Judge J. Paul Oetken
Luna was a 50 percent shareholder of The Lion & The Bull Films (L&B Films). A long friendship between his mother and Carlone’s mother was key to a written agreement under which Carlone would be repaid $300,000within 30 daysin exchange for a $115,000 loan funding a film. Luna’s partner Flener guaranteed the loan’s $115,000 amount. District court granted Carlone default judgment against L&B Films in her contract breach action. It also permitted Carlone to pierce L&B Films’ corporate veil to hold Luna liable for L&B Films’ breach. Flener’s liability to Carlone for the $115,000 loan amount was undisputed. However, noting that the loan stemmed from the friendship between Carlone’s and Luna’s mothers, the court concluded that that friendshipas well as Carlone’s and Luna’s own longstanding relationshipestopped Luna from asserting a usury defense to contractual liability. Thus Luna was jointly and severally liable with L&B Films for $300,000 in damages resulting from breach of the agreement with Carlone. A usury defense by Flener failed. Among other things, because L&B Films would have been estopped from interposing a usury defense, Flener, as guarantor, was also estopped from asserting the usury defense.
