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Brooklawn Capital LLC v. Epox-Z Corp.
Citations: 123 N.E.3d 801; 94 Mass. App. Ct. 1121Docket: 18-P-99
Court: Massachusetts Appeals Court; February 11, 2019; Massachusetts; State Appellate Court
Brooklawn Capital LLC (Brooklawn) filed a lawsuit against Epox-Z Corporation (Epox) for breach of contract and quantum meruit, leading to a summary judgment in favor of Brooklawn amounting to approximately $160,228.40. Brooklawn, a foreign limited liability company, and Epox, a Massachusetts corporation, engaged in transactions involving the purchase and sale of receivables on the Receivables Exchange, LLC, governed by a master program agreement (MPA) that specified Louisiana law applied to all transactions. On March 19, 2013, Epox sold a receivable to Brooklawn, which later proved uncollectable. Despite making a partial payment, Epox failed to fulfill further financial obligations, prompting Brooklawn to seek direct payment and ultimately file the lawsuit. Brooklawn claimed the MPA's interest rate of approximately twenty-four percent applied, leading to an assertion that Epox owed $123,903.84. Conversely, Epox admitted liability but argued that the interest rate was usurious per Massachusetts law (G. L. c. 271, § 49), contending that the legitimate rate should be twenty percent, thus reducing its owed amount to $43,028. The motion judge ruled that Louisiana law was appropriate for the case, determining that Massachusetts's usury statute did not represent a fundamental public policy that would override the parties' chosen governing law. The judge affirmed Brooklawn's calculations, concluding that Epox was obligated to repurchase the receivable for the amount claimed. The court's review of the summary judgment was de novo, supporting the principle that parties can choose their governing law unless it conflicts with fundamental public policy. Epox's assertion that Massachusetts' criminal usury law is a 'fundamental public policy' that invalidates the MPA's choice of Louisiana law is unsupported by relevant authority. Epox has not established the applicability of these laws, which are designed to combat organized crime and loansharking, as neither is alleged in this case. The transaction in question is classified as commercial rather than a conventional loan, making the Louisiana usury statute, which limits interest to twelve percent for conventional loans, inapplicable. Consequently, the choice of law in the MPA is upheld, allowing for interest rates above twenty percent on commercial transactions, which supports Brooklawn's recovery due to Epox's default. Regarding appellate attorney's fees, Brooklawn is entitled to such fees under the MPA and the seller's agreement, given that Epox was a party to these agreements and Brooklawn was a third-party beneficiary. A petition for these fees may be filed within twenty days of the rescript issuance, with Epox given an opportunity to respond. The judgment of $123,903.84, which includes various fees and costs incurred until September 30, 2016, is affirmed. Section 13.2(B) of the MPA explicitly states that Epox is responsible for Brooklawn's reasonable attorneys' fees and court costs related to collection efforts, with the seller's agreement containing a similar clause.