Question

Answer the following question in the IRAC format:

Jean operated a restaurant in a building her son Sal owned in Oswego County, New York. Jean intentionally burned down her son’s building so that her son could collect the insurance money. Sal had nothing to do with causing this fire. The insurance company paid Sal and commenced a legal action against Jean to get the money back it paid to Sal. Jean obtained a personal loan of $20,000 from Key Bank to help pay for her attorney’s fees in defending the lawsuit. To secure the loan, Jean gave answers to specific questions on the loan application. Jean falsely stated in her answers that she ran a restaurant business, which at the time of the loan application, she did not. Jean also falsely stated that there were no pending lawsuits against her, even though she was being sued by the insurance company.

Last month, using the insurance proceeds, Sal loaned Jean $10,000. At that same time, Jean gave her $30,000 recreational vehicle to her brother Tom. Jean continued to pay $1,000 per month to Gildy, Inc., a landscape and snowplow business, for grass and snow removal at the burned out building. Last week, Jean paid Sal back the $10,000.

And one day later just before the insurance company’s trial against Jean started, she filed a petition for Chapter 7 bankruptcy in a state trial court in Oswego County, New York. Key Bank is prepared to ask a court to dismiss the petition and in the alternative, to deny Jean a discharge in bankruptcy, and also to ask a court that if Jean is granted her petition, she be forced to turn over to the bankruptcy trustee the amounts paid to Sal and Guildy, Inc., as well as the value of the recreational vehicle. The insurance company wants to go forward with its lawsuit against Jean. What will Jean argue against Key Bank and the insurance company? What will Key Bank argue against Jean? What will the insurance company argue against Jean? How will the court rule on this case? Provide justification for your decision.

Answer 1

What will Jean argue against Key Bank and the insurance company?

Jean may argue that the allegations imposed by the insurance company are untrue. Also, she may state her bankruptcy to Key Bank and the insurance company, claiming that she does not have funds to pay to either.

What will Key Bank argue against Jean?

Let Bank will argue against Jean providing false statements while availing the $20,000 loan from the bank. She stated that she had not pending lawsuits, while she did have the one made by the insurance company. Secondly, she claimed to run a restaurant at the time of applying for the loan, when she didn't in reality. Thus, Jean has lied to Key Bank.

What will the insurance company argue against Jean?

The insurance company can produce the proofs they have against Jean, which state that it was she who lit fire to the building. Besides, the insurance company can lay stress on the recreational vehicle that she possessed. Also, paid $1,000 per month to Gildy, Inc., a landscape and snowplow business, for grass and snow removal at the burned out building.

How will the court rule on this case?

According to me, the court will rule in favor of the insurance company, provided they have substantial proof to prove that Jean burnt the building and the Key Bank from whom Jean availed loan of $20,000 by means of false statements.