In re: Tirben, No. 10-29356-E-13L (Bankr. E.D. Calif., April 15, 2011).
When funds are stolen, can the injured party recover from the thief's spouse?
Several individuals (the "Signorello Parties") were involved in the wine business. In 2005, they hired Sakir Tirben as accountant. The Signorello Parties claimed that Mr. Tirben stole more than $500,000 from them during the course of his employment. They claim he used the stolen funds to pay for life insurance policies, and the rest was deposited into his bank account, which he maintained with his wife, Mrs. Tirben.
When the authorities caught on to the theft, Mr. Tirben committed suicide, triggering the life insurance payout. Mrs. Tirben was then sued by the Signorello Parties in order to recover the stolen funds, in the form of the life insurance payout. Mrs. Tirben filed for Chapter 13 protection. The Signorello Parties, in turn, sought the funds owed them, and a determination by the court that the debt was nondischargeable in bankruptcy.
The court held that Mrs. Tirben was not personally liable for her husband's theft. Further, because there was not enough evidence to conclusively trace the life insurance payments to the stolen funds, the court determined that the life insurance funds were made from commingled marital funds. Because of this, the life insurance payout would not be attributed completely to the stolen funds, and therefore would not belong to the Signorello Parties.
