Court Opinion

ID: 9914926
Source: CourtListenerOpinion
Date Created: 2024-01-03 18:02:36.592277+00
Date Added: 2024-06-11T13:15:23.947437
License: Public Domain

Filed 1/2/24 Hart v. Hart CA5

                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                       FIFTH APPELLATE DISTRICT

 BETH MAE HART,
                                                                                             F084689
           Plaintiff and Respondent,
                                                                              (Super. Ct. No. VCU286706)
                    v.

 ROBERT HART,                                                                             OPINION
           Defendant and Appellant.

         APPEAL from a judgment of the Superior Court of Tulare County. Bret D.
Hillman, Judge.
         Robert Hart, in pro. per., for Defendant and Appellant.
         Williams, Brodersen, Pritchett, Burke and Ruiz, Steven R. Williams, for Plaintiff
and Respondent.
                                                        -ooOoo-
       This case arose from a loan made by Robert and Elizabeth Hart to Beth Hart. Beth
Hart subsequently initiated this action on grounds the terms of the loan were usurious.
The matter proceeded to a jury trial on issues related to the usurious interest rate
applicable to the loan. The jury reached a verdict in favor of Beth Hart. Robert Hart
appeals. We affirm.
                  FACTUAL AND PROCEDURAL BACKGROUND
       Robert and Elizabeth Hart served as trustees of a family trust called Diversified
Management. On March 8, 2016, Robert and Elizabeth Hart entered into a loan
agreement with Beth Hart.1 Pursuant to the loan agreement, Diversified Management
loaned Beth the sum of $ 29,000, payable over a five-year term ending on March 8, 2021.
The loan agreement provided, in part: “The balance of any one month will accrue
interest at a rate of 1½% (one and one half %) per month (approx. 18% annually).
Interest accrued from the previous month will be added to the balance owed on the first
of the next month.”
       Beth signed a promissory note on March 7, 2016. The note provided, in part: “I
promise to pay to Diversified Management (a family trust dated 12-29-2007), Robert and
Elizabeth Hart co-Trustee[s] or assignee, the sum of Twenty Nine Thousand Dollars
($29,000.00) or whatever the balance of the loan is at such time, including interest, by
March 8th, 2021. Interest on this Note’s balance will be calculated at 1½% (one and one
half percent) per month on any unpaid balance on the first of each month.” The note
further provided: “Monthly interest charges of 1½ % of current balance will be added to
the balance at the first of each month, thereby increasing the balance of this Note.”
       In addition, the promissory note stated: “If this note is not paid when due on
March 8th 2021, the undersigned promises to pay in addition all costs associated with

       1 For purposes of clarity, we will refer to the parties by their first names. No
disrespect is intended.

                                              2.
collection and reasonable attorney’s fees incurred on account of such collections, whether
or not suit is filed hereon.” The loan and promissory note were secured by a home owned
by Beth on Sycamore Drive in Three Rivers (Sycamore property). Beth signed and
recorded a deed of trust on the Sycamore property and provided the deed of trust to
Robert and Elizabeth as security for the loan and promissory note.
        In December 2016, Robert and Elizabeth entered into another agreement with
Beth, pursuant to which Elizabeth would manage Beth’s Sycamore property, which
served as an AirBnB rental. The new agreement, referred to by the parties as the
“management agreement,” contemplated that part of the AirBnB rental proceeds would
be deposited into a bank account controlled by Robert and Elizabeth. The proceeds were
to be used to pay expenses related to the Sycamore property/AirBnB business and “to pay
down the balance of the Note dated 3-7-16.” The management agreement further
contemplated that Robert and Elizabeth would lend additional money to Beth as needed
to pay residual bills, with any such amounts to be added “to the existing Note dated 3-7-
16,” “thereby increasing the amount owed on said Note and [accruing] interest at 1.5%
monthly.”
        In December 2016, Robert and Elizabeth added $6,694 to the original amount
borrowed by Beth, which monies were used to pay bills connected to the Sycamore
property/AirBnB business. The management agreement was dissolved in November
2017. Thereafter, Robert and Elizabeth appropriated the sum of $5,648, the balance of
the AirBnB-related bank account controlled by them, and credited it towards the accrued
interest (calculated at the rate of 1.5 percent per month) on the loans they had made to
Beth.
        Beth engaged counsel at that point. On March 22, 2018, Beth’s counsel sent a
letter to Robert and Elizabeth advising them that the loans they had made to Beth violated
the usury provisions of the California Constitution. The letter addressed to Robert and
Elizabeth stated, in part:

                                             3.
              “As you are aware we represent [Beth] who has referred to us the
       issue of the loan you made to her in 2016. Due to the terms set forth in the
       promissory note the transaction was and is unlawful. The fact that interest
       is being charged at the compounded rate of 1.5% per month (effectively
       19.56% per annum) constitutes usury.

