Zornes v. Zornes

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After Eric Zornes won a lottery, Eric and his wife, Julia, commenced a gifting plan to Andy Wolfe, Jason Wolfe, and Jason Reed. These gifts were structured as loans, and each borrower made a promissory note for his loan, payable to Julia’s and Eric’s revocable trusts jointly. Andy’s note was secured by a deed of trust for real property. Julia and Eric later divorced pursuant to a settlement agreement. When Eric found that Andy’s house had been sold and that Julia had retained the proceeds of the sale, Eric filed this complaint alleging that Julia had converted the proceeds of Andy’s note. Julia counterclaimed for partition of the Jason Wolfe and Jason Reed notes. The district court granted summary judgment in favor of Julia, concluding that even if Julia had converted the proceeds, the settlement agreement operated as an accord and satisfaction. The court also ordered partition of the promissory notes for Jason Wolfe’s and Jason Reed’s loans. The Supreme Court reversed, holding (1) Eric was not entitled to summary judgment on his conversion claim; (2) the settlement agreement did not constitute an accord and satisfaction; and (3) the lower court erred in the method by which it partitioned the Jason Wolfe and Jason Reed notes. View "Zornes v. Zornes" on Justia Law