John E. Reese, III v. Daniel L. Hodges; Transform-X, Inc.

Summary

The United States District Court for the District of South Carolina grants Transform-X, Inc.’s motion to set off amounts Plaintiff received in settling claims against former Defendant COMSovereign Holding Corp. The court applies Arizona law pursuant to the promissory note’s choice-of-law provision and concludes that the settlement arose from the same injury as the claim against Transform-X. The court reduces Transform-X’s damages by $70,000 for cash and stock received and by any payments received on a $170,000 settlement promissory note.

Holdings

1. Arizona law governs the determination of the settlement credit because the promissory note expressly provides that it is governed, construed, and interpreted under Arizona law.
2. Transform-X is entitled to a reduction of the damages owed under the note based on Plaintiff's settlement with COMS because the settlement and the judgment concern the same injury. The reduction includes $70,000 for the cash and stock received and the amount of any payments received on the $170,000 settlement promissory note.

Questions Presented

1. Whether Arizona law governed the calculation of a settlement credit against damages owed under the promissory note.
2. Whether Transform-X was entitled to reduce the damages award by the cash, stock, and later payments received by Plaintiff under the settlement with COMS, despite Transform-X's failure to plead setoff or present the settlement details to the jury.

Disposition

other