              “The California Constitution, Art. XV, § 1 provides that the interest
       rate on a loan of any money is 7 percent per annum, but it is competent for
       the parties to any loan of money to contract for a higher rate of interest as
       specified. Thus, parties to any loan of money for use primarily for
       personal, family, or household purposes may nevertheless contract in
       writing for an interest rate not exceeding 10 percent per annum. In this
       context, however, a loan is not deemed for use primarily for personal,
       family, or household purposes if its proceeds are used primarily for the
       purchase, construction, or improvement of real property.

              “Parties to any loan of money for use other than primarily for
       personal, family, or household purposes may also contract in writing for an
       interest rate other than the 7 percent rate, if the rate does not exceed the
       higher of (a) 10 percent per annum or (b) 5 percent per annum plus the rate
       established by the Federal Reserve Bank of San Francisco on advances to
       member banks. For the purposes of determining the maximum rate
       permitted under (b), the rate used in the computation is that which prevails
       on the 25th day of the month preceding the earlier of (1) the date of
       execution of the contract to make the loan, or (2) the date of making the
       loan [Cal. Const., art XV, § 1(2)]. In your case the Federal Reserve rate
       was 1.0%, thus the highest rate of interest you could have arguably charged
       is 10%.

               “Any agreement or contract of any nature that provides for an
       interest rate greater than the maximum rate allowed under Cal. Const., art.
       XV, § 1, or that provides for compounded interest or interest on interest, is
       null and void as to any agreement or stipulation to pay interest. When a
       loan is usurious the creditor is entitled to repayment of principal only.”
       On March 27, 2018, Robert responded in writing to the March 22, 2018 letter from
Beth’s counsel. In his response, Robert stated in part:

              “We are hopeful that you can convince [Beth] to either sell or
       refinance the property and pay us off in full before we are forced to call the
       Note. We are no longer interested in helping her with her financial
       difficulties.

                                             4.
              “Our loan to Beth is a private loan between private people secured
       by real property. Beth Hart is fully aware of all contracts she signed and
       agreed to and further ask[ed] us for another loan when she ran into more
       financial difficulties. That is why we lent her more money and entered into
       the Management contract dated 12-26-16 (attached) in an effort to keep her
       finances solvent while we are invested in the venture.

              “We will be expecting her to comply with all contracts, Notes and
       agreements that we have with her, including the interest rate she agreed
       [to]. We would have never entered into the agreement for any less interest.
       We wish to avoid suing her for breach of contract on the management
       contract, so we are hopeful she can pay us off and go about her way.

             “Enclosed herein is a full accounting of how much she currently
       owes. We are also including a copy of the Management Contract signed
       12-26-16, along with her hand written instructions dated 12-26-16 to apply
       moneys collected to pay down the Note.

               “Your contention that our personal loan to her is illegal and subject
       to the California Constitution is in error. Of course, the only entities
       subject to the CA Constitution is government and consenting commerce.
       There is no mechanism of due process or law that could force private
       people to be subject to the jurisdiction of the CA Constitution absent
       consent. We are not denying that the CA Constitution has the verbiage you
       refer to. We are expressly claiming that no proof exists that we or the loan
       agreement is subject to the CA Constitution.”
       Subsequently, on January 21, 2021, Robert sent another letter to Beth’s counsel.
The letter stated, in part: “As you are aware, the loan to [Beth] [was] referenced by Deed
of Trust and promissory note dated March 7th 2016. [¶ ] We are informing you that we
expect payment in full on March 8th, 2021. If full payment of $75,902 is not received on
or before March 8th 2021[,] we will proceed with foreclosure. Please be aware that
according to our agreement, if this goes into litigation, Beth Hart has agreed to pay all
legal fees required to foreclose and collect.”
       In February 2021, Beth sent a check for $5000 to Robert and Elizabeth, which
check was received by Robert and Elizabeth on February 13, 2021. Robert
acknowledged receipt of the $5,000 check in a letter dated February 23, 2021, to Beth’s
attorney. In the letter, Robert stated, in part: “We have subtracted the $5,000 payment

