Over the course of a decade, Wilcox lent Hardwick and his corporation large sums under notes which were extinguished and new notes signed for the same loans as the original due dates came and went.  Each note provided for usurious interest.  Wilcox was a non-exempt lender, and the notes charged 11 or 12 percent interest.  The trial court did not err in denying Wilcox’s statute of limitations defense.  It applied the excess interest (over the legal rate) which Hardwick had paid in earlier years as an offset against the last iteration of the notes evidencing the loans.  Since the offsets were a defense to Wilcox’s claims on the notes, they weren’t barred by the statute of limitations.  The trial court also awarded damages of $227,000 in excess interest that Hardwick had paid in the last two years before filing suit that exceeded the principal balance of the notes and so couldn’t be offset against them.  This was proper as the excess interest was paid within the statute of limitations period.  Also, a release executed in connection with a forbearance agreement was ineffective to release Hardwick’s usury claim because the release did not settle any existing dispute and it was contrary to public policy in attempting to exempt Wilcox from liability for his usury violations.

California Court of Appeal, First District, Division 4 (Ruvolo, P.J.); May 22, 2017; 2017 WL 2224334