Kannon v. Blalock (In Re Blalock)

MEMORANDUM

CLIVE W. BARE, Bankruptcy Judge.

At issue in this adversary proceeding is whether a State Court judgment resulting from the alleged misuse of funds provided to a contractor/builder for construction of a residence is a nondischargeable debt under 11 U.S.C. § 523(a)(4). 1 Plaintiffs rely upon T.C.A. § 64-1140. 2

I

On May 2,1979, the plaintiffs, Phillip and Kay Kannon, contracted with the defendant, George C. Blalock, for the construction of a house in Roane County, Tennessee, for a contract price of $46,550. Pursuant to the contract, the Kannons paid the defendant the sum of $22,000.

The…