Pinchuck v. Canzoneri
| Decision Date | 08 February 2006 |
| Docket Number | No. 4D05-164.,4D05-164. |
| Citation | 920 So.2d 713 |
| Court | Florida District Court of Appeals |
| Parties | Howard PINCHUCK, Appellant, v. Karen CANZONERI, Appellee. |
Robert B. Resnick of The Law Office of Robert B. Resnick, Boca Raton, for appellant.
Peter B. Weintraub of Law Offices of Weintraub & Weintraub, P.A., Boca Raton, for appellee.
Howard Pinchuck appeals an amended final judgment after a bench trial in which the trial court found in favor of Karen Canzoneri on counts I and V of a seven count complaint. The issue before this court is whether the transactions referred to in counts I and V, although couched in terms of "investment profit," are in fact usurious loans and therefore invalid and unenforceable. Although the transactions were claimed to be investments, we hold that they were in fact usurious and therefore, invalid and unenforceable.
In Count I, paragraph 7, Plaintiff swears under oath to the following:
On or about December 18, 2000, Plaintiff and Defendant PINCHUCK entered into the Agreement whereby Defendant borrowed $50,000 from Plaintiff and Defendant agreed to repay the $50,000 with interest. A true and correct copy of the Agreement is attached hereto and made a part hereof as Exhibit "1".
Exhibit 1 to the Verified Complaint is a handwritten note that begins:
In exchange for $50,000.00 Howard Pinchuck will repay to Karen Canzoneri 12% per month for 12 consecutive months beginning March 1, 2001 — as an investment profit. "interest on $50,000.00".
This is an annualized 144 percent rate of return on principal.
In Count V, Plaintiff alleges as follows:
On or about April 2, 2001, Plaintiff and Defendants PINCHUCK and MILLER1 entered into the Agreement whereby Defendants borrowed $36,000 from Plaintiff and Defendants agreed to repay the $36,000 with Interest. A true and correct copy of the Agreement is attached hereto and made a part hereof herein as Exhibit "5".
Exhibit 5 to the verified petition is a handwritten note from the Defendant to the plaintiff and states:
Note: Agreement between Karen Canzoneri and Walter Miller and Howard Pinchuck.
Karen Canzoneri is advancing to the above mentioned parties $36,000 to be repaid on or before 6/1/01 with an investment profit of $36,000 total being $72,000.
The annualized rate of return for this transaction is 608 percent.
Pinchuck argues that the trial court erred in basing its ruling on counts I and V on the use of the term "investment profit" in the agreement. It should have considered the substance of the transactions and the intent of the parties and determined that the interest charged was usurious. We agree.
In Jersey Palm-Gross, Inc. v. Paper, 658 So.2d 531 (Fla.1995), the supreme court stated:
The Florida Legislature enacted Chapter 687, Florida Statutes (1993), to protect borrowers from paying unfair and excessive interest to overreaching creditors. This chapter sets limits on interest rates and prescribes penalties for the violation of those limits. Section 687.071(2), Florida Statutes (1993), defines criminal usury as the willful and knowing charge or receipt of interest in excess of 25% per annum. Id. The civil penalty for violating this statute is forfeiture of the entire principal amount. § 687.071(7), Fla.Stat. (1993).
Jersey Palm-Gross, Inc., 658 So.2d at 534.
The four requirements of a usurious transaction are:
(1) that such transaction must be a loan, expressed or implied; (2) that an understanding must exist between the parties that the money lent shall be returned; (3) that for such loan, a greater rate of interest than is allowed by law shall be paid or agreed to be paid as the case may be; and (4) that there must exist a corrupt intention to take more than the legal rate for the use of the money loaned.
Diversified Enters., Inc. v. West, 141 So.2d 27, 29 (Fla. 2d DCA 1962).
The trial court found that the agreements included in counts I and V were valid and binding contracts whereas the agreements sued upon in counts II, III, IV, VI and VII were usurious under section 687.071, Florida Statutes (2000), and therefore unenforceable. The only distinction between...
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