United States Bankruptcy Court for the Southern District of Florida
232 B.R. 508 (1999)
Alberto Mesa (defendant) and Keith McKay purchased a residence in June 1996 as tenants in common. The home was purchased for $215,000, and Mesa testified that the present market value of the home was $250,000. The home was subject to first and second mortgages from NationsBank of $157,000 and $67,649.55, respectively. The second mortgage was intended to finance home improvements, but it was actually used to fund a new business started by McKay after McKay lost his job with Travelers Indemnity Company (Travelers) (plaintiff). Significant renovations were completed on the home, including remodeling of bathrooms, the kitchen, and garage. These renovations were funded with checks that McKay fraudulently caused to be issued from Travelers. Mesa was issued 17 checks totaling $147,977.70, Mesa’s mother was issued four checks totaling $35,528.15, and construction contractors and suppliers were issued checks totaling $194,909.76. All of the money received from these fraudulently issued checks was used to fund the renovations of the home. Mesa filed for bankruptcy and sought to exempt his interest in the residence from the bankruptcy estate pursuant to the homestead exemption under the Florida Constitution. Travelers filed an objection to this claimed homestead exemption. Mesa claimed that McKay stated that the checks were drawn on McKay’s retirement account.
Rule of Law
Holding and Reasoning (Ray, J.)
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