43 East 74th St. Associates v. Marceca (In Re Marceca)
The Chapter 7 debtor, Robert K. Marceca, moved to dismiss an adversary proceeding filed by plaintiffs Benjamin S. Richman, Arthur Shulman, and Irving Barr. The plaintiffs sought to declare claims nondischargeable under 11 U.S.C. § 523(a)(4). The first claim alleged Marceca embezzled partnership funds from 43 East 74th St. Associates. The second claim, by Richman, accused Marceca of embezzling real estate investment commissions. The debtor argued that a partner cannot embezzle partnership property and that the second claim was unenforceable due to the statute of frauds. The court denied the motion to dismiss both claims, affirming that New York partnership law establishes a fiduciary relationship allowing for nondischargeable claims for defalcation and that the statute of frauds is an affirmative defense, not a basis for dismissal under Fed.R.Civ.P. 12(b)(6).