Judge: Christian R. Gullon, Case: 23PSCV01449, Date: 2023-08-17 Tentative Ruling
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Case Number: 23PSCV01449 Hearing Date: October 12, 2023 Dept: O
Tentative Ruling
Plaintiff’s APPLICATION FOR DEFAULT JUDGMENT is DENIED
without prejudice.
Background
This arises from a breach of a Loan and Security Agreement
(“Agreement”) between Plaintiff BMO HARRIS BANK N.A. an Defendants SUN
LOGISTICS INC and ANNIE YEH[1]
(Defendants) for the finance of certain collateral.[2]
On May 12, 2023, Plaintiff filed suit.
On May 24, 2023, Plaintiff filed the instant applications.
On July 24, 2023, default was entered against Defendants.
On August 24, 2023, the court granted Plaintiff’s
application(s) for writ of possession.
On August 29, 2023, Plaintiff filed the instant application
for entry of default judgment.
Discussion
The only noted defect is
regarding interest.
Pursuant to California Rules
of Court Rule 3.1800 subdivision (a) subsection (3), interest computations are
required. Here, Exhibit 17 attached to the declaration in support of default
judgment provides a ‘Loan Damage Calculator.’ However, according to the LDL,
Plaintiff is seeking interest based upon a contract rate of 10.33% and a
default rate of 18%, both of which are usurious. “‘“Usury is the exacting,
taking or receiving of a greater rate than is allowed by law, for the use or
loan of money.” [Citation.] A transaction is usurious if there is a loan at
greater than the legal rate of interest or an exaction at more than the legal
rate for the forbearance of a debt or sum of money due. [Citation.]’
[Citation.]
“California Constitution,
article XV, section 1 limits the interest rate for a ‘loan or forbearance’ of
money not primarily for personal, family or household purposes, to the higher
of: (1) 10 percent per annum or (2) 5 percent plus the rate of interest
prevailing on the 25th day of the month preceding the earlier of the date of
the extension of the contract to make the loan or forbearance or the date of
making the loan or forbearance, established by the Federal Reserve Bank of San
Francisco on advances to member banks under sections 13 and 13(1) of the
Federal Reserve Act. [Citation.]” [Citations.]
Therefore, the court denies the application without
prejudice for the filing of a supplemental declaration that provides a correct
computation of interest.
Conclusion
Based on the foregoing, the application is DENIED without
prejudice. Should the court receive the supplemental declaration and an
updated judgment (JUD-100 form), the court may grant the
application at the hearing.
[1] The individual defendant was the guarantor of the
agreement. (See Complaint, attached exhibits.)
[2] According to the agreement, the collateral at issue
are various vehicles, except for one as it was totaled and is the subject of an
insurance claim. (See Complaint, Exs. 1 (p. 23 of 86 of PDF); Ex. 3 (p. 31 of
86 of PDF); Ex. 5 (p. 39 of 86); Ex. 7 (p. 47 of 86 of PDF); Exs. 9, 11, and
13.) Thus, in total, Plaintiff seeks possession of eight (8) vehicles.