Cox v. Estate of Steve Cooper
426 P.3d 1032
Alaska2018Background
- In 2008 the Coopers loaned Cox $325,000 secured by a deed of trust; the note originally carried 20% interest, later reduced to 8% for a period. Cox defaulted and foreclosure proceeded in 2015.
- Cox sued days before the foreclosure sale alleging the 20% rate was usurious under AS 45.45.010 and sought forfeiture of remaining interest.
- The superior court initially found for Cox, concluding AS 45.45.010 capped interest at 10.5% for loans over $25,000 and granted partial summary judgment to Cox on usury.
- The Coopers moved for reconsideration, submitting legislative history showing subsection (b) of AS 45.45.010 governs contract/loan commitments with express rates and exempts large loans; the court reconsidered and reversed.
- The superior court held the 20% rate was not usurious for loans over $25,000, granted summary judgment for the Coopers, and awarded the Coopers reasonable attorney’s fees under Alaska Civil Rule 82.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether AS 45.45.010 imposes a 10.5% cap on contract/loan commitments > $25,000 | Cox: Subsection (a)’s 10.5% cap applies to loans > $25,000 when (b) exempts such loans from its own limit | Coopers: Subsection (b) governs express-rate contracts; loans > $25,000 are exempt from (b)’s cap and may set any rate | Court: Subsection (b) governs express-rate contracts; loans > $25,000 are exempt from (b) and not capped by (a); 20% was not usurious |
| Whether the superior court abused discretion by considering legislative history on reconsideration | Cox: Court improperly considered new materials and changed its ruling | Coopers: Statutory history is legal material showing the court misapplied the statute | Court: No abuse of discretion; reconsideration under Civil Rule 77(k) was appropriate and limited to legal materials |
| Whether attorney’s fees incurred defending the lawsuit should be awarded under Rule 82 or as foreclosure costs | Cox: Fees fall under foreclosure statute and equate to deficiency/foreclosure costs, so Rule 82 should not apply | Coopers: Foreclosure costs and litigation fees are distinct; fees for defending suit are recoverable under Rule 82 as partial prevailing-party fees | Court: Award under Rule 82 was proper for fees incurred defending the lawsuit (foreclosure-related fees in sale bid are separate) |
| Whether Cox could recover double interest under AS 45.45.030 | Cox: Sought double recovery of usurious interest paid | Coopers: Argued statute inapplicable because loan not usurious | Court: Not reviewed on appeal here; superior court previously denied double-recovery because Cox had not paid all alleged usurious interest (Cox did not appeal) |
Key Cases Cited
- Crissey v. Alaska USA Fed. Credit Union, 811 P.2d 1057 (Alaska 1991) (federal preemption and observation that state usury statute historically applied only to loans ≤ $25,000)
- Riley v. Northern Commercial Co., 648 P.2d 961 (Alaska 1982) (interpretive guidance relied on in statutory context)
- Rockstad v. Erikson, 113 P.3d 1215 (Alaska 2005) (treating a > $25,000 transaction as a single loan and thus outside state usury reach)
- Bibi v. Elfrink, 408 P.3d 809 (Alaska 2017) (loan modifications that pushed principal over $25,000 ended applicability of usury cap from that point forward)
- Madden v. Alaska Mortgage Group, 54 P.3d 265 (Alaska 2002) (trustee/deed-of-trust foreclosure fees: litigation-related fees are recoverable under Rule 82 as partial prevailing-party fees; trustee is entitled to foreclosure-sale costs only for duties ordinarily required of trustee)