COFIELD v. OUR (2019)

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

Following a jury-waived trial, a Superior Court judge found that a $50,000 loan given in exchange for a promise to pay $100,000 was in violation of the Massachusetts Usury Statute. See G. L. c. 271, § 49 (a) & (c).⁴ The judge further determined, however, that the plaintiffs did not repay the usurious loan, and entered judgment for the defendants. On appeal, the plaintiffs claim that the judge erred in finding that a $157,719 payment was given in exchange for site work at “The Residences at Pond Oaks” and not as repayment of either the $50,000 loan or $100,000 in debt reflected in two promissory notes signed by plaintiff James E. Cofield.⁵ We affirm.

1. Standard of review. We review a trial judge's findings of fact for clear error. See White v. Hartigan, 464 Mass. 400, 414 (2013). “Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.” Mass. R. Civ. P. 52 (a), as amended, 423 Mass. 1402 (1996). This standard awards great deference to the judge. In contrast, findings based on documentary evidence are reviewed de novo. See Commonwealth v. Tremblay, 480 Mass. 645, 654-655 (2018) (“an appellate court may independently review documentary evidence, and ․ lower court findings drawn from such evidence are not entitled to deference”). An appellant will not prevail if the judge's findings “are supported on any reasonable view of the evidence, including all rational inferences of which it was susceptible.” Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 510 (1997), quoting T.L. Edwards, Inc. v. Fields, 371 Mass. 895, 896 (1976).

2. Background. In October 2003, Cofield approached defendant Christopher W. Our, seeking a $50,000 loan in exchange for a promise to pay $100,000 within twelve months from the date of the loan. On October 16, 2003, Cofield executed a promissory note in the amount of $100,000 payable to Christopher W. Our, Robert Our, and John Our.⁶ The note required payment within one year in exchange for a promise to contract with the Ours' company, Robert B. Our Co., Inc. (Our Co.), for road, site, and utility construction on parcels of land to be developed by one of Cofield's companies, Boston Development Collaborative, Inc. (Boston Development).⁷ Cofield then signed another promissory note dated October 20, 2003, in the amount of $100,000 and with a one-year term. On that same date, a check in the amount of $50,000 drawn on the account of Shorey Manufacturing Co., Inc. (Shorey),⁸ was made payable to Cofield Properties, Inc. (Cofield Properties).

Neither Cofield nor his companies made any payments toward the amount reflected in the promissory notes within a year. Sometime after October 21, 2004, Cofield offered to pay $5,000 per month if the Ours did not take certain collateral securing the loan.⁸

In April 2005, Our Co. issued a “Contractor's Application for Payment” to another of Cofield's companies, Unique Properties, LLC (Unique).¹⁰ Unique then sent a “Borrower's Request for Loan Payments” to an Orleans bank, requesting a release from its construction loan of $157,719 for “road construction” per the requisition from Our Co.¹¹ The request certified that the “funds advanced pursuant to this request will be used exclusively by the borrower, for the above referenced [‘road construction’] project, and for the exclusive purposes as set out in the loan documents.”

By check dated May 3, 2005, drawn on Cofield Properties's account, Cofield paid Our Co. $157,719. The “memo” line on the check included the text: “Requisition 1, Pond Oaks.”¹² On February 9, 2011, an attorney for Cofield, Cofield Properties, and Boston Development sent demand letters to Christopher Our and John Our stating that the amount due from Cofield for the earlier $50,000 loan had been “increased to $150,000” and “constituted a usurious consideration.” The letters demanded that the defendants refund the $100,000 in interest Cofield had allegedly paid pursuant to the usurious loan.

3. Discussion. We conclude that the trial judge's findings were not clearly erroneous and, contrary to plaintiffs' contention, were supported by a “reasonable view of the evidence” in the record. Demoulas, 424 Mass. at 510.

The central focus of this litigation involved discerning the purpose of Cofield Properties's check in the amount of $157,719 made payable to Our Co.¹³ Cofield alleged at trial that the payment was for $150,000 he owed the Ours pursuant to the usurious loan and the offers he made post factum. Conversely, the Ours contended that this money was for contractual work at “The Residences at Pond Oaks.” Thus, it was for the judge to determine, based on two competing narratives, the purpose of the $157,719 payment.

