Brooks v. Hollaar

[CONTRACT LAW]

In Brooks v. Hollaar,[1] the supreme court held that the named payee on a promissory note has an economic interest in repayment and thus has standing to sue to collect on the loan regardless of the loan’s proceeds origination.[2] Between 2005 and 2006, Hollaar loaned $266,430 to Brooks and his wife in a series of four promissory notes.[3] Initially, the money for the loans belonged to Hollaar’s father, mother and sister.[4] They transferred the funds into Hollaar’s bank account and he then transferred the funds to Brooks.[5] Brooks failed to repay the loans within the notes’ allotted time frames and Hollaar filed suit in 2009 in order to recover his losses.[6] The lower court entered judgment in Hollaar’s favor on all four promissory notes.[7] On appeal, Brooks argued that because the money for the loans did not originate from Hollaar’s bank account, he had no economic interest in the performance of the notes and could only sue for nominal damages, not full contract damages.[8] The supreme court affirmed the lower court’s decision, reasoning that Hollaar’s economic interest arose from his status as named payee on the promissory notes.[9] The court further reasoned that Brooks’ contention was irrelevant because Hollaar was the funds transferor for all four notes as well.[10] Affirming the lower court’s decision, the supreme court held that the named payee on a promissory note has an economic interest in repayment and thus has standing to sue to collect on the loan.[11]

 



[1] 297 P.3d 125 (Alaska 2013).

[2] Id. at 128.

[3] Id. at 127.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Id. at 128.

[9] Id.

[10] Id.

[11] Id.

Brooks v. Hollaar

[CONTRACT LAW]

In Brooks v. Hollaar,[1] the supreme court held that the named payee on a promissory note has an economic interest in repayment and thus has standing to sue to collect on the loan regardless of the loan’s proceeds origination.[2] Between 2005 and 2006, Hollaar loaned $266,430 to Brooks and his wife in a series of four promissory notes.[3] Initially, the money for the loans belonged to Hollaar’s father, mother and sister.[4] They transferred the funds into Hollaar’s bank account and he then transferred the funds to Brooks.[5] Brooks failed to repay the loans within the notes’ allotted time frames and Hollaar filed suit in 2009 in order to recover his losses.[6] The lower court entered judgment in Hollaar’s favor on all four promissory notes.[7] On appeal, Brooks argued that because the money for the loans did not originate from Hollaar’s bank account, he had no economic interest in the performance of the notes and could only sue for nominal damages, not full contract damages.[8] The supreme court affirmed the lower court’s decision, reasoning that Hollaar’s economic interest arose from his status as named payee on the promissory notes.[9] The court further reasoned that Brooks’ contention was irrelevant because Hollaar was the funds transferor for all four notes as well.[10] Affirming the lower court’s decision, the supreme court held that the named payee on a promissory note has an economic interest in repayment and thus has standing to sue to collect on the loan.[11]

 



[1] 297 P.3d 125 (Alaska 2013).

[2] Id. at 128.

[3] Id. at 127.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Id. at 128.

[9] Id.

[10] Id.

[11] Id.