                                                 5.
from the ledger balance of the account.… The payoff amount on March 7th 2021 will be
$70,887.”
       In March 2021, Beth sent a check for $3,500 to Robert and Elizbeth. In a letter
dated March 29, 2021, Robert acknowledged receipt of the $3,500 check and represented
he had applied the $3,500 check amount to the accrued interest on the loan. At this point,
Robert unilaterally changed the interest rate on the loan to 10% per annum (simple
interest) and applied it retroactively to the date of inception of the loan (March 2016).
Thus, Robert’s March 29, 2021 letter included a ledger showing an outstanding principal
balance of $35,854 and an outstanding interest balance of $3,236, for a total loan balance
of $39,090, as of March 28, 2021.
       On April 13, 2021, Beth sent a check for $2,000 to Robert and Elizabeth. On
April 15, 2021, Beth filed a “complaint for recovery of usurious interest and for
declaratory relief,” initiating the instant matter. (Unnecessary capitalization omitted.)
       Thereafter, on April 21, 2021, Robert and Elizabeth recorded, through a
foreclosure service, a notice of default and election to sell under deed of trust, with
Tulare County. The notice declared a default of “$77,538.98 as of 4/20/2021.” Beth’s
brief represents the default figure was “based on an interest calculation of 18%
compounded monthly.”
       On July 21, 2021, Robert and Elizabeth sent a formal “payoff demand” to Beth,
issued by a foreclosure service as a prelude to initiating a trustee’s sale of the Sycamore
property pursuant to the duly recorded deed of trust for that property. Attached to the
payoff demand was a ledger documenting that the aforementioned checks for $5,000,
$3,500, and $2,000 sent by Beth over the period from February-April 2021, had been
cashed and applied to the interest that had accrued on the loan. The ledger reflected a
total outstanding principal balance of $35,854 and a total outstanding interest balance of
$2,726, for a total outstanding loan balance of $38,580. The ledger reflected an interest

                                              6.
rate of 10% per annum (simple interest) starting from the inception of the loan in March
2016.
        In September 2021, at the summary judgment stage of the instant matter, Robert
and Elizabeth noted in papers filed with the court, that they had not in fact cashed Beth’s
aforementioned checks to them in the respective amounts of $5,000, $3,500, and $2,000.
Robert and Elizabeth eventually returned the checks to Beth’s attorney on August 22,
2021, on grounds the checks were made out to Diversified Management rather than to
Robert and Elizabeth individually. The checks were then reissued for the original
amounts, with the original payment dates, in the names of Robert and Elizabeth. Robert
and Elizabeth did not negotiate the replacement checks either and returned the
replacement checks to Beth’s attorney as well. Thereafter, on September 30, 2021, Beth
sent Robert and Elizabeth a check in the amount $11,000; this check was also not cashed.
        On September 27, 2021, Robert and Elizabeth, through a foreclosure company,
recorded an updated notice of default and election to sell under deed of trust, with Tulare
County. The notice declared a default amount of “$51,084.98 as of 9/08/2021” This
default amount reflected an applicable interest rate of 10% per annum (simple interest),
as well as the fact that Robert and Elizabeth did not cash the above-described check
payments that Beth had made at various points in 2021 (that is, the check amounts were
not reflected in the default balance).
        On November 4, 2021, Robert and Elizabeth filed a “verified cross complaint for
compensatory and punitive damages for breach of contract, promissory fraud, abuse of
process.” (Unnecessary capitalization omitted.) Robert and Elizabeth dismissed their
cause of action for breach of contract prior to trial. As for Beth’s complaint, Elizabeth
was dismissed as a defendant under the operative complaint on April 7, 2022, with
Robert and Diversified Management remaining as defendants.
        Beth’s operative complaint and the remaining claims in the cross-complaint were
tried to a jury in a two-day trial on June 1-2, 2022. After the parties rested, the court