Of importance in resolving this issue, which is essentially one of credibility, we recognize that the judge is vested with the exclusive duty to determine the soundness of the testifying witnesses. See Johnston v. Johnston, 38 Mass. App. Ct. 531, 536 (1995) (“the credibility of a party or other witness who appeared at trial is quintessentially the domain of the trial judge”). Cofield testified that he offered to pay the Ours an additional $50,000 in interest in lieu of his previous offer of $5,000 monthly, bringing the total amount owed to the Ours to $150,000. He explained that because Christopher Our wanted the $150,000 “up front,” it had to be included in the commercial loan for Cofield's project. Cofield also testified that the extra $7,719 was tacked on so it “wouldn't look fishy.” The judge did not, and was not required to, accept this version of events.

Instead, the judge credited John Our and Christopher Our's testimony that they had never received monies in payment of either of the two promissory notes. Although they agreed to the $5,000 monthly payment, Christopher Our testified that Cofield never promised to pay a flat $50,000 in interest above the $100,000 promised in the notes. The judge permissibly chose to believe the Ours' testimony rather than that provided by Cofield.¹⁴

The documentary evidence also supports the judge's findings and is inconsistent with Cofield's narrative. The certification to Cofield's lender assured the bank that the funds requested would be used “exclusively ․ for the above referenced [‘road construction’] project, and for the exclusive purposes as set out in the loan documents.” Furthermore, the memo line on Cofield's check for $157,719 to Our Co. contained the notation “Requisition 1, Pond Oaks,” and did not indicate repayment of any loan, which also supports the Ours' position. Accordingly, because the record sufficiently supports the judge's findings, Cofield has failed to establish any clear error.¹⁵

Judgment affirmed.

FOOTNOTES

4.   Section 49 (a) of c. 271 provides, in pertinent part, “[w]hoever in exchange for either a loan of money or other property knowingly contracts for, charges, takes or receives, directly or indirectly, interest and expenses the aggregate of which exceeds an amount greater than twenty per centum per annum upon the sum loaned ․ shall be guilty of criminal usury.” Section § 49 (c) of the same statute states, “Any loan at a rate of interest proscribed under the provisions of [§ 49 (a)] may be declared void by the ․ superior court in equity upon petition by the person to whom the loan was made.”

5.   As discussed infra, the judge found that Cofield (1) executed a promissory note dated October 16, 2003, in the amount of $100,000 as president of Cofield Properties, Inc.; (2) executed a guaranty of that same note as president of Boston Development Collaborative, Inc.; and (3) executed, in his own name, a second promissory note dated October 20, 2003, in the amount of $100,000.

5.   Christopher W. Our and John D. Our are brothers; Robert B. Our, now deceased, was their father.

7.   Cofield executed the note as president of Cofield Properties, Inc., and executed a guaranty of the note as president of Boston Development.

8.   Defendant John D. Our was, at the relevant time, president of Shorey.

9.   The promissory note dated October 16, 2003, referred to collateral in the form of an assignment of two real estate purchase and sale agreements.

10.   A document in the record appendix dated April 8, 2005, shows that “Unique Properties, Inc.” accepted a bid by Our Co. for site work at “The Residences at Pond Oaks.” A $150,000 deposit was required as part of the payment terms.

11.   Cofield was, at the relevant time, manager of Unique.

12.   The judge noted that at no time prior to the issuance of the $157,719 check to Our Co. on May 3, 2005, did the defendants notify the Attorney General of the terms of the loan to Cofield in accordance with G. L. c. 271, § 49 (d).

13.   In their cross appeal, the defendants claim that another judge erred as a matter of law in denying their pretrial motion to dismiss based on a statute of limitations defense. Given our resolution of this appeal, we need not reach this issue.

14.   Additionally, the timing of the site work commencing after the $157,719 payment supported the Ours' representation that the payment constituted a deposit.

15.   The defendants' request for attorney's fees is denied. “Unpersuasive arguments do not necessarily render an appeal frivolous. ․ The determination whether an appeal is frivolous is left to the sound discretion of the appellate court.” Avery v. Steele, 414 Mass. 450, 455 (1993).