Lee v. Litster

Jeremy and Jessica Litster appealed a district court dismissal on summary judgment. The case concerned the enforceability of three promissory notes, which were prepared and issued by Jeremy to Jason Lee , Scott McNab, and a non-party, Rick Lee. In February 2009, Jeremy learned of an "investment opportunity" that required a minimum buy-in of $500,000. Jeremy and Jason solicited close friends and family to "invest" by transferring money to them, which would later be transferred to Jeremy's relative, Marc Jenson. Ultimately, the "investment" failed, and Plaintiffs and other "investors" looked to Jeremy for repayment. Jeremy made payments on these promissory notes. However, in July 2011, Jeremy stopped making payments because he learned that the Idaho Department of Finance had been notified regarding his investment solicitation activity. Plaintiffs filed a complaint against the Litsters in 2014, alleging three counts of breach of contract for failure to pay the amounts due according to the promissory notes. The Litsters answered asserting, inter alia, the affirmative defense that the notes were issued under duress. Plaintiffs filed a motion for summary judgment of the issues of breach of contract and duress. The district court granted Plaintiffs' motion. On the issue of duress, the district court found in Plaintiffs' favor under two different legal theories: (1) the Litsters failed to provide sufficient evidence of their claim for duress to create a genuine issue of material fact; and (2) the district court noted that the undisputed evidence demonstrated that Jeremy ratified the promissory notes by making payments thereon. It concluded that, in addition to the absence of a genuine issue of material fact, the Litsters' "claim for duress fails because [Jeremy ] ratified the contracts by making payments on the [n]otes." The Supreme Court affirmed summary judgment, finding that the Litsters failed to contest the alternate grounds upon which the summary judgment was granted. View "Lee v. Litster" on Justia Law