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Instead of grabbing the handle on the side, try dragging the lower right corner. Then make sure to drag it "down" as well, to allow for the extra length of the text.
I've had the same problem on some of my notes as well. What I've found is that it depends on how the text was entered into the note whether it will automatically wrap the text or not.
If the text is entered and the 'enter / return' key is used at the end to go to the next line when dragging the box handle to try and change it's size won't work.
If I do find situations like this in our drawings I edit the note and get it all on one line with out the line jumps and then adjust the note size and spaces from there. After doing this Charles' tip is the easiest.
Hope this helps...
Thanks Charles, that was it.
Dennis, I am not sure what your post is about. I can resize lines by using the lower left corner and dragging down and to the side, regardless of if the line is already wrapping, or ended with a return.