank account. Hatley
repaid the bank loans and paid the vendors in full. However, he spent $44,604.28
of the proceeds on his personal affairs. He delivered a promissory note to
Smolen, but made no payments on the note prior to the commencement of his
1
The bankruptcy court found that the two operated their business as a
partnership. Smolen does not contest this determination.
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bankruptcy proceeding. The parties stipulated that Smolen knew all deposits were
made to Hatley’s personal account. Smolen commenced this proceeding seeking
an order that his debt was nondischargable under 11 U.S.C. § 523(a)(4).
The parties have stipulated to the relevant facts as set forth above. We
review the BAP’s conclusions of law de novo. See Andersen v.
UNIPAC-NEBHELP (In re Andersen) , 179 F.3d 1253, 1255 ( 10th Cir. 19 99).
Smolen argues that his claim should be exempt from discharge because
Oklahoma statutory and common law create a fiduciary duty between partners
sufficient to satisfy § 523(a)(4). Smolen agrees that Holaday v. Seay (In re Seay) ,
215 B.R. 780 (B.A.P. 10th Cir. 19 97) and Fowler Bros. v. Young (In re Young) ,
91 F.3d 1367 (10th Cir. 19 96) hold contrary to his position. However, he
contends that these cases should be overruled as they ignore Oklahoma law.
“We cannot overrule the judgment of another panel of this court . . . absent en
banc reconsideration or a superseding contrary decision by the Supreme Court.”
In re Smith, 10 F.3d 723, 724 (10th Cir. 1993). Smolen has presented no
acceptable reason for us to reconsider our prior decision.
Section 523(a)(4) denies a § 727 discharge from a debt for fraud or
defalcation while acting in a fiduciary capacity. Thus, a creditor must establish,
under federal law, that a fiduciary relationship existed between him and the
debtor. See Young , 91 F.3d at 1371. To find a fiduciary relationship under
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§ 523(a)(4), the contested debt must have been entrusted to the debtor as either an
express or technical trust. See id. at 1371-72. “Neither a general fiduciary duty
of confidence, trust, loyalty, and good faith, nor an inequality between the parties’
knowledge or bargaining power, is sufficient to establish a fiduciary relationship
for purposes of dischargeability.” Id. at 1372 (citations omitted). “Further, the
fiduciary relationship must be shown to exist prior to the creation of the debt in
controversy.” Id. (quotation omitted).
Smolen has failed to meet his burden. The judgment of the Tenth Circuit
Bankruptcy Appellate Panel is AFFIRMED.
Entered for the Court
Bobby R. Baldock
Circuit Judge
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