"A referee's credibility determinations are entitled to great weight because, as the trier of fact, he or she has the opportunity to see and hear the witnesses and to observe their demeanor" ( Matter of Piller v. Schwimmer , 135 A.D.3d 766, 769, 22 N.Y.S.3d 572 [internal quotation marks omitted]; seeMinelli Constr. Co., Inc. v. New York City Sch. Constr. Auth. , 167 A.D.3d at 594, 87 N.Y.S.3d 482 ). Here, contrary to the plaintiff's contention, the record substantially supports the Referee's determination that the affirmative defense of civil usury was available to the defendants in this action, despite the fact that the loan was made to a limited liability corporation (see Limited Liability Company Law § 1104[b] ; see alsoSchneider v. Phelps , 41 N.Y.2d 238, 242–244, 391 N.Y.S.2d 568, 359 N.E.2d 1361 ; Stanley Weisz, P.C. Retirement Plan v. NCHD Assoc. , 237 A.D.2d 276, 277, 655 N.Y.S.2d 381 ). The record reflects that A. Davis, LLC, was created eight days prior to the execution of the subject note and mortgage, that its sole asset is the mortgaged premises, and that the premises is a two-family dwelling (see Limited Liability Company Law § 1104[b] ). Moreover, the Referee's factual finding that the loan was taken for personal reasons and not to finance a profit-motivated enterprise is substantially supported by the evidence in the record (seeSchneider v. Phelps , 41 N.Y.2d at 243–244, 391 N.Y.S.2d 568, 359 N.E.2d 1361 ; Stanley Weisz, P.C. Retirement Plan v. NCHD Assoc. , 237 A.D.2d at 277, 655 N.Y.S.2d 381 ; cf.Webar, Inc. v. Capra , 212 A.D.2d 594, 595–596, 622 N.Y.S.2d 585 ).
A transaction is usurious under civil law when it imposes an annual interest rate exceeding 16% (see General Obligations Law § 5-501 [1]; Banking Law § 14-a[1]), and is usurious under criminal law when it imposes an annual interest rate exceeding 25% (see Penal Law §§ 190.40, 190.42). A usurious contract is void and relieves the plaintiff of the obligation to repay principal and interest thereon (see General Obligations Law § 5-511; Seidel v. 18 E. 17th St. Owners, 79 NY2d 735, 586 NYS2d 240; Stanley Weisz, P.C. Retirement Plan v. NCHD Assoc., 237 AD2d 276, 655 NYS2d 381). The court went on to make two express finds, one, that defendant Malky failed to meet the foregoing burden inasmuch as ". . .the various agreements constituted a loan, as their principal purpose was to provide the Abirs with interim relief from foreclosure by substituting high-interest, short term debt for the bank loan (see Del Rubio v. Duchesne, 284 AD 89, 130 NYS2d 572). . .; and, two, that the Abir/Malky agreement was usurious, as the annual interest rate imposed therein was in excess of 25% (see General Obligations Law § 5-501 [1]; Banking Law § 14-a[1]; Penal Law §§ 190.40, 190.42), and thus void and unenforceable (see General Obligations Law § 5-511; Seidel v. 18 E. 17th St. Owners, 79 NY2d 735, 586 NYS2d 240; Stanley Weisz, P.C. Retirement Plan v. NCHD Assoc., 237 AD2d 276, 655 NYS2d 381).
A transaction is usurious under civil law when it imposes an annual interest rate exceeding 16% ( see General Obligations Law § 5-501; Banking Law § 14-a), and is usurious under criminal law when it imposes an annual interest rate exceeding 25% ( see Penal Law §§ 190.40, 190.42). A usurious contract is void and relieves the plaintiff of the obligation to repay principal and interest thereon ( see General Obligations Law § 5-511; Seidel v 18 E. 17th St. Owners, 79 NY2d 735; Stanley Weisz, P.C. Retirement Plan v NCHD Assoc., 237 AD2d 276). Malky failed to meet its burden in this regard.
There is no merit to the defendants' claim that the first of the six promissory notes was usurious. Except for a limited exception not applicable in the instant case, the defense of usury is not available to a corporate defendant (see, General Obligations Law § 5-521; Schneider v. Phelps, 41 N.Y.2d 238, 242; Essex v. Newman, 237 A.D.2d 486; Weisz, P.C. Retirement Plan v. NCHD Assocs., 237 A.D.2d 276), and is not available to an individual guarantor of the corporate obligation (see, Schneider v. Phelps, supra).
