Henry

FACTS AND PROCEDURAL HISTORY

According to the complaint, defendant represented to plaintiff he was a principal in defendant Capital Investors, Inc., a company that loaned money to transportation companies. He also represented Capital needed funds to expand and told plaintiff that for any money he loaned Capital, Capital would pay him interest of 12 percent per annum. The complaint alleged that, based on such representations, in July 2008 plaintiff entered into a written agreement to loan Capital $250,000 with interest at 12 percent per annum, payable monthly. The loan was collateralized by nine commercial installment notes with a market value of over $740,000. The loan was due and payable in four years. Four months later plaintiff loaned an additional $400,000 to Capital on the same terms. Collateral was eight commercial installment notes valued at $850,000. Plaintiff and defendant executed a separate contract for this loan. Both contracts provided that if there was default on an interest payment, repayment of principal could be accelerated. As alleged in the complaint, in June 2009 Capital’s interest payment to plaintiff was returned for insufficient funds. Pursuant to the terms…