CASHING LLC v. JEAN CHERY (2026)

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

After a jury-waived trial, the defendants, brothers Jean N. Chery and Jean Francois Chery, appeal from a judgment declaring that they owe the plaintiff, E-Z Cashing, LLC (E-Z Cashing), the outstanding balance on a note. The defendants argue that they were entitled to summary judgment because the mortgage originally provided for an unlawfully high default interest rate and thus was void, and that the trial judge made clear errors in her factual findings on their counterclaims. E-Z Cashing concedes that the amount of damages in the judgment is “an error” more than $393,000 in its favor, and should instead have been an amount testified to by E-Z Cashing's principal, Joel Weiser, based on a document that is not in the record. We cannot in the first instance determine the credibility of that evidence, and thus we are constrained to remand the case to the Superior Court for recalculation of damages. The judgment is otherwise affirmed.

Background. We set forth the facts as found by the trial judge, supplemented by our own review of the documentary evidence. In 2004, the defendants bought a forty-three unit rooming house in Brockton (property), subject to a mortgage from Bayview Financial Trading Group, L.P. (Bayview), that secured a note in the amount of $900,000 at an initial interest rate of 7.30 percent. The note provided that if the defendants defaulted on the loan, an interest rate of twenty-five percent or the maximum rate permitted by law, whichever was lower, would apply. The twenty-five percent default interest rate exceeded the twenty percent maximum permitted by G. L. c. 271, § 49.

The defendants fell behind on their loan payments because tenants were not paying rent. Beginning in 2018, the defendants retained counsel to help them restructure their debt, and Jean Francois filed for bankruptcy protection.

The defendants and a potential buyer signed a purchase and sale agreement to sell the property for $1.75 million. The closing was scheduled for December 9, 2019. Before the closing, the defendants had to repair the property and obtain certain permits. The sale never closed. The trial judge did not credit evidence presented by the defendants purporting to extend the closing date to July 15, 2020.²

In July 2020, E-Z Cashing bought the loan from Bayview. The defendants received a letter informing them of the sale of the loan, and that E-Z Cashing was asserting the right to seek a default judgment in the amount of the arrearage on the loan, which it asserted was then about $1.8 million, including default interest of twenty-five percent. As part of its purchase of the loan, E-Z Cashing obtained an assignment of rents and notified both the defendants and the property's tenants that rents should be paid to E-Z Cashing.

In October 2020, Jean also filed for bankruptcy protection. After Jean continued to collect rents from the property's tenants, a bankruptcy court judge found that Jean had made unauthorized use of cash collateral and appointed a bankruptcy trustee, who used the rent money to settle the defendants’ debts.

In December 2020, E-Z Cashing began foreclosure proceedings on the property. Meanwhile, the city of Brockton (city) was planning to build a public safety complex. By late 2020, it had identified several possible locations for the project, including the property. The city solicitor learned of the defendants’ unsuccessful attempt to sell the property and the impending foreclosure. On January 6, 2021, the city offered the defendants $1.6 million for the property on the condition that it be vacant of tenants. The defendants did not respond.

On February 23, 2021, the mortgage was foreclosed and the property sold at a public auction at which E-Z Cashing was the high bidder. The property still had some tenants and was in mediocre condition. After E-Z Cashing bought the property, Weiser told the city solicitor that he had no interest in selling the property to the city because of the requirement that the property be vacant of tenants.

In April 2021, E-Z Cashing brought this action against the defendants alleging claims including one seeking a declaratory judgment that the defendants owed it a deficiency balance of $1,406,750 on the note. The defendants brought counterclaims, principally arguing that the note was void because the mortgage provided for an unlawfully high default interest rate.

On November 8, 2021, the city took the property by eminent domain. It valued the property at $2,447,080.