                                              7.
granted Beth’s motion for nonsuit as to defendants’ cross-complaint. As to Beth’s
claims, the trial court, among other instructions, instructed the jury, without objection, as
to numerous pertinent facts derived from defendants’ discovery responses and verified
pleadings. The jury found, on a special verdict form, that: (1) defendants loaned money
to Beth pursuant to a written agreement; (2) the interest rate specified in the written
agreement exceeded the authorized maximum rate of 10% per annum; (3) defendants
intended to enter into the loan agreement at an interest rate in excess of 10% per annum;
(4) the loan was absolutely repayable; (5) Beth paid $5,648 in interest between March 8,
2016 and April 15, 2019; (6) Beth paid $10,500 in interest between April 16, 2020 and
April 15, 2021; and (7) Beth paid $11,000 in interest between April 15, 2021 and the time
of trial.
        On June 3, 2022, the court entered judgment in favor of Beth. The judgment
reflected that defendants’ loans to Beth were usurious and that Beth was entitled to a
credit of $27,148 against the total principal amount of $35,854. The $27,148 amount
credited against the principal was based on the payments tendered by Beth ($5,648 +
$10,500 + $11,000). The judgment further provided that Beth was entitled to attorneys’
fees and court costs. The same day, Beth filed a motion for attorneys’ fees and costs.
The trial court determined: “Here, Plaintiff is the prevailing party pursuant to the jury’s
findings and verdict in her favor. She is entitled to attorneys’ fees pursuant to the
contract [promissory note].” The court granted Beth’s motion and awarded $68,185.25 in
attorney fees and $1,906 in costs. Robert appealed.
                                       DISCUSSION
I.      Plaintiff Had Standing to Sue
        Robert argues that Beth did not have “standing to sue” because she “was only
being charged 10% simple interest at the time the Complaint was filed.” He further
contends Beth was never injured and did not allege an injury in her complaint. He
concludes: “The Respondent should have never been allowed to sue the Appellant for

                                              8.
this one reason alone [i.e., a lack of injury], not to mention that the Appellant voluntarily
lowered the interest rate of the loan to 10% simple interest 30 days before the Complaint
was served.” Robert does not support his contentions with citations to applicable and
relevant legal authorities. We reject his contention that Beth lacked standing to bring the
instant matter.
       A.        Legal Framework
       Miller & Starr outlines the history of usury laws: “There was no usury by
common law and, prior to the advent of legislation, money was an unrestricted
commodity subject to the law of supply and demand. The laws of usury are a fairly
recent commercial development and are purely and solely creatures of modern statutory
and state constitutional provisions.” (Miller & Starr, 11 Cal. Real Est. (4th ed. 2023)
§ 37:2, fn. omitted.) “The first regulation of maximum interest charges in California was
the Usury Act adopted in 1918 as an initiative measure, which established the maximum
rate of 12 percent per annum.” (Ibid, fn. omitted.) “A constitutional amendment in 1934
reduced the maximum interest rate to 10 percent per annum and provided for certain
exemptions for institutional lenders.” (Ibid, fn. omitted.) “In 1979, during a period of
historically high market rates of interest, the people of the state of California adopted
another initiative measure (Proposition 2) that amended the Constitution [Cal. Const. art.
XV (Amend.), effective Nov. 7, 1979] to establish new usury limits and to provide for a
much broader range of exemptions from the application of the usury limitations.” (Ibid,
fns. omitted.)
       “The current usury limitations applicable to nonexempt loans by nonexempt
lenders are now 10 percent per annum for some loans, and a fluctuating rate equal to five
percent over the Federal Reserve Bank discount rate for other loans, which may exceed
10 percent per annum.” (Miller & Starr, 11 Cal. Real Est. (4th ed. 2023) § 37:2.) Here,
the jury was instructed, with regard to the applicable maximum interest rate on the loan at

                                              9.
issue, under California law, as follows: “As between the plaintiff and defendants the
maximum authorized rate of interest which can be charged on a loan is 10% per annum.”
       “The essential elements of usury are: (1) The transaction must be a loan or
forbearance; (2) the interest to be paid must exceed the statutory maximum; (3) the loan
and interest must be absolutely repayable by the borrower; and (4) the lender must have a
willful intent to enter into a usurious transaction.” (Ghirardo v. Antonioli (1994) 8
Cal.4th 791, 798.)
       “The usurious character of a transaction is determined by the amount agreed to be
paid, agreed at the time of making the loan. ‘The usurious character of the contract is not
determined by the amount of interest the borrower has paid thereon, but by the amount of
interest he has agreed to pay on his said indebtedness. He may not have paid a dollar of
interest on his indebtedness yet if the contract calls for a greater rate of interest than that
permitted by the statute, the transaction is usurious, and no interest can be collected
thereon.’ ” (Abbot v. Stevens (1955) 133 Cal.App.2d 242, 248-249 [“ ‘The intent actually
to get excessive interest, as a controlling element, is the intent as it existed as of the time
when the agreement was made.’ ”].)
       Moreover, “[i]t is the rule, and has been so held many times in this state, that
intent to execute a usurious rate of interest is conclusively presumed from a note or
instrument which clearly shows on its face that it is usurious, and no evidence of intent or
lack of such intent is required.” (Denny v. Hartley (1957) 154 Cal.App.2d 304, 306; see
Martin v. Ajax Construction Co. (1954) 124 Cal.App.2d 425, 432 [“Intent to exact a
usurious rate of interest is conclusively presumed from an instrument which clearly
shows the character of the agreement and no evidence of intent or lack of same is
required.”]; Paillet v. Vroman (1942) 52 Cal.App.2d 297, 306 [“in a case such as this
where upon its face the promissory note discloses that the interest charged does in fact
violate [the] law, intent is immaterial”].)

