In re Galardi (Ch 11 Case No. 22-50035-JPS, Adv. Case No. 22-05008)

Plaintiff filed an action in Nevada state court in 2018 alleging that Defendant/Debtor had breached her duties as trustee of a Family Trust. There, Plaintiff and Debtor disputed when the state statute of limitations had began to run. Debtor’s bankruptcy in 2022 stayed the state court action. Plaintiff filed a complaint in this Court alleging that Debtor breached her fiduciary duty and that her debt was nondischargeable under 11 U.S.C. §523 (a)(2)(A), (4) and (6). The Court denied Debtor’s motion to dismiss the complaint because, in his complaint, Plaintiff alleged that he first learned of Debtor’s breach of fiduciary duty on a certain date that was within the state statute of limitations. However, the Court did permissively abstain from hearing Plaintiff’s claims that are controlled by Nevada state law. 28 U.S.C. §1334 (c)(1) Once the Nevada case has been resolved and Plaintiff’s claims determined, this Court will make a final determination as to whether the claims, if any, are nondischargeable.

Thursday, March 9, 2023