The defendants amended their counterclaims to allege that E-Z Cashing foreclosed on the property “with full knowledge of the pending eminent domain taking,” and in doing so violated its duty of good faith to the defendants. As amended, the counterclaims included: violation of G. L. c. 271, § 49, by charging an unlawfully high interest rate, rendering the note void; breach of good faith and reasonable diligence; unjust enrichment; violation of G. L. c. 93A; and violation of G. L. c. 183, § 54D, for not providing timely and accurate information as to loan payoff amounts.

The parties filed cross motions for summary judgment. On E-Z Cashing's contract claim, a Superior Court judge (motion judge) allowed partial summary judgment in favor of E-Z Cashing for the defendants’ failure to make monthly mortgage payments, but denied summary judgment on whether the defendants had collected rents and withheld them from E-Z Cashing. On the defendants’ G. L. c. 271, § 49 counterclaim, the motion judge reformed the note to impose a lawful default interest rate of twenty percent, and denied summary judgment on most of the remaining claims.³

The remaining claims were tried before a different judge (trial judge), who ordered judgment for E-Z Cashing on its claim that the defendants owed it the deficiency judgment. Judgment entered for E-Z Cashing for $1,406,750, the amount it had sought in its complaint and reiterated in its proposed findings of fact filed just before trial. The trial judge also ordered judgment for E-Z Cashing on the defendants’ counterclaims for a declaratory judgment that E-Z Cashing lacked authority to collect its judgment; for unjust enrichment; and for violations of G. L. c. 183, § 54D, and G. L. c. 93A.⁴ The defendants appeal. (RA 5/509-512)

Discussion. 1. Denial of summary judgment on defendants’ G. L. c. 271, § 49 counterclaim. The defendants argue that the motion judge should have granted summary judgment on their counterclaim under the anti-usury statute, G. L. c. 271, § 49, because the twenty-five percent default interest rate in the mortgage violated that statute, rendering the note void.

A violation of the anti-usury statute does not “mandate a voiding of the loan.” Beach Assocs., Inc. v. Fauser, 9 Mass. App. Ct. 386, 393 (1980). Rather, the statute gives a judge discretion “based upon all the facts, circumstances, and conditions surrounding the loan, to void it, to rescind it, to refund, to credit any excessive interest paid, to reform the contract, or to provide any other relief consistent with equitable principles.” Id. at 394. A judge determines the appropriate remedy by balancing factors including “the importance of the public policy against usury, whether a refusal to enforce the term will further that policy, the gravity of the misconduct involved, the materiality of the provision to the rest of the contract, and the impact of the remedy on the parties’ rights and duties.” Begelfer v. Najarian, 381 Mass. 177, 189 (1980). Considering that the note included alternative language setting the default interest rate at the maximum permitted by law, and that voiding the note would produce a windfall for the defendants, the motion judge reformed the note to provide for a lawful interest rate of twenty percent. Because the motion judge considered the relevant factors and provided a remedy that was within the range of reasonable alternatives, we discern no abuse of discretion. See L.L. v. Commonwealth, 470 Mass. 169, 185 n.27 (2014).

2. Trial.⁵ a. Standard of review. “Where a judge makes findings of fact in a bench trial, we review them for clear error.” H1 Lincoln, Inc. v. South Washington St., LLC, 489 Mass. 1, 13 (2022). “A trial judge's finding is clearly erroneous only when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed” (quotation and citations omitted). Id. See also Pehoviak v. Deutsche Bank Nat'l Trust Co., 85 Mass. App. Ct. 56, 64 (2014). “The trial judge's legal conclusions, by contrast, we review de novo.” H1 Lincoln, Inc., supra. As to a G. L. c. 93A claim, whether conduct is unfair or deceptive is a question of fact, but whether the unfair or deceptive conduct rises to the level of a G. L. c. 93A violation is a question of law. See id. at 13-14.

b. Findings of fact. Most of the defendants’ arguments seeking to overturn the judgment rest on their contentions that various findings of fact by the trial judge were clearly erroneous.