                                              10.
        In addition, “[w]hen an instrument is usurious no interest whatsoever is
recoverable by the usurious lender.” (Maze v. Sycamore Homes, Inc. (1964) 230
Cal.App.2d 746, 755; Strike v. Trans-West Discount Corp. (1979) 92 Cal.App.3d 735,
744 [“no interest whatsoever can be claimed by the usurious lender”]; Verbeck v. Clymer
(1927) 202 Cal. 557, 562 [“the obligation to pay interest is void” where the transaction is
usurious].) Despite a usurious transaction, the creditor may recover the principal of the
loan. (Simmons v. Patrick (1962) 211 Cal.App.2d 383, 389 [“the principal of [a] usurious
transaction is recoverable”].)
        B.     Background
        At the motions in limine hearing in this matter, the trial court addressed the issue
of standing. The trial court stated: “Defendant can’t argue that the plaintiff lacks
standing. I mean, there’s kind of the assertion here that there’s some issue on standing.
[¶ ] In usury cases, I think the law is pretty clear that you don’t have to pay the claim to
offer the defense. You can still raise usury as a defense without having paid.” The court
added: “But you can’t say that they don’t have the standing to bring the claim because I
think that the usury laws are clear that you can still bring the claim whether you paid or
not.”
        The trial court next addressed a motion in limine filed by Beth with regard to
Robert’s claim that he had unilaterally reduced the interest rate on the loan to 10% simple
interest, thereby precluding any injury to Beth. The court stated: “[Plaintiff seeks to]
prevent defendant from asserting that the unilateral modification takes the loan out of the
usury statutes, essentially, Mr. Hart, who in the case has indicated he reduced the interest
rate to 10 percent. And the Taylor vs. Budd[2] case is almost 90 years old, but it says
pretty clearly that changing the term[s] after the loan [was effectuated] did not waive
usury. So I think the law on that is clear. I’ve seen no other law to the contrary.” At that

2       Taylor v. Budd (1933) 217 Cal. 262.

                                              11.
point, Robert interjected: “Excuse me. I didn’t lower the interest rate to claim that it
wasn’t usury. I lowered the interest rate to prevent a lawsuit. If they thought that that
was usury, then I thought, well, I’ll just go to whatever they think is right because – so I
charged 10 percent just to save a lawsuit. But after I changed it to 10 percent, then they
came back and filed a complaint 30 days later anyway. But I did not change the interest
rate to claim that I wasn’t subject to usury.” The trial court responded: “Okay. Sounds
like there’s no real argument on that one. I’ll grant it.”
       The court granted Beth’s motion in limine precluding Robert from arguing that his
unilateral, retroactive modification of the interest rate on the note to a 10% per annum
rate, effectively nullified the injury (that is, usury) alleged by Beth.
       C.      Analysis
       Here, the terms of the loan, at its inception, were set forth in the promissory note.
The promissory note provided for interest at a compounded rate of 1.5% per month
(effectively 19.56% per annum). Thus, the promissory note revealed on its face that the
loan was usurious. Since Beth was subjected to usurious terms and challenged those
terms in the instant lawsuit, Robert’s contention that Beth suffered no injury and did not
allege any injury in her complaint has no merit. Beth’s standing to sue did not hinge on
whether she had actually paid usurious interest on the loan.
       Furthermore, since the loan was usurious, Robert was not entitled to recover any
interest on the loan. The fact that Robert unilaterally changed the interest rate to 10
percent simple interest was of no moment. Beth correctly notes in her brief, “defendants’
unilateral retroactive modification of the interest rate … did not cure the unlawful nature
of the transaction.” Beth points out that, while “there is no question that a usurious
transaction can be settled and compromised by the parties without litigation,” “an
enforceable compromise requires consideration to the borrower.” Beth posits that “[a]
mere waiver of the excess interest, even if agreed to, is not consideration to the borrower
since it is illegal in any event.”

