Opinion ID: 2570344
Heading Depth: 3
Heading Rank: 2

Heading: The Superior Court Properly Granted Erikson Summary Judgment on Rockstad's Usury Defense.

Text: Rockstad also moved for summary judgment on his affirmative defense that Erikson's loan arrangement was usurious according to AS 45.45.010(b). That statute provides: Interest may not be charged by express agreement of the parties in a contract or loan commitment that is more than five percentage points above the annual rate charged member banks for advances by the 12th Federal Reserve District on the day on which the contract or loan commitment is made. A contract or loan commitment in which the principal amount exceeds $25,000 is exempt from the limitation of this subsection. The interest rate charged by the Twelfth Federal Reserve District on the date Rockstad and Erikson made their arrangement was seven percent. Erikson claimed that the parties agreed to a credit-card-based interest rate of twenty percent, clearly more than five percentage points above the federal rate. As mentioned, Erikson claimed he had loaned $26,000 to Rockstad, thus putting the loan outside the reach of AS 45.45.010. Rockstad argued at summary judgment, however, that his transaction with Erikson involved two separate loans, each loan below the statute's $25,000 limit. Thus, Rockstad claims, the transaction should be void as unlawful. Rockstad supported his motion with an affidavit explaining that there had been two separate loans, and a copy of the two checks from Erikson that Rockstad claimed represented separate loans. Erikson admitted that he did in fact write two separate checks to Rockstad, but pointed out that the checks are both dated August 30, 1990 and insisted that they pertain to a single loan. On appeal, Erikson notes that the only evidence Rockstad offered to support his motion (besides the checks themselves) was his affidavit. Rockstad argues that this affidavit was sufficient to establish a genuine issue of material fact, and the superior court's grant of summary judgment to Erikson on the usury issue was thus inappropriate. A single affidavit may suffice to create a genuine issue of material fact precluding summary judgment, as Rockstad notes. [19] However, Rockstad's affidavit on this issue is largely irrelevant, because the facts that are not in dispute are sufficient to support summary judgment as a matter of law. As Rockstad himself admits, it is undisputed that there was only one promissory note between the parties, for the sum of $26,000. Since the Note constituted a contract between the parties, its proper meaning is a legal question. In interpreting a contract, we depart from its plain language only where the contract's language is ambiguous. [20] A court may find ambiguity in a contractual provision only where the contract as a whole and all extrinsic evidence support two different interpretations, both of which are reasonable. [21] There is no such ambiguity in the Note. The Note speaks in the singular only, of the sum of Twenty Six Thousand Dollars, and this loan, this debt, and this note. Nowhere does it even suggest that there were multiple loans involved. There is also, as Erikson suggests, a general presumption in American law that transactions are lawful and nonusurious. [22] And we are mindful of the venerable rule that where a contract is fairly open to two constructions, by one of which it would be lawful and the other unlawful, the former must be adopted. [23] Even assuming that the Note could possibly be read as providing for two separate loans, such a reading would necessarily imply that the Note constitutes an unlawfully usurious contract. Because the plain language of the Note shows that there was only one loan, for $26,000, and because even if the Note were ambiguous we would construe it to favor its legality, we decline to adopt Rockstad's interpretation of the Note, and affirm the grant of summary judgment to Erikson on this issue. [24]