S & N Equipment Co. v. Casa Grande Cotton Finance Co.
Opinion
Lead Opinion
Reinhardt, J.
Plaintiff, S & N Equipment Company (S & N), a general partnership, appeals the district court’s denial of its motion for summaiy judgment and the grant of summary judgment in favor of the defendants, Casa Grande Cotton Finance Company (Casa Grande) and Chiekasha Cotton Oil Company (Chiekasha). S & N alleges that Casa Grande violated state and federal banking law by conditioning financing on the purchase of ginning services from gins owned by Chiekasha. The district court concluded that the transactions were not illegal under Arizona’s usury law or the Bank Holding Company Act. We affirm in *340 part and reverse and remand in part for further proceedings.
I
From 1988 to 1991, Casa Grande, a wholly-owned subsidiary of Chickasha, made loans to S & N for cotton crop production. 1 The loans totalled more than $3 million, and the interest on the loans exceeded ten percent from January 1,1988 to May 15,1991. 2 Casa Grande expressly conditioned the loans on S & N’s processing its cotton at cotton gins owned by Chickasha. 3 Casa Grande required its borrowers to pledge their crops as collateral, maintaining that the ginning requirement ensures proper monitoring of the crops.