Skip to main content

Standing to argue statute of fraud as an affirmative defense

Torrance, CA |

I lent money to a company owned and managed by 2 people (father and son). The Father orally guaranteed that he would repay the loan if the company could not pay. (The Son did not guarantee). The company defaulted on payment and filed for bankruptcy. I sued the father on his personal guarantee for the loan to the company. I also sued father and son for fraudulent transfer because the father transferred money to his son to buy a house after the company became insolvent.

Default has been entered against the Father. I understand once a default is entered, all allegations are taken as true - i.e., he guaranteed payment of loan. The Son is challenging the claim on the basis of statue of fraud - i.e., the oral guarantee is invalid. Can the son challenge allegations taken as true?

Attorney Answers 4

Posted

Unless the son is an attorney he cannot raise claims for legally belonging to his father. It is a matter of standing. There is time to set aside the default by father to raise the defense.

A guaranty to answer for the debt of another in California must be in writing.

The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.

Mark as helpful

1 found this helpful

5 lawyers agree

Posted

"I understand once a default is entered, all allegations are taken as true" -- Your understanding is incorrect. You must still prove each element of your case, including a writing which evidences the guarantee you allege.

If there was no guarantee by the father you have no claim against the father. I do not see how you get to a fraudulent transfer by the father when father had no underlying obligation to you. I see a judgment for the defense.

My answers are for general information only. They are not legal advice. Answers assume California law. I am licensed in California, only. Answers must not be relied upon.<br> <br> Legal advice and counsel must be based on the interplay between specific exact facts and the law. This forum does not allow for the discussion of that interplay. My answer to any specific question would likely be different if that interplay were explored during an attorney-client relationship. <br> <br> I provide legal advice and counsel during the course of an attorney-client relationship only. The exchange of information through this forum does not establish such a relationship. That relationship is established only by personal and direct consultation with me followed by the execution of a written attorney-client agreement signed by each of us.<br> <br> The communications on this website are not privileged or confidential. I assume no duty to anyone by my participation on Avvo because I have answered or commented on a question. Specifically, I assume no duty to respond to any question, comment, telephone call, or email.<br> <br> All legal proceedings involve deadlines and time limiting statutes. So that legal rights are not lost for failure to timely take appropriate action and because I do not provide legal advice or counsel in answer to any question, if you are an interested party you should promptly and personally consult an attorney licensed in the appropriate jurisdiction for advice and counsel. See, also, Avvo's terms and conditions of use, specifically item 9, incorporated by this reference.<br>

Mark as helpful

3 lawyers agree

Posted

you may have a lot of problems, how much is the loan for?

My name is Stephen R. Cohen and have practiced since 1974. I practice in Los Angeles and Orange County, CA. These answers do not create an attorney client relationship. My answers may offend I believe in telling the truth, I use common sense as well as the law. Other state's laws may differ.. There are a lot of really good attorneys on this site, I will do limited appearances which are preparation of court documents it is , less expensive. However generally I believe an attorney is better than none.

Mark as helpful

Posted

If the underlying amounts are enough to buy a house you are best served hiring a strong litigation attorney to vigorously prosecute your claims against father and son and try to attach their assets pre judgement if grounds exists.

Good luck.

In addition to AVVO's disclaimer, please note that by this answer no attorney client relationship is intended mor entered into and unless there is a signed retainer agreement in place, neither me nor anyone in our office has intended to solicit clients nor reprints them. The answers are general in nature and without weighing specifics of particular query. No answer should be relied on in whole or in part, directly or otherwise to act or not to act in pursue of any of your potential claims in law or equity. You should consult with and obtain advise or representation of an attorney to protect your rights regarding your case or matter.

Mark as helpful

Criminal defense topics

Top tips from attorneys

What others are asking

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer

Browse all legal topics