Pillon-Davey & Associates v. Contra Costa Water District (In re Pillon-Davey & Associates)

MEMORANDUM OPINION

Contra Costa County Water District (“CCWD”) filed a proof of secured claim in the Chapter 11 case filed by Pillon-Davey & Associates (“Pillon-Davey”). Pillon-Davey filed an objection to the claim and a counterclaim alleging that the total interest claimed by CCWD is usurious, thus relieving Pillon-Davey from any obligation to pay the interest and entitling Pillon-Davey to judgment against CCWD in the amount of treble the amount of the interest paid. This matter comes before the Court on a motion for summary judgment filed by CCWD and a cross-motion for summary judgment filed by Pillon-Davey.

FACTUAL BACKGROUND

In 1977 CCWD granted Jacque C. Pillon an option to purchase 2.37 acres of real property (“the real property”). On January 1, 1979, at the request of Mr. Pillon, CCWD conveyed title to the real property to Pillon-Davey. The purchase price was $593,614. CCWD gave Pillon-Davey a credit of $42,000 against the purchase price for sums paid in consideration of the option, leaving a balance of $551,614 due for the purchase. On January 1, 1979, Pillon-Davey executed a note in the amount of $551,614, payable to CCWD on December 31, 1981, bearing interest at 10%…