Threlkeld v. Urech
329 S.W.3d 84
Tex. App.2011Background
- Threlkeld and Urech executed a $200,000 promissory note on Oct 7, 2002 with 100% annual interest and a lump-sum due 365 days after receipt of investment.
- Threlkeld defaulted; Urech sought recovery of principal and interest.
- On Dec 17, 2003, Urech sent a correction letter under Tex. Fin. Code § 305.103 reducing interest to the lawful maximum (18% or less) and correcting the usury violation.
- Threlkeld disputed the correction as untimely and argued the lawful rate was 10% not 18%.
- Urech filed suit on Oct 5, 2007 to recover amounts claimed due; Threlkeld counterclaimed for usury.
- The trial court granted summary judgment for Urech, awarding principal, interest, and fees; Threlkeld appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When did Urech discover the usury violation? | Threlkeld: Urech knew from inception; correction is untimely | Urech did not know until consulting counsel; correction timely | Correction timely; no genuine fact issue on discovery timing |
| May an 18% rate be applied to cure usury under §305.103? | Threlkeld: 18% invalid; correction improper | Urech validly corrected to the 18% minimum ceiling under §303.009 | 18% rate proper under §303.009; correction valid |
| Whether §302.001(b) cap (10%) governs correction vs. 18% minimum ceiling | Threlkeld: 10% cap governs usury correction | Texas law allows 18% minimum ceiling; §302.001(b) does not limit correction to 10% | 18% ceiling applicable; §305.103 correction valid and enforceable |
| Did the correction letter require specific contract language? | Threlkeld: language needed to support 18% | No language condition required; correction allowed by statute | No contractual language necessary to support correction; correction valid |
Key Cases Cited
- All Seasons Window and Door Mfg., Inc. v. Red Dot Corp., 181 S.W.3d 490 (Tex. App.-Texarkana 2005) (18% minimum ceiling can be applied when contract lacks specific rate language)
- Pentico v. Mad-Wayler, Inc., 964 S.W.2d 708 (Tex. App.-Corpus Christi 1998) (usury penalties and correction context)
- Bair Chase Prop. Co., LLC v. S & K Dev. Co., Inc., 260 S.W.3d 133 (Tex. App.-Austin 2008) (usury correction guidance)
- U.S.T. v. Ryland Group, Inc. v. Hood, 924 S.W.2d 120 (Tex. 1996) (affidavits must be controvertible and specific to create fact issues)
- Kerlin v. Arias, 274 S.W.3d 666 (Tex. 2008) (mere subjective belief about facts insufficient)