The trial judge did not credit the testimony of Jean and the defendants’ counsel that the defendants did not know that in the event of default, the interest rate on the note would increase. The default rate was plainly stated in the mortgage document and in various notices to the defendants from both Bayview and E-Z Cashing.

The defendants argue that the judge erred by not finding that E-Z Cashing hindered their sale of the property to the prospective buyer when it provided them in July and August 2020 with payoff amounts that included default interest computed at the unlawful twenty-five percent rate. The trial judge found, however, that the defendants were not prejudiced by any “technical violation” of the payoff statute, G. L. c. 183, § 54D, because the prospective buyer's failure to close on the purchase of the property had “nothing to do” with the payoff amounts. The defendants further argue that the trial judge erred in finding that the sale could not have closed because the defendants did not obtain an occupancy permit, pointing to the testimony of their bankruptcy counsel that they did obtain a rooming license in mid-August 2020. As mentioned, supra at n.2 and accompanying text, the trial judge's determination that the sale could not have closed rested not on the lack of an occupancy permit, but on her discrediting the evidence presented by the defendants purporting to extend the closing date and her finding that there was no evidence that the prospective buyer ever obtained financing or a lender's approval to close.

The defendants argue that the trial judge committed clear error by finding that they had failed to meet their burden to prove that E-Z Cashing did not “conduct the foreclosure in good faith and with reasonable diligence.” Based on evidence including the testimony of Weiser, the auctioneer, and E-Z Cashing's foreclosure attorney, the trial judge found that “Weiser and his attorneys complied with all of the statutory requirements for a foreclosure”; she did not credit Jean's testimony that he did not receive notice of the foreclosure. The defendants argue that the trial judge clearly erred in finding that, at the time of the foreclosure in February 2021, Weiser did not know that the city intended to develop the property. We disagree. The trial judge credited the testimony of Weiser and the city solicitor that, soon after E-Z Cashing bought the property, Weiser told the city solicitor that he would not sell the property to the city because of the requirement that it be vacant of tenants, and Weiser had no knowledge that nine months after the purchase the city would take the property by eminent domain.

We discern no “clear error” in the trial judge's findings based on the evidence before her at trial. H1 Lincoln, Inc., 489 Mass. at 13. Moreover, the findings that the defendants claim the judge failed to make had no effect on her decision.

c. G. L. c. 93A counterclaim. The defendants argue that by demanding that they pay default interest at the unlawful twenty-five percent rate, E-Z Cashing committed unfair or deceptive business practices in violation of G. L. c. 93A. The trial judge found that there was no evidence at trial that, when E-Z Cashing purchased the note, Weiser knew that the twenty-five percent default interest rate was usurious. In making that finding, the judge credited Weiser's testimony that he believed E-Z Cashing was permitted to charge that rate because it was set forth in the documents pertaining to the loan that E-Z Cashing bought from Bayview. As a result, the judge concluded, Weiser's conduct did not amount to a G. L. c. 93A violation. To the extent that that was a finding of fact, we discern no abuse of discretion, and to the extent that it was a conclusion of law, we agree. See H1 Lincoln, Inc., 489 Mass. at 14.

3. Error in computing amount of judgment. Both parties assert that the amount of the judgment for E-Z Cashing, $1,406,750, was error because it included default interest computed at the unlawful twenty-five percent rate. That was the amount that E-Z Cashing sought in its complaint. Even after the motion judge had reformed the note to impose a lawful interest rate of twenty percent, E-Z Cashing reiterated in its proposed findings of fact filed just before trial that the amount of its damages was $1,406,750.

In contrast, at trial, Weiser testified that the correct amount, computed at twenty percent default interest, should be $1,013,741.06. The transcript reflects that Weiser referred to a document containing his calculations of that amount. E-Z Cashing did not attempt to introduce that document in evidence or mark it for identification. Counsel for both parties referred to that document as a “chalk,” and the transcript seems to indicate that the judge reviewed it. Cf. Metropolitan Life Ins. Co. v. Cotter, 464 Mass. 623, 627 n.6 (2013) (at jury-waived trial, judge made findings based on testimony about chalk that was stricken from evidence).

