Facts

On Sept. 14, 2005, Tamela King, as trustee for Irma King Trust (IKT), entered into a loan agreement with defendant Curtis Platte for $250,000. The loan note obligated IKT to repay the loan with interest. As collateral, King executed a trust deed on IKT property located at 5250 Kingsgrove Drive in Somis. The deed designated the trust or Platte as beneficiary and California Land Title Company was its trustee. The loan note became due on Oct. 1, 2006 but the balance could not be paid until Dec. 11, 2006, as there was a delay in selling the trust property. Before Platte would acknowledge receipt of full payment on the loan, he demanded (and received) payment of a late charge of 6% on the entire principal of the loan for the months of Oct. and Nov. 2006. The late payment charges paid by IKT on the loan amounted to $36,440. Plaintiff Jim Schneiders became the most recent trustee of IKT and filed suit against Platte for usury.

PLAINTIFF'S CONTENTIONS:
The plaintiff contended that the late charge imposed was a penalty and unenforceable under California statute. As well, the late charges amounted to usury as they far exceeded the annual interest rate allowed by law.

DEFENDANT'S CONTENTIONS:
Platte countered that the late charges were allowed per their loan agreement.

Damages

The plaintiff sought damages in the amount of $36,440, interest, attorney fees, and other statutory damages.

Result

The court found in favor of plaintiff awarding a total of amount of $40,489.17.