Chao v. Duncan (Duncan)
This case involves a motion for summary judgment filed by Eugene Duncan, the Debtor, in an adversary proceeding initiated by the Secretary of Labor (DOL). Duncan, who filed for bankruptcy under chapter 11 (later converted to chapter 7), seeks to discharge a debt arising from a Consent Judgment. The DOL's complaint aims to establish the non-dischargeability of this debt under section 523(a)(4) of the Bankruptcy Code, alleging fraud or defalcation while acting in a fiduciary capacity, related to his role in the International Workers’ Guild Health and Welfare Trust, which was subject to ERISA. Duncan's motion for summary judgment argues that the DOL lacked standing and the District Court lacked subject matter jurisdiction because the Plan was not an ERISA plan, and that the Secretary cannot demonstrate a breach of fiduciary duties. The Bankruptcy Court denied Duncan's motion, concluding that the Secretary has standing and that res judicata prevents relitigation of the District Court's jurisdiction and the Secretary's standing, given that Duncan had the opportunity to raise these issues in the prior District Court action.