The Zeners purchased approximately 14 acres of forested property from Gutierrez, which resulted in the Zeners giving Gutierrez a promissory note. The Zeners then began to discover that trees were being removed from the parcel without their permission. Eventually, the Zeners filed a complaint accusing Guiterrez of hiring agents to remove the trees without the Zeners’ knowledge or permission. In the meantime, Gutierrez assigned the Zener promissory note to Velde for value. The Zeners claimed that, because of the damage to their property, they were entitled to a reduction in the amount owed on the promissory note. Velde asserted HDC status.

CASE QUESTIONS

1. Is the Zeners’ claim a real defense, personal defense, or recoupment?

2. Is Velde an HDC? Why or why not?
3. How does Velde’s HDC status impact the Zeners’ claim?