When Schink learned that JWA was up and running he approached the firm about more loans. Lee, Ward formed JWA, a mortgage lender and loan processing company. In August 2000, with the help of attorney David S. Ward was not retired long before he decided to get back into the lending business. was merged out of existence in 1997 when Ward retired and moved to Ohio. At the time, Ward s firm was Jim Ward & Associates, Inc. Schink met Ward in the early 1990s, when Ward s firm provided Schink with one or two construction loans. Ward is a businessman who was a licensed real estate broker at all times pertinent here. Jonathan Schink is the managing member of both companies. FACTUAL AND PROCEDURAL BACKGROUND Creative and Arden were formed to pursue two separate real property developments known respectively as the Buckmeadow and Perry projects. As to plaintiffs appeal, we conclude that Investors are not holders in due course. With regard to JWA s appeal, we conclude that the evidence is sufficient to support the trial court s ruling that JWA committed usury but the evidence is insufficient to prove fraud. JWA and plaintiffs have filed cross appeals. The court found Investors were not liable for usury because they were holders in due course of the loan instruments. The trial court found JWA liable for usury and fraud. As to the usury and breach of contract causes of action, plaintiffs also named as defendants 54 individual investors (Investors) to whom JWA had assigned fractional interests in the notes. Upon discovering the deficiency, plaintiffs sued JWA for usury, breach of contract, and fraud. Code, § 1916.1), as JWA held itself out to be. XV, § 1.) The interest charges would have been lawful if the loans had been made or arranged by a licensed real estate broker (Civ. Each of the notes called for interest payments in excess of the maximum permitted by the California Constitution. The loans were evidenced by four promissory notes secured by deeds of trust on the real property. Plaintiffs Creative Ventures, LLC (Creative) and Arden 2002, LLC (Arden) borrowed nearly $3 million from defendant Jim Ward & Associates (JWA), a California Corporation to finance two real property development projects. JIM WARD & ASSOCIATES, a California Corporation, Defendant and Appellant MAHMUD ASSAR et al., Defendants and Respondents. Filed 5/31/11 CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT CREATIVE VENTURES, LLC et al., Plaintiffs and Appellants, H034883 (Santa Clara County Super.
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