Creditor who supplied hauling services to debtor’s excavation company on a public works construction project brought action under 11 U.S.C. § 523(a)(4), alleging that debtor’s misapplication of construction trust funds under the Colorado Public Works Act amounted to defalcation. The Court held that specific language in the construction contract signed by the debtor that set forth his company’s duties regarding subcontractor trust funds as well as the debtor’s submission of inaccurate forms regarding payment of subcontractors was sufficient to establish the required mens rea for defalcation. The Court further held that the plaintiff’s receipt of a partial payment of its claim from a surety did not cause it to lose standing or its real-party-in-interest status. The Court also awarded the plaintiff damages on its civil theft claim and determined that the plaintiff was entitled treble, but not quadruple damages, under that state statute.
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