Soleimany

INTRODUCTION

Under California law, if a promissory note evidencing a loan stipulates a usurious rate of interest—that is, a rate in violation of the limits set by article XV, section 1 of the California Constitution—the interest provision is void, and the principal sum is deemed due at maturity of the note without interest (meaning that any interest paid is applied against the principal so as to reduce the principal obligation owed). However, if any of the principal amount is unpaid at the date of maturity, the lender is entitled to damages in the form of prejudgment interest on any such unpaid amount from the date of maturity of the loan to the date of judgment. The appropriate rate of prejudgment interest is determined by the law applicable to contracts that do not stipulate a legal rate of interest.1 In this case, in 2008, defendant Mostafa Narimanzadeh borrowed $350,000 from plaintiffs Kiumars and Shanaz “Suzy” Soleimany (husband and wife). The loan was documented by a promissory note which was secured by a deed of trust on real property belonging to defendant Narimanzadeh. In 2009, defendant Fariba Atighehchi borrowed $150,000 from plaintiff Shanaz Soleimany. The loan was…