On February 13, 2025, a New York intermediate appellate court affirmed the grant of summary judgment against energy companies that defaulted on their loan obligations. In 2020 and 2021, an engineering firm specializing in sustainable energy made a series of loans to energy companies for the financing of solar energy projects. The loans totaled $3.75 million. The energy companies did not make the required payments, and the engineering firm sued. The trial court granted summary judgment to the engineering firm.
The energy companies argued that the loans violated New York’s criminal usury statute, which caps interest rates at 25%. According to the energy companies, the loans carried ordinary interest rates of between 8% and 10%. In the event of default, a default rate of between 20% and 25% was added, bringing the total interest rates to between 28% and 35% interest. These rates, the energy companies claimed, violated New York law. Both the trial court and the appellate court rejected that argument. The appellate court pointed out that New York’s criminal usury law only applies to pre-default obligations—that is, interest rates can exceed 25% after a default. Here, the criminal usury statute was satisfied because the interest rates were below 25% during the ordinary lives of the loans. Accordingly, the court affirmed the grant of summary judgment to the engineering firm.
The case is Eco Engineering, Inc. v. Source Renewables, LLC, No. 2024-04422 (Feb. 13, 2025). The plaintiff is represented by Norris McLaughlin, PA. The defendants are represented by DelBello Donnellan Weingarten Wise & Wiederkehr, LLP. The opinion is available here.
