Answer

Legal Brief Submission

This paper reviews the case of Spacemakers of America, Inc. v. SunTrust Bank and suggests the most appropriate way in which the case could be decided. Using IRAC technique, the paper also reviews the critical legal thinking case of in re Lebovit and establishes whether the Lebovitzzes are eligible to keep their jewelry or whether the property must be considered a critical element of the bankruptcy estate.

Spacemakers of America, Inc. v. SunTrust Bank

 Issue:

The major issue in this case is whether the failure of Spacemakers to disclose the forgeries and provide SunTrust with prompt notice of the forgeries hindered its claim against SunTrust.

Rule

Uniform Commercial Code (4-406) is the most appropriate rule that can be applied in this case. According to this rule, a bank customer must assess monthly statement and inform the bank immediately about any unauthorized transaction (Hillebrand, 1990). It further states that any customer who declines to file the first forgery within thirty days will be exempted from the computation on the transactions, as well as, other items that are forged by the same offender (Hillebrand, 1990). Essentially, the failure described in the case scenario provided the offender with the chance to repeat illegal acts.

Application

            In the case scenario provided, had Spacemakers reviewed the bank statement when Triplett was employed, they would have detected forgeries and notified the bank promptly. Consequently, they would have prevented the loss of $475,000 witnessed. At the same time, had the SunTrust failed to exercise ordinary case, they would have considered partially responsible and negligent about the loss incurred. Unfortunately, the standards that the bank adopted to review checks had surpassed those used by other banks within the area. Therefore, the case was relatively a practical commercial standard.

Conclusion

             In conclusion, in the case of Spacemakers of America, Inc. v. SunTrust Bank, it can be concluded that SunTrust is not liable for the losses incurred because Spacemakers did not inform the bank about the forgeries early enough so that necessary actions could be taken. Similarly, the bank never failed in exercising ordinary care.

Re Lebovitz Case

Issue

             The issue in this case is whether the jewelry of the debtor qualifies as a necessary and suitable wearing apparel and whether it should be considered a property worth exempting from bankruptcy.

Rule

             Reportedly, bankruptcy estate is established immediately the bankruptcy commences (O’Malley, 1966). It encompasses all the equitable and legal interests of the debtor on personal, real, intangible and tangible assets that exist when a formal petition is filed. Intuitively, this implies the debtor’s interests, as well as, his or her spouse is the only community property. As a fact, life insurance, inheritance, gifts, as well as, divorce contracts that the debtor are eligible to within a period of 180 days from the time the petition was filled are considered parts of the bankruptcy item (O’Malley, 1966).

Application

             In this case, it is not anything to doubt that the debtor is the real owner of a Tiffany 5-carat diamond engagement ring worth $40,000- $50,000, a pair of diamond stud earrings of about 1 carat each, a Cartier watch, as well as, a diamond drop necklace of about 1 carat, all of which were from Lebovitz.

Conclusion

             In conclusion, although the jewelry is alleged to be exempt by the debtor, it is not subjected to exception in accordance to Tennessee Code.