Appeal from the 212th District Court Galveston County, Texas
Trial Court Case No. 16-CV-0645
Russell Lloyd Justice
creditor made numerous cash loans to an obligor for the
obligor's business. The obligor failed to repay many of
the loans, and the creditor sued. After a bench trial, the
trial court found the obligor liable in contract and the
creditor liable for usury. The court awarded the obligor an
offset equal to the usury damages he was owed on the four
loans that he repaid but refused to award any usury damages
on the 10 loans that he failed to repay. In part because of
this, the obligor's contract liability exceeded the
creditor's usury liability. The parties agreed to a
reduced judgment of $1, 094, 047.04 in the creditor's
favor, but the court noted that the obligor did not waive his
right to appeal.
obligor appeals the trial court's refusal to award him
usury damages on the 10 loans that he failed to repay. He
also appeals the court's refusal to award him
attorneys' fees under the usury statutes. We reverse and
Leteff met Jimmy Roberts through a mutual acquaintance.
Leteff told the acquaintance that he was looking for
financing for his business-providing manpower and equipment
rentals to the oil-and-gas industry. The acquaintance called
Roberts, who provided financing for the acquaintance's
and Roberts, with Roberts's attorney present, met at the
dealership to discuss a deal. Leteff proposed, and the
parties reduced to writing, a transaction that specified that
Roberts would "loan" Leteff $40, 000 and that
Leteff would repay in 45 days both the $40, 000 and $20, 000
as an "interest amount." Leteff and Roberts signed
the agreement. The acquaintance looked on as Leteff and
Roberts "did the transaction" at the
and Roberts entered into more similarly structured loans,
some reduced to writing and others not. In all, Leteff and
Roberts entered into 17 loans, each with a stated principal
amount and an obligation that Leteff repay the principal.
Fourteen of the loans called for a stated interest amount;
the other three did not call for any interest. On at least
one occasion, Leteff met Roberts and the acquaintance at
Roberts's house for a loan of over half a million
dollars. That amount was counted out in cash, and Leteff took
the cash away in grocery bags.
14 loans that called for interest, Leteff repaid Roberts on
only four. Leteff never repaid Roberts on the remaining 10
sued Leteff for breach of contract. Leteff counterclaimed for
usury, under Texas Finance Code § 305.001, on the 14
loans that called for interest. The parties tried the case
without a jury, and the trial court entered a judgment in
Roberts's favor for $1, 094, 047.04.
trial court, on request, entered findings of fact and
conclusions of law. For each of the 17 loans, the trial court
listed the date; principal amount; interest amount, if any;
and period for repayment, if any was specified. The court
also noted which loans were memorialized in a written
agreement. For loans in which the parties failed to specify a
period for repayment, the court applied a default period of
trial court entered a conclusion of law that it "will
not award any interest in transactions to Leteff where Leteff
fully defaulted on the repayment of" principal and
interest. The court then applied Finance Code §
305.001(a-1), found that Roberts was liable for usury, and
awarded Leteff an offset against the money he had not repaid
for the usury damages on the four loans that he had repaid.
The trial court did not award any usury damages or offset for
the 10 loans not repaid.
trial court's findings of fact establish the following
about the 10 loans:
March 13, 2014 loan, by written agreement, provided for $100,
000 in principal, $40, 000 in interest, and repayment in 60
April 9, 2014 loan provided for $60, 000 in principal and
$40, 000 in interest.
May 9, 2014 loan, by written agreement, provided for $52, 750
in principal, $10, 000 in interest, and repayment in seven
July 10, 2014 loan, by written agreement, provided for $60,
000 in principal, $10, 000 in interest, and repayment in
July 18, 2014 loan, by written agreement, provided for $553,
720 in principal and $425, 000 in interest.
July 23, 2014 loan, by written agreement, provided for $285,
000 in principal, $90, 000 in ...