                                              12.
       Beth’s argument is supported by Taylor v. Budd, supra, 217 Cal. 262, which
clarifies that a compromise in which the lender merely relinquishes all claims for illegal
interest, is “totally lacking in consideration.” (Id. at p. 266.) We conclude that Robert’s
unilateral, retroactive modification of the interest rate applicable to the loan, to a rate of
10 percent per annum simple interest, was invalid and did not serve to roll back the
usurious terms that took effect at the inception of the loan. Accordingly, Beth had
standing to challenge the usurious terms of the loan, notwithstanding Robert’s unilateral
modification.
II.    Robert’s Theory of Unclean Hands Has No Merit
       Robert argues that Beth acted unethically in tendering checks as payment for the
loan at issue because her plan all along was to tender the checks and then sue for
recovery of usurious interest and damages under the usury laws. Robert contends that
“Respondent’s unethical conduct of attempting to lure the Appellant into a usurious
interest lawsuit” means she had unclean hands and she should therefore be held to pay
interest on the loan at issue. Robert does not cite any applicable and relevant authority in
support of his claims.
       Robert appears to be arguing that Beth is somehow estopped from claiming she
does not owe interest pursuant to the agreed upon loan terms or Robert’s unilateral
modification thereof. However, estoppel is not triggered when a borrower makes
payments with knowledge of the usurious nature of the underlying transaction. Rather,
when a borrower voluntarily pays the usurious interest without objection, it is presumed
the payment was an involuntary act. Our Supreme Court has explained: “The theory of
[the usury] law is that society benefits by the prohibition of loans at excessive interest
rates, even though both parties are willing to negotiate them. Accordingly, ‘voluntary’
payments of interest do not waive the rights of the payors. ‘Payments of usury are not
considered voluntary but are deemed to be made under restraint.’ ” (Stock v. Meek
(1950) 35 Cal.2d 809, 817 [“ ‘The parties to a usurious transaction are not to be regarded

                                              13.
as in pari delicto.’ ”].) Since the payments are viewed as being made under compulsion,
the payor is not estopped from challenging the underlying usurious transaction in an
action against the lender.
       Robert also claims that Beth engaged in “abuse of process” by filing a lawsuit
seeking the return of usurious interest payments made via checks, despite the fact that
Robert had not cashed those checks. Robert had raised this “abuse of process” issue in
the trial court as well. Specifically, the trial court had granted, at the motions in limine
hearing in this matter, a motion in limine brought by Beth “to prevent [Robert] from
arguing abuse of process.” The trial court explained: “Abuse of process is the use of the
legal system to accomplish a purpose for [which] it was not designed. Here I think we
have usury statutes, and there’s a contemplation in that statute that they can be enforced
through the legal process. So I think filing this suit is well within the statutory scheme in
civil litigation.” The court concluded: “I’m going to grant that motion. I don’t believe
abuse of process is something that can be correctly argued in this suit.” At that point
Robert asked: “Are you saying I can’t argue my counterclaim of abuse of process in this
trial?” The court responded: “That’s exactly what I’m saying, sir.” Robert challenges
the court’s ruling.
       Robert has not made reasoned arguments or provided citations to applicable
authority in support of his claim that Beth had engaged in “abuse of process.” We
therefore need not further address this claim. (See Cahill v. San Diego Gas & Electric
Co. (2011) 194 Cal.App.4th 939, 956 [“ ‘Appellate briefs must provide argument and
legal authority for the positions taken. “When an appellant fails to raise a point, or
asserts it but fails to support it with reasoned argument and citations to authority, we treat
the point as waived.” ’ ”].)
III.   Usury Prohibitions of the California Constitution Apply to Private Loans
       Roberts argues the loan transaction at issue was not subject to the usury
prohibition in article 15 of the California Constitution, because the loan agreement was

