California Court of Appeals, First District, Third Division
May 23, 2014
ROBERT H. BISNO, Plaintiff and Appellant,
ROBERT J. KAHN et al., Defendants and Respondents. JAMES C. COXETER, Plaintiff and Appellant, ROBERT J. KAHN et al., Defendants and Respondents.
IT IS ORDERED that the opinion filed herein on April 25, 2014,
225 Cal.App.4th 1087; __Cal.Rptr.3d __, be modified as follows, and the petition for rehearing is DENIED:
1. On page 1, in the last sentence of the first full paragraph [225 Cal.App.4th 1093, advance report, 1st par., line 7], delete “and seek treble damages, ” so that the sentence reads:
The judgment debtors now claim the forbearance fees are usurious.
2. On page 5, in the first line [225 Cal.App.4th 1095, advance report, heading], replace the heading “The Coxeter and Bisno Usury Actions” with the following:
The Coxeter and Bisno Actions
3. On page 6, in the first sentence of the first full paragraph [225 Cal.App.4th 1096, advance report, 2d full par., line 1], delete “usury, ” so that the sentence reads:
In the action filed by Coxeter, the parties filed cross-motions for summary judgment.
4. On page 14, after the first sentence of the first full paragraph ending “as that term is used in the usury law" [225 Cal.App.4th 1103, advance report, 2d full par., line 3], add as footnote 4 the following footnote, which will require renumbering of all subsequent footnotes:
Coxeter asserts that he never suggested a “judgment” is a thing in action, instead claiming that “the judicial process of collection of unsatisfied judgments” qualifies as a thing in action. As we explain below, although a judgment may be distinct from the process of collecting a judgment, it is a distinction without a difference for purposes of our inquiry.
5. On page 20, in the first sentence of the last paragraph [225 Cal.App.4th 1108, advance report, last par., lines 1-2], delete “and counsel for Coxeter, ” so that the sentence reads:
At oral argument on appeal, counsel for Bisno responded that there is no requirement mandating the imposition of treble damages in a case in which usurious interest is received.
6. At the end of the third full paragraph on page 26, after the sentence ending “does not appear to be a widespread problem" [225 Cal.App.4th 1113, advance report, 3d full par., line 7], add as footnote 9 the following footnote:
Insofar as it may be claimed that a lender can evade the usury law by entering into a stipulated judgment with a borrower—and thus recharacterize a loan as a judgment—the claim is mistaken. When the form of a transaction is a “ ‘mere sham and subterfuge to cover up a usurious transaction, ’ ” a court will “ ‘pierce the veil of any plan designed to evade the usury law and in doing so to disregard the form and consider the substance.’ ” (West Pico Furniture Co. v. Pacific Finance Loans (1970) 2 Cal.3d 594, 603 [86 Cal.Rptr. 793, 469 P.2d 665].) If the substance of a transaction is a loan, a lender cannot avoid the usury law simply by structuring the form of the transaction to include entry of a stipulated judgment in favor of the lender.
There is no change in the judgment.
The petitions for rehearing are denied.