In re Rose

Memorandum on Objection to Claim

Claimant Darwin Christ is a retired businessman who has, over the years, made loans as investments. In the past ten years, he has made about five loans to individuals. He has made three loans to debtor Jesse Rose: $70,000.00 on March 24, 2000; $50,000.00 on May 18, 2000; and $13,000.00 on August 7, 2000. The purpose of the loans was to finance Rose’s operation of a portable sawmill. Christ has filed a claim in this Chapter 7 case for $133,000.00. Rose objects to the claim, on ground of usury. The loans were made at 24% interest.

Christ concedes that the loans are usurious, and consents to reduction of his claim by the $17,980.00 he received from Rose. However, Rose argues that pursuant to the California Finance Lenders Law, and *193 specifically § 22750(a) of the California Finance Code, makes the entire claim unenforceable. That section provides:

(a) If any amount other than, or in excess of, the charges permitted by this division is willfully charged, contracted for, or received, the contract of loan is void, and no person has any right to collect or receive any principal, charges, or recompense in connection with the transaction.

The parties…