In her comprehensive and detailed memorandum setting forth her findings of fact and conclusions of law, the trial judge plainly stated that she intended for the judgment to be calculated with default interest at the twenty percent rate imposed by the motion judge. Even so, the parties agree that the judgment erroneously included default interest calculated at the unlawful twenty-five percent rate.

After trial, neither party moved to correct the judgment pursuant to Mass. R. Civ. P. 60, 365 Mass. 828 (1974), either for a clerical mistake, rule 60 (a), or for mistake, inadvertence, or “any other reason justifying relief,” rule 60 (b). “Clerical mistakes in judgments, orders or other parts of the record may be corrected by the court at any time of its own initiative or on the motion of any party.” Mass. R. Civ. P. 60 (a). See Carey's, Inc. v. Carey, 25 Mass. App. Ct. 290, 301 (1988). See also Chapman v. University of Mass. Med. Ctr., 423 Mass. 584, 589 (1996) (while appeal pending, with leave of appellate court, judge who presided at jury-waived trial allowed rule 60 (a) motion, clarifying that she did not intend to award postjudgment interest). “[R]ule 60 (a) has been identified as an appropriate avenue of relief to correct errors in the calculation of interest.” M.B. Claff v. Massachusetts Bay Transp. Auth., 441 Mass. 596, 602 (2004). Had either party filed a rule 60 (a) motion, we “would grant deference to the judge's determination of ․ her own contemporaneous intent in framing the judgment.” Gagnon v. Fontaine, 36 Mass. App. Ct. 393, 400 n.7 (1994). See Roberts v. Worcester Redevelopment Auth., 53 Mass. App. Ct. 454, 458-459 (2001).

In its brief and at oral argument, E-Z Cashing asserted that the judgment should have been in the amount of $1,013,741.06, as Weiser testified, thereby conceding that the judgment is erroneously $393,008.94 in its favor. The trial judge's computation of the judgment, including default interest, depended on her assessment of the credibility of Weiser's testimony about his calculations as shown in the chalk. We cannot determine the credibility of a witness, nor that of the chalk that is not before us. Accordingly, we must remand for the trial judge to recalculate the amount of the judgment.⁶

Conclusion. We vacate so much of the judgment as awarded damages and remand for the limited purpose of recalculating damages consistent with this memorandum and order. The judgment is otherwise affirmed.

So ordered.

FOOTNOTES

2.   That evidence included a memorandum dated June 15, 2020, with the prospective buyer's name handwritten on the signature line followed by the words, “by his attorney,” without an attorney's name. The judge also doubted the authenticity of Jean's signature on the document.

3.   On the defendants’ counterclaims for tortious interference with contract and for a declaratory judgment that the auctioneer lacked authority to conduct the auction, the motion judge allowed summary judgment for E-Z Cashing. On appeal, the defendants do not raise any issue with respect to those rulings by the motion judge, and so we do not consider them.

4.   On the portion of E-Z Cashing's contract claim alleging that the defendants had withheld rents and its claims for unjust enrichment and conversion, the trial judge ordered judgment for the defendants. E-Z Cashing did not appeal, and thus those claims are not before us.

5.   For the first time on appeal, the defendants argue that E-Z Cashing waived the right to claim any default interest. The defendants also contend, for the first time in this litigation, that under G. L. c. 79, § 33, they should be entitled to a portion of the eminent domain proceeds; the defendants brought a G. L. c. 79 claim in a separate lawsuit against E-Z Cashing and the city, which was dismissed after that case settled. We do not consider either of those issues that the defendants raised in this case for the first time on appeal. See Halstrom v. Dube, 481 Mass. 480, 483 n.8 (2019); Carey v. New England Organ Bank, 446 Mass. 270, 285 (2006).

6.   We take no position on whether, in recalculating the amount of the judgment, the judge is bound by the amount to which Weiser testified at trial.