Since December 1, 1980, the maximum legal interest rate for loans under New York State law has been 16% per annum (General Obligations Law § 5-501; Banking Law 14-a; see, e.g., Stanley Weisz, P.C. Retirement Plan v. NCHD Assocs., 237 A.D.2d 276). Accordingly, an interest rate of 19.5% is usurious on its face unless the lender qualifies for the Federal exemption set out in12 U.S.C. § 1735f-5 and -7.
Since December 1, 1980, the maximum legal interest rate for loans under New York State law has been 16% per annum (General Obligations Law § 5-501; Banking Law 14-a; see, e.g., Stanley Weisz, P.C. Retirement Plan v. NCHD Assocs., 237 A.D.2d 276). Accordingly, an interest rate of 19.5% is usurious on its face unless the lender qualifies for the Federal exemption set out in 12 U.S.C. § 1735f-5 and -7.
Criminally usurious contracts are unenforceable (see General Obligations Law § 5-521 [3], § 5-511; Penal Law § 190.40; Lloyd Capital Corp. vPat Henchar, Inc., 80 NY2d 124, 127 [ 1992]; Seidel v 18 E. 17th St. Owners, 79 NY2d 735, 741 n2 [1992]). "A usurious contract is void and relieves the plaintiff of the obligation to repay principal and interest thereon" (Abir vMalky, Inc., 59 AD3d 646, 649 [2d Dept 2009]; see also General Obligations Law § 5-511; Seidel, 79 NY2d at 740; Venables v Sagona, 85 AD3d 904, 905 [2d Dept 2011]; Stanley Weisz, P.C. Retirement Plan v NCHD Assoc., 237 AD2d 276, 277 [2d Dept 1997]; Fareriv Rain's Intl., 187 AD2d 481, 482 [2d Dept 1992]). However, "[t]here is a strong presumption against the finding of usurious intent" (Lehman vRoseanne Invs. Corp., 106 AD2d 617, 618 [2d Dept 1984]; see also Zhavoronkin vKoutmine, 52 AD3d 597, 598 [2d Dept 2008]; Richardson v Brisard & Brisard, Inc., 36 Misc 3d 1211[A], 2012 NY Slip Op 51250[U], *4 [Sup Ct, Kings County 2012]).
It “is usurious under criminal law when it imposes an annual interest rate exceeding 25%” (Abir, 59 AD3d at 649 ; see also Penal Law §§ 190.40, 190.42 ). “A usurious contract is void and relieves the [borrower] of the obligation to repay principal and interest thereon” (Abir, 59 AD3d at 649 ; see also General Obligations Law § 5–511 ; Seidel v. 18 E. 17th St. Owners, 79 N.Y.2d 735, 740 [1992] ; Stanley Weisz, P.C. Retirement Plan v. NCHD Assoc, 237 A.D.2d 276, 277 [2d Dept 1997] ).
It "is usurious under criminal law when it imposes an annual interest rate exceeding 25%" (Abir, 59 AD3d at 649; see also Penal Law §§ 190.40, 190.42). "A usurious contract is void and relieves the [borrower] of the obligation to repay principal and interest thereon" (Abir, 59 AD3d at 649; see also General Obligations Law § 5-511; Seidel v 18 E. 17th St. Owners, 79 NY2d 735, 740 [1992]; Stanley Weisz, P.C. Retirement Plan v NCHD Assoc., 237 AD2d 276, 277 [2d Dept 1997]).
Under New York law, usurious contracts are unenforceable (see General Obligations Law §§ 5-521, 5-511; Penal Law § 190.40; Lloyd Capital Corp. v Pat Henchar, Inc., 80 NY2d 124, 127 [1992]; Seidel v 18 E. 17th St. Owners, 79 NY2d 735, 740-741 [1992]). A usurious contract is void and relieves the obligor thereunder of the obligation to repay principal and interest hereon (see General Obligations Law § 5-511; Seidel, 79 NY2d at 740; Blue Wolf Capital Fund II, L.P. v American Stevedoring, Inc., 105 AD 3d 178, 182 [1st Dept 2013]; Venables v Sagona. 85 A 03d 904, 905 [2d Dept 2011]; Abir v Malky, Inc., 59 AD3d 646, 649 [2d Dept 2009]: Stanley Weisz, P.C. Retirement Plan v NCHD Assoc., 237 AD2d 276, 277 [2d Dept 1997]; Fareri v Rain's Intl., 187 AD2d 481, 482 [2d Dept 1992]).