Evans v. Wright

505 F.2d 287 (4th Cir. 1974)

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Nature of the Case

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Facts

Wright and Evans engaged in coal mining, and Evans was the front man and Wright supplied the capital. Things did not go so well, and Wright decided it was time to get some of his investment back and wrote a check on the corporation for $115,000. A lawsuit ensued, and that resulted in a settlement agreement that divided the assets between them. That settlement also provided that they would equally divide any corporate tax refund. Wright received a refund of $13,607.61 but refused to split the funds as required. Wright argued that he was entitled to deduct $2,575 that Evans had received from the company nine days prior to the settlement agreement. Evans excused that withdrawal by his previous deposit into a company account $5,000 of his dividend money and $215 in additional personal funds. The jury found for Evans for the 1/2 tax refund but denied Evans' additional claim for $5,215 and Wright's setoff. Wright appealed claiming unfair prejudice by judicial comment.