Commerce Park Realty, LLC v. HR2-A Corp. as General Partner of HR2-A Limited Partnership

Syllabus

Certain defendants in this complex and protracted litigation appealed from the grant of partial summary judgment in favor of the plaintiffs that primarily determined that a series of loans made by those defendants was usurious and null and void. On appeal, the defendants alleged that the trial justice erred (1) in finding that certain loans were usurious (2) in finding that the defendants charged usurious interest rates on those loans prior to their execution (3) in finding that a release and waiver of usury claims was ineffective (4) in finding that certain loans were governed by Rhode Island law, notwithstanding choice-of-law provisions dictating that Massachusetts law governed and (5) by failing to rule that the loans that the trial justice deemed usurious remained due and payable to the defendants because they were originally made prior to the accrual of any usurious interest rates. After thoroughly reviewing the record, the Supreme Court first held that the trial justice did not err in finding that certain loans were usurious because the lenders did not meet their burden of proving that the borrowers obtained pro forma methods analyses, in accordance with G.L. 1956 § 6-26-2(e), demonstrating that the loans were capable of being repaid. Next, the Court held that the trial justice did not err in finding that the defendants charged usurious interest rates prior to the execution of those loans. The Court held that the trial justice did not err in finding that a release and waiver of usury claims was ineffective, because the release and waiver was against public policy. The Court also held that the trial justice did not err in finding that Rhode Island law governed certain loans that contained choice-of-law provisions in favor of Massachusetts, because Rhode Island had a materially greater interest in the legality of the loans than did Massachusetts and because application of Massachusetts law would be contrary to a fundamental policy of Rhode Island. Finally, the C