Sunstate Equipment Co. v. Eagle Environmental & Construction CA1/3

Filed 12/15/23 Sunstate Equipment Co. v. Eagle Environmental & Construction CA1/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

SUNSTATE EQUIPMENT CO., LLC, Plaintiff and Appellant, A167708

v. (City & County of San Francisco EAGLE ENVIRONMENTAL & Super. Ct. No. CGC-22-598228) CONSTRUCTION, Defendant and Respondent.

Plaintiff Sunstate Equipment Co., LLC (Sunstate) obtained a default judgment against defendant Eagle Environmental & Construction, a corporation, dba Eagle Environmental Construction (Eagle) after Eagle did not make timely payments for construction equipment it had rented from Sunstate. The parties had agreed to a contractual interest rate of 1.5 percent a month if payments were late. Concluding this rate was excessive and subject to the law against usury, the trial court instead awarded interest of 7 percent per year. We agree with Sunstate that this ruling was error, and we accordingly reverse.1

1 Eagle has not filed a respondent’s brief.

1

FACTUAL AND PROCEDURAL BACKGROUND It appears that Sunstate is in the business of renting construction equipment. A written account agreement between Sunstate and Eagle provided that Eagle would make payments within 30 days of issuance of an invoice for purchase or rental of equipment, and that payments not made within that period would be assessed a service charge at a rate of 1.5 percent per month, or 18 percent a year. Over the course of two months in 2020, Eagle incurred charges of $106,944.99 for equipment rental, but it did not make the required payments. Sunstate brought this action in February 2022 alleging four causes of action based on Eagle’s alleged failure to pay for the equipment rental. It requested interest at the contractual rate of 18 percent a year. Eagle did not answer the complaint, and Sunstate requested entry of default. A default prove-up hearing took place on March 1, 2023. Eagle did not appear at the hearing. The trial court found defendant had failed to make payments of $106,944.99. However, it concluded the contractual interest rate was excessive and unconscionable and declined to award it. Instead, it awarded interest at a rate of 7 percent a year “based on the California Constitution usury rules,” for total interest of $21,412.44. Sunstate appealed the resulting judgment. DISCUSSION Sunstate contends the trial court erred in concluding the interest rate specified in the contract was subject to the usury laws and that it was excessive and unconscionable. The facts before us are undisputed, and we review these contentions independently. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799 (Ghirardo).)