Bos v. Bd. of Trustees, 795 F.3d 1006 (9th Cir. 2015), involved the owner of a company that participated in a multi-employer pension plan. Because the owner had full control over the company finances, he was personally responsible for making the required contributions. Moreover, he signed a promissory note for some $360,000 in payments that the company had failed to make. Then he filed bankruptcy. The bankruptcy court and the district court held that the debt was not dischargeable, because it was incurred due to the debtor’s “fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny.” 11 U.S.C. § 523(a)(4). To so hold, the lower courts had concluded that the unpaid contributions were plan assets, and plaintiff’s control over those unpaid contributions made him a fiduciary, which gave rise to non-dischargeability.

The 9th Circuit reversed. It first noted that it had consistently held that unpaid contributions to employee pension plans are not plan assets. It then noted that several districts within the 9th Circuit, and some other circuits (particularly the 2d and 11th), had recognized that unpaid contributions could be plan assets if the plan expressly so provided (making the employer who failed to pay a fiduciary). Other circuits (the 6th and 10th) had reached contrary conclusions. The 10th, for example, held that, regardless of plan language, a plan can only hold a contractual right to collect unpaid contributions, and not the unpaid contributions themselves. The 6th held that, even if a plan could make an unpaid contribution a plan asset, an employer cannot become a fiduciary by virtue of failing to make a required contribution.

The court agreed with the 6th and 10th Circuits. The court noted that fiduciary status should not be imposed unless the individual is clearly aware of his status, and that a typical employer never has sufficient control over a plan asset to make it a fiduciary. The court further held that, no matter how one described the supposed “asset” – a right to collect payments, unpaid past-due contributions, or amounts that must be paid but are not yet due – an employer did not have sufficient control over that asset to make it a fiduciary.

Because unpaid contributions cannot be plan assets, the failure to pay cannot be a breach of fiduciary duty, and plaintiff’s debt was dischargeable.