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Husband’s agreement doesn’t preclude judgment against wife

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A company is allowed to sue both parties who executed a promissory note seeking recovery of owed funds because it will still only be entitled to one satisfaction on the debt, the Indiana Court of Appeals ruled Wednesday.

Lori Nicklas argued that Von Tobel Corp. should not have been granted summary judgment on its action seeking a judgment on a promissory note Nicklas and her husband, Shawn, signed in July 2009. The two did not pay off the note in full by the time it matured, so Von Tobel named both Shawn and Lori Nicklas as defendants, as the two were jointly and severally liable to Von Tobel under the note. Shawn Nicklas entered into an agreed judgment with Von Tobel for the full amount owed, plus interest and fees for a total of $34,696.89.

She argued the company was fully compensated through it settlement with her husband, and Von Toble was not entitled to any further recovery. A footnote points out at some point the couple separated and acted individually to defend against Von Tobel’s claim.

Lori Nicklas argued that granting summary judgment to Von Tobel effectively allows it to recover more than $73,000 from her and her husband on a debt with a principal balance of approximately $30,000.

After examining caselaw from as far back as 1872, the Court of Appeals concluded that an agreed judgment against one obligor does not merge and extinguish the obligation of another person jointly and severally liable on the same contract.

The judges pointed out that Von Tobel will not be placed in a better position than before the breach of contract because the company is entitled still to only one satisfaction of the debt. The separate judgments against the Nicklases merely allows Von Tobel the opportunity to recover from one or both of them as contemplated by the express terms of the contract, the judges held in Lori Nicklas v. Von Tobel Corporation, Individually, and d/b/a Von Tobel Lumber; and Von Tobel Lumber Company, Inc., 64A03-1310-CC-429.  

 

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