1. Explain what went wrong in the drafting of the note.

2. Why does the court hold the parties to the terms of the note?

Green Valley Growers, Inc. (GVG) was a plant nursery owned by O. Wayne Massey and others. From 2001 until the GVG’s bankruptcy, KC Crushed provided GVG raw materials and construction services, including the creation of ditches and irrigation ponds, building of rock roads, beds and loading docks, as well as the work on some of the greenhouses located on the property operated by GVG. GVG took out a loan and paid $396,527.10 of the proceeds to KC Crushed. On February 27, 2007, Massey and Hurley Ray Smith (owner of KC Crushed) executed a Promissory Note that stated: “I, Wayne Massey promise to repay Ray Smith for a Promissory Note in the amount of $400,000.00 with Interest.”

Smith and Massey (defendants) contend that the Note “incorrectly listed Smith as the lender and Wayne Massey as the borrower.” Smith stated that the Note was in fact between KC Crushed and GVG, not himself and Massey, “I did not draft or prepare the Promissory Note. I did not review the Promissory Note. When the Promissory Note was presented to me, I did not read it and simply signed the note as written ... I was signing on behalf of KC Crushed Concrete, not myself individually. Wayne Massey and I agreed that [GVG] would repay KC Crushed Concrete with periodic $5,000 loan repayments, as initial interest only payments.” From April 2007 until December 2008, GVG paid Smith—not KC Crushed—$80,000 toward the Note, in $5,000 monthly installments.

Smith and KC Crushed moved for summary judgment that they are not liable to Randy Williams—the bankruptcy trustee for the GVG bankruptcy.

JUDICIAL OPINION

ROSENTHAL, District Judge … A threshold issue is whether Massey—not GVG—was the borrower and whether Smith—not KC Crushed—was the lender on the 2007 Promissory Note. The Note plainly stated that Massey was the borrower and Smith was the lender. But GVG wrote the $5,000 monthly checks to Smith, not to KC Crushed.

Smith’s argument that he did not read the Note before he signed is unavailing. “Absent fraud, one is presumed to know the contents of a document and has an obligation to protect themselves by reading documents prior to signing.” The parties’ subjective beliefs are also unavailing to contradict the clear Note terms. “[A party’s] subjective belief of the purpose of [a contract] can not contradict the intent of the parties expressed within the four corners of the document.” “The rights and obligations of the parties to……………………….