In re Albanese

• Decision Date: 13 February 1989
• Docket Number: Adv. No. 88-400.,Bankruptcy No. 88-3887-8P7
• Citation: 96 BR 376
• Court: U.S. Bankruptcy Court — Middle District of Florida
• Parties: In re Jane Chagaris ALBANESE a/k/a d/b/a Jane Chagaris—Maple Ridge Gourmet Foods, Debtor. FOOTE & DAVIES, Plaintiff, v. Jane Chagaris ALBANESE, Defendant.

96 B.R. 376 (1989)

In re Jane Chagaris ALBANESE a/k/a d/b/a Jane Chagaris—Maple Ridge Gourmet Foods, Debtor FOOTE & DAVIES, Plaintiff, v. Jane Chagaris ALBANESE, Defendant.

Bankruptcy No. 88-3887-8P7, Adv. No. 88-400.

United States Bankruptcy Court, M.D. Florida, Tampa Division.

February 13, 1989.

Larry M. Foyle, Tampa, Fla., for plaintiff.

John H. Stewart, St. Petersburg, Fla., for defendant.

FINDINGS OF FACT, CONCLUSIONS OF LAW AND MEMORANDUM OPINION

ALEXANDER L. PASKAY, Chief Judge.

THIS is a Chapter 7 liquidation case, and the matter under consideration is a claim of nondischargeability asserted by Foote & Davies (Plaintiff) in a single count Complaint under 11 U.S.C. § 523(a)(2)(B). The Complaint alleges that Jane Chagaris Albanese (Debtor) obtained money from the Plaintiff by the use of a materially false financial statement in writing with the intent to deceive the Plaintiff, and upon which the Plaintiff reasonably relied.

The facts as established at the final evidentiary hearing which are germane and relevant to the claim asserted by the Plaintiff are as follows:

At the time relevant to this controversy, the Defendant was the president and sole owner of a Florida corporation known as Maple Ridge Gourmet Foods, Inc (Maple Ridge). The Plaintiff, Foote & Davies (Plaintiff), is a corporation engaged in a general printing business including printing catalogues for mail-order houses and the like. Sometime in the early summer of 1987, one of the Plaintiff's sales persons contacted the Defendant and discussed the possibility of printing a catalogue for Maple Ridge. Thereafter, the salesman prepared a request for credit approval stating the approximate billing total to be $40,000.00 (Plaintiff's Exh.No. 1). The request for credit approval indicated several bank references and also some trade references. Upon receipt of the request for credit approval, the Plaintiff commenced to conduct an inquiry on the credit worthiness of Maple Ridge and requested a credit report from Dunn & Bradstreet, Inc. (D & B), on the financial status of Maple Ridge. In due course, D & B transmitted the report to the Plaintiff (Plaintiff's Exh.No. 2). On July 28, 1987, the Plaintiff received the D & B report which indicated that Maple Ridge was financially unbalanced, and that it actually had a negative net worth in that its liabilities substantially exceeded its current assets by $58,677.00. Upon a review of the D & B report, a senior vice-president of the Plaintiff requested that the Debtor execute a personal guaranty and furnish a personal financial statement as a condition precedent to the approval of a credit line. The Plaintiff claims it was unwilling to extend a credit line to Maple Ridge in light of the unfavorable report by D & B. The Debtor responded to the request by a letter dated July 31, 1987 (Plaintiff's Exh.No. 3), which stated that the letter would operate as her personal guaranty for the September 1987 printing of a new catalogue in the quantity of 300,000 copies at a quoted price of $35,020.00, plus mailing. The Debtor offered to pay a $10,000.00 down payment and to pay the balance in equal monthly payments on a 36sic-60 day period from the date of the invoice. In her letter she stated she had cash on hand in the banks in the amount of $55,000.00, and that the average balance on these accounts was $26,000.00. In addition she listed the following assets:

                Real estate                      $ 80,000.00
                 with a mortgage of $54,000.00
                Other personal property            57,000.00
                Cash Value on life insurance       15,000.00
                Inheritance (approximate)         600,000.00
                50% ownership in Linwood Travel    55,000.00
                                                 ___________
                Total assets in TOTAL amount of  $807,000.00
                

Shortly thereafter on August 3, 1987, the Plaintiff requested a signed formal personal guaranty, and in addition a financial statement on the form used by the Plaintiff in its business. It appears that on August 4 in an in-house memorandum, the senior vice-president who appeared to have the only authority to approve credit, indicated that the new account, i.e., the account with Maple Ridge would be approved if the financial statements were o.k. (Plaintiff's Exh.No. 5). The Plaintiff received a personal financial statement from the Debtor indicating that it represented the assets and liabilities of the Debtor as of August 6, 1987 (Plaintiff's Exh.No. 6), but which was signed on August 10, 1987. This financial statement was signed by the Debtor not only on the first page, but also on the second page, and included among the assets the following items: inheritance. . . . $600,000.00; gold bullion . . . $40,000.00. The Plaintiff also received, together with the personal financial statement, the personal guaranty which was signed by the Defendant on August 6, 1987 (Plaintiff's Exh.No. 7). According to the office memorandum in evidence (Plaintiff's Exh.No. 8) addressed to the senior vice-president, the personal guaranty had been received, along with an updated financial statement which appeared to be satisfactory for a credit line up to $40,000.00. It is without dispute that the credit line was approved and that the Plaintiff did, in fact, print the catalogues for Maple Ridge pursuant to the original quote. According to the statement sent by the Plaintiff to the Debtor, Maple Ridge did make payments on the account, but as of June 30, 1988, there was an outstanding balance which still remains unpaid in the amount of $17,686.45. This is the amount for which the Plaintiff seeks a declaration that it represents a nondischargeable liability.

The voluntary Petition for Relief was filed by this Debtor on July 11, 1988. A list of personal properties of the Debtor fails to make any reference to the gold bullion. Nor is there any reference to the so-called inheritance stated to be worth $600,000.00, or any disclosure of any interest of hers in any insurance policies. It is without dispute that the Debtor never owned any gold bullion. Although she claims that she signed the financial statement without reading it, she did answer a question at the bottom of Page One in her own handwriting immediately above her signature (Plaintiff's Exh.No. 6). The...