                                             14.
made between private individuals for private purposes. More specifically, Robert argues:
“The CA Constitution is not a document that dictates rules for private people to live by.
The CA Constitution and all state Constitutions were written to organize state
governments. There was nowhere in the loan documents that claimed ‘the parties agreed
to be subject to the laws of the State of California’ or any other hidden terms. The
contracts are the law of the case.” Robert does not provide any authority for his broad
claims. We reject Robert’s contention that the usury prohibition of the California
Constitution did not apply here because the loan was between private people for private
purposes.
       The trial court granted an in limine motion brought by Beth to preclude defendants
from asserting they were not bound by the California Constitution. The court explained:
“[T]he California Constitution is] one of the foundational laws of our state, and I have not
seen any legal authority that indicates that it only applies to businesses or you can
somehow opt in or out of that.” We detect no error in the trial court’s ruling.
       The usury prohibitions of the California Constitution are encompassed in article
15, section 1. Article 15, section 1, by its terms, applies to “any loan” that is transacted
in the state. (See Cal. Const. art. 15, § 1(1), (2).) Furthermore, the California
Constitution applies to individuals and not just to government entities. For example, the
right to privacy enshrined in article 1, section 1 of the California Constitution “protects
against invasions by private citizens as well as by the state.” (Chantiles v. Lake Forest II
Master Homeowners Assn. (1995) 37 Cal.App.4th 914, 923.) Similarly, under the
California Constitution, it is settled that threats of private citizens alone may suffice to
render a confession involuntary. (See People v. Brown (1981) 119 Cal.App.3d 116,
129; see also People v. Haydel (1974) 12 Cal.3d 190, 197, 199-202 [refusal by private
security guard to allow suspect to see wife rendered statement involuntary].) In addition,
some jurists contemplate that “California’s free speech clause, which is broader than the
federal clause, has no state action limitation but rather ‘ “runs against the world,

                                              15.
including private parties as well as governmental actors.” ’ ” (Albertson’s, Inc. v. Young
(2003) 107 Cal.App.4th 106, 129-130, conc. opn. of Sims, J.) Finally, the body of
caselaw regarding the usury prohibitions of the California Constitution leaves no doubt
that article 15, section 1 applies to private individuals as well as other entities.
IV.    Contracts Clause of the United States Constitution Does Not Apply Here
       Robert argues he should have been permitted at trial to rely on article 1, section
10, clause 1 of the United States Constitution because this provision “was written to
protect the rights of the people against government interference in their right to contract
freely.” We reject his contention.
       The trial court granted a motion in limine brought by Beth to preclude Robert from
arguing that article 1, section 10 of the federal Constitution prevented enforcement of
state laws on usury. The trial court stated: “Specifically, I think Article I Section 10 of
the federal Constitution does not prevent enforcement of state laws on usury. I think
Article I Section 10 reserves federal powers, including impairing the right to contract, but
also talks about things like maintaining our armies and minting money. [¶ ] I know of no
legal authorities and I’ve seen none presented here that indicates that the federal
Constitution prevents enforcement of the usury [laws].” We agree with the trial court.
       The United States Supreme Court has explained: “It is elementary that the subject
of the maximum amount to be charged by persons or corporations subject to the
jurisdiction of a State for the use of money loaned within the jurisdiction of the State is
one within the police power of such State.” (Griffith v. Connecticut (1910) 218 U.S. 563,
569.) The high court further held: “[T]he contract clause of the Constitution of the
United States ‘does not give validity to contracts which are properly prohibited by [state
law].’ ” (Id. at p. 571) In other words, the federal Constitution’s prohibition against
impairing the obligation of contracts (U.S. Const. art 1, § 10) applies only to contracts
lawfully made and not to usurious contracts that violate state law.

                                              16.
V.     Promissory Fraud
       After presentation, at trial, of the defendants’ case as to their cross-claims, the trial
court granted Beth’s motion for nonsuit. Robert’s cross claim for promissory fraud was
extinguished upon the granting of the motion for nonsuit. Robert now challenges the trial
court’s grant of the motion for nonsuit. For her part, Beth points out: “Appellant makes
no citation to the record on this issue and has not presented a reporter’s transcript which
is necessary to find error in the Court’s granting of non-suit at the conclusion of
Appellant’s case. Appellant is unable to show grounds for reversal.” We agree. (See
Singh v. Lipworth (2014) 227 Cal.App.4th 813, 817 [“We consider all points asserted in
this appeal to be forfeited as unsupported by ‘adequate factual or legal analysis.’ ”].)
VI.    Alleged Misrepresentations by Beth’s Attorney at Trial
       Robert alleges that Beth’s attorney “lied to the Jury during closing argument on 6-
2-22 by dictating to the Jury his erroneous interpretation of CCP 2074 that payment
tendered meant the debt was extinguished.” Beth responds as follows: “Appellant makes
allegations of counsel making false statements to the jury. First, appellant has not offered
evidence in the form of a trial transcript to support his claim. Appellant did not request
the presence of a court reporter and there is no transcript for the court to make such a
finding even [if] it were a valid issue. Secondly, the statements of counsel to the jury are
argument, not evidence. Without a trial transcript Appellant is unable to show grounds
for reversal.” We agree.
VII.   Trial Court Properly Awarded Attorneys’ Fees to Beth
       Robert challenges the trial court’s award of attorneys’ fees to Beth. We affirm.
       The trial court’s order as to attorneys’ fees stated:

