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Lee v. Litster

Supreme Court of Idaho

January 20, 2017

GRANT LEE, JASON LEE, and SCOTT MCNAB, Plaintiffs-Respondents,
v.
JEREMY LITSTER and JESSICA LITSTER, husband and wife, Defendants-Appellants.

         2017 Opinion No. 2

         Appeal from the District Court of the Fourth Judicial District of the State of Idaho, Ada County. Hon. Samuel A. Hoagland, District Judge.

         The judgment of the district court is affirmed. Costs on appeal are awarded to respondents.

          Litster Frost Lawyers, Boise, attorneys for appellants. Seth H. Diviney argued.

          Stephen Beane, Boise, attorney for respondents.

          W. JONES, Justice.

         I. Nature of the Case

         In a case arising out of Ada County, Jeremy and Jessica Litster ("Jeremy, " "Jessica, " and collectively, the "Litsters") appeal from a district court dismissal on summary judgment. The case concerns the enforceability of three promissory notes, which were prepared and issued by Jeremy to Jason Lee ("Jason"), Scott McNab ("McNab"), and a non-party, Rick Lee ("Rick"). In January, February, April, and June 2011, 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.

         Grant Lee ("Grant"), Jason, and McNab (collectively, "Plaintiffs") filed a complaint against the Litsters on July 18, 2014, for breach of contract. On April 7, 2015, Plaintiffs filed a motion for summary judgment, which was granted on July 24, 2015.

         II. Factual and Procedural Background

         This case concerns the enforceability of three promissory notes prepared and issued by Jeremy. In February 2009, Jeremy learned of an "investment opportunity"[1] 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 ("Jenson").

         The promissory notes at issue arise from three deposits: (1) McNab deposited $25, 000 into Jeremy's bank account on March 12, 2009; (2) Jason deposited a total of $8, 000 between February 28, 2009, and March 13, 2009; and (3) Scott Lee, who is not a party to this appeal, deposited $10, 000 into Jenson's account on Rick's behalf.[2] In total, $900, 000 was transferred to Jenson for the "investment." In return, Jenson issued four promissory notes to Jeremy, totaling $900, 000. Additionally, Doug Roberts (Jeremy's former father-in-law) issued a personal guarantee, dated April 10, 2009, guaranteeing payment for the four promissory notes issued by Jenson.

         Ultimately, the "investment" failed, and Plaintiffs and other "investors" pursued repayment from Jeremy. On December 14, 2010, a letter was delivered to Jeremy, which was endorsed by Plaintiffs. The letter provided:

This is a final attempt to collect all promissory notes for all who invested in Marc Jenson's EB-5 project. Please send promissory notes to the following individuals that loaned you money for an EB-5 project, as promised. Of course per our original understanding and agreements, verbal or otherwise promised by you, ...

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