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Eisenstein v. DiPrimio

The law firm that received the proceeds of a usurious business loan from the debtor to satisfy an unrelated judgment was entitled to defend the creditor's constructive trust claim by arguing that the creditor had unclean hands.

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Bernie and Susan Eisenstein, L.P. Eisenstein sued Joseph DiPrimio to recover the principal and interest on a $620,000 note.1 Eisenstein also sued the law firm of Holland and Knight, L.L.P., seeking to impose a constructive trust over a portion of the loan proceeds paid into a client’s trust account by DiPrimio. See OCGA § 53-12-93 a. The trial court granted summary judgment to Holland and Knight, finding that Eisenstein was not entitled to equitable relief because the loan to DiPrimio was usurious under Georgia law. Eisenstein appeals from this order. Finding no error, we affirm.

A defendant may prevail on a motion for summary judgment under OCGA § 9-11-56 c by showing the court that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the plaintiff, warrant judgment as a matter of law. Lau’s Corp. v. Haskins, 261 Ga. 491 405 SE2d 474 1991. The facts in this case show that in April 1998, Eisenstein issued a note to DiPrimio, the proceeds of which were to be used for the purchase of restaurant equipment. The face value of the note was $620,000, although DiPrimio only received $500,000 cash—the remaining $120,000 consisted of an “origination fee.” The terms of the loan required DiPrimio to pay Eisenstein $10,000 per month for 17 months, then make a lump sum “balloon” payment of $830,000 in the 18th month, for a total payment of $1,000,000.

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