In Re J. David Dominelli, Debtors. M. Larry Lawrence v. Steinford Holding B v. a Netherlands Corporation
Opinion
Opinion
Pregerson, J.
Appellant M. Larry Lawrence (“Lawrence”), a junior lienholder on a jet owned by the bankruptcy estate of J. David. Domi-nelli (“Dominelli”), brought suit against ap-pellee Steinford Holding B.V. (“Steinford”), a senior lienholder on the jet. Lawrence objected to Steinford’s lien on the ground that the loan from which it derived was usurious. The bankruptcy court held that Lawrence could not attack the loan as usurious because the estate’s trustee had brought and then settled a usury claim against Steinford. The district court affirmed the bankruptcy court’s ruling. Lawrence appeals from the district court’s ruling. We affirm. The trustee’s court-approved settlement of the estate’s usury claim against Steinford operates as res ju-dicata to bar Lawrence from again raising the usury claim on behalf of the estate. Moreover, California law does not provide Lawrence with the right to raise the usury defense on his own behalf.
FACTS
In June 1983, Steinford lent Dominelli $3,150,000. Steinford took as security a lien on Dominelli’s Grumman Gulfstream II jet. The loan agreement provided that Dominelli would pay interest at the rate of 22% per annum.