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Detroit Bank and Trust Co. v. Chicago Flame Hardening Co.

United States District Court for the Northern District of Indiana
541 F.Supp. 1278 (1982)


Facts

The owners of Chicago Flame Hardening Co. (Chicago Flame) (defendant) adopted a corporate resolution in 1964 pursuant to which Chicago Flame agreed to pay a monthly stipend to the widow of an owner upon his death. Roxanne Scott, now represented by her guardian Detroit Bank and Trust Co. (Detroit Bank) (plaintiff), was the wife of owner Marvin Scott. She was aware that the resolution provided a potential future benefit but did not act upon it or otherwise keep it in mind. In 1967, widow benefits were triggered for Marjorie Keeler, the wife of another owner, upon his death. Mrs. Scott was aware that Mrs. Keeler was receiving benefits. In 1971, Chicago Flame adopted another corporate resolution rescinding any future widow benefits for Mrs. Scott, as a means to bolster the company’s financial resources. Later that year, Marvin Scott died. Mrs. Scott did not learn of the rescission of her benefits until after his death. In 1977, Detroit Bank sued Chicago Flame to enforce the 1964 resolution on behalf of Mrs. Scott. The case was heard by the court, which issued findings of fact and conclusions of law. 

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Holding and Reasoning (Lee, J.)

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