              “Plaintiff seeks a determination as prevailing party on the contract
       and the corresponding award of attorneys’ fees.

              “Civil Code section 1717 provides, in relevant part:

                                              17.
       “ ‘In any action on a contract, where the contract
       specifically provides that attorney’s fees and costs, which
       are incurred to enforce that contract, shall be awarded either
       to one of the parties or to the prevailing party, then the party
       who is determined to be the party prevailing on the contract,
       whether he or she is the party specified in the contract or not,
       shall be entitled to reasonable attorney’s fees in addition to
       other costs.’ (Civil Code § 1717(a), bold emphasis added.)

       “The underlying promissory note states:

       “ ‘If this note is not paid when due on March 8th 2021, the
       undersigned promises to pay in addition all costs associated
       with collection and reasonable attorney’s fees incurred on
       account of such collections, whether or not suit is filed
       hereon.’

        “Here, the jury found Defendants lent money to Plaintiff, the interest
rate exceeded 10%, that Defendants intended to enter the loan agreement at
the interest rate of more than 10%, that the loan was repayable. This meets
the elements of usury set out in Ghirado v. Antonioli (1994) 8 Cal.4th 791,
798:

       “ ‘(1) The transaction must be a loan or forbearance; (2) the
       interest to be paid must exceed the statutory maximum; (3)
       the loan and interest must be absolutely repayable by the
       borrower; and (4) the lender must have a willful intent to
       enter into a usurious transaction.’

      “Last, Defendant’s cross-complaint was dismissed via Plaintiff’s
motion for non-suit.

       “The judgment entered found the obligation of Plaintiff to
Defendants was usurious and that Plaintiff is entitled to a credit of $27,148
against the principal.

        “Civil Code section 1717, subdivision (b) provides that ‘the party
prevailing on the contract shall be the party who recovered a greater relief
in the action on the contract. The court may also determine that there is no
party prevailing on the contract for purposes of this section.’

        “In Hsu v. Abbara (1995) 9 Cal.4th 863, 876, the court held that ‘in
deciding whether there is a “party prevailing on the contract,” the trial court
is to compare the relief awarded on the contract claim or claims with the

                                      18.
       parties’ demands on those same claims and their litigation objectives as
       disclosed by the pleadings, trial briefs, opening statements, and similar
       sources. The prevailing party determination is to be made only upon final
       resolution of the contract claims and only by “a comparison of the extent to
       which each party ha[s] succeeded and failed to succeed in its contentions.” ’

              “Here, Plaintiff is the prevailing party pursuant to the jury’s findings
       and verdict in her favor. She is entitled to attorneys’ fees pursuant to the
       contract.”
We detect no error in the trial court’s decision to award attorneys’ fees.
VIII. Miscellaneous Arguments
       Robert makes additional, tangential claims, which are sprinkled throughout his
briefs. These claims are not supported by reasoned argument, citations to the record, and
citations to applicable legal authorities. Accordingly, we will not consider them.
(Department of Alcoholic Beverage Control v. Alcoholic Beverage Control Appeals Bd.
(2002) 100 Cal.App.4th 1066, 1078 [“Mere suggestions of error without supporting
argument or authority other than general abstract principles do not properly present
grounds for appellate review. The court is not required to make an independent,
unassisted study of the record in search of error. The point is treated as waived and we
pass it without further consideration.”].)
                                      DISPOSITION
       The judgment is affirmed. Beth Hart is awarded costs on appeal. The matter is
remanded for determination of Beth Hart’s attorney fees on appeal.

                                                                                  SMITH, J.
WE CONCUR:

HILL, P. J.

DE SANTOS, J.

                                             19.