Mencor Enterprises, Inc. v. Hets Equities Corp.

This appeal concerns applicability as a matter of law of the choice of law by parties to a contract. A California borrower sued its Colorado lender for treble the amount of interest paid on a promissory note, claiming the 44 percent rate was usurious. The note provided for application of Colorado law which permits an interest rate not to exceed 45 percent. The court sustained the lender’s demurrer to the complaint for usury without leave to amend, holding as a matter of law the Colorado 44 percent rate selected by the parties did not constitute usury entitling the California borrower to sue for damages under California usury law. We shall conclude the applicability of Colorado law in the circumstances presented involves factual determinations, and reverse.

I

The demurrer admits the well-pleaded allegations of the complaint. We recite those allegations as our factual statement.

Mencor Enterprises, Inc., a California corporation, signed as maker a promissory note for and received $140,000. Hets Equities Corporation, a Colorado corporation, was the lender. The note called for 44 percent interest, principal and interest payable in Colorado or at any address as designated…