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IN RE DOMINGUEZ

No. 91-56312.

995 F.2d 883 (1993)

In re H. Frank DOMINGUEZ, Debtor. Alan D. SMITH, Chapter 11 Trustee of the Estate of H. Frank Dominguez, Appellant, v. David MILLER; Denyse Miller; H. Frank Dominguez; Edward McDonald, Office of the U.S. Trustee, Appellees.

United States Court of Appeals, Ninth Circuit.

Decided May 4, 1993.

As Amended on Denial of Rehearing July 8, 1993.

Attorney(s) appearing for the Case

Marjorie S. Steinberg, Tuttle & Taylor, Los Angeles, CA, for appellant.

David M. Stern, Stern, Neubauer, Greenwald & Pauly, Santa Monica, CA, for appellees.

Leonard A. Goldman, Goldman, Gordon & Lipstone, Los Angeles, CA, for debtor Frank Dominguez.

Edward McDonald, Los Angeles, CA, Office of the U.S. Trustee.

Before: CANBY, BOOCHEVER, and THOMPSON, Circuit Judges.

CANBY, Circuit Judge:

In this case we decide whether a loan contract is usurious when it specifies an interest rate that exceeds the maximum allowed under California's usury law, but also provides that if payments exceed the maximum legal interest rate, the amount in excess will be applied toward the principal.

BACKGROUND

This case involves two loans that appellees David and Denyse Miller made to Dominguez, the debtor in bankruptcy, and a subsequent...

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