-3-
balance of $400,000 at any one time. This limit was
approximately a week’s worth of Brooks Foods’ purchases of
petroleum products from Egan Oil. If Brooks Foods owed more than
$400,000, Egan Oil would not deliver any more petroleum products
to Brooks Foods until Brooks Foods reduced its outstanding
balance below $400,000.
Brooks Foods was approaching its $400,000 credit limit with
Egan Oil in May 1993. To allow Brooks Foods to continue buying
fuel from Egan Oil, Mr. Hauser made two personal notes in May
1993, each for $100,000, in favor of petitioner.
These notes represented Mr. Hauser’s personal guaranty that
the $200,000 Brooks Foods owed to petitioner would be paid.
Although there is nothing in the record showing Mr. Hauser ever
made any payments on these notes, Brooks Foods did continue
purchasing and paying for fuel from Egan Oil. Mr. Hauser also
informed petitioner that he made petitioner a beneficiary on the
life insurance policy insuring Mr. Hauser’s life.
Mr. Hauser died in 1994 with a balance still owing from
Brooks Foods to Egan Oil. After Mr. Hauser’s death, petitioner
contacted the life insurance company insuring Mr. Hauser’s life,
but learned that despite Mr. Hauser’s representations, petitioner
was not, in fact, a beneficiary of the policy insuring Mr.
Hauser’s life.
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Last modified: May 25, 2011