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HILL v. TAMMAC CORPORATION
November 4, 2005.
BRIAN K. HILL and YVONETTE A. HILL, Plaintiffs
TAMMAC CORPORATION, Defendant.
The opinion of the court was delivered by: YVETTE KANE, District Judge
Pending before the Court are proposed findings of fact and
conclusions of law that have been submitted by the United States
Bankruptcy Court for the Middle District of Pennsylvania for
entry of final judgment in the above-captioned adversary
proceeding pursuant to 28 U.S.C. § 157(c)(1). (Doc. No. 1.)
Neither party has filed objections to any portion of the
Bankruptcy Court's proposed findings or conclusions.
In the underlying adversary proceeding, Brian K. Hill and
Yvonette A. Hill ("Debtors") claimed that Defendant Tammac
Corporation violated Pennsylvania usery laws with respect to a
promissory note executed on October 21, 1999 in which Debtors
agreed to pay $36,797.50 to Tammac over 25 years at a rate of 15%
interest (the "Note"). Debtors commenced the underlying adversary
proceeding seeking to recover interest charges paid on the Note
in excess of the amount allowable under 41 P.S. § 301 et
seq., and further seeking to treble the damages pursuant to
41 P.S. § 502. Tammac's sole defense to Debtors' claims was that
with respect to the Note given in 1999, Tammac was exempted from Pennsylvania usery law pursuant to three separate federal
statutes that Tammac argued preempted state law. Specifically,
Tammac argued that provisions of the Federal Depository
Institution Deregulation and Monetary Control Act of 1980,
12 U.S.C. § 1735f-7a, the National Housing Act,
12 U.S.C. § 1735f-5b, and the Truth in Lending Simplification and Reform Act,
as amended, 15 U.S.C. § 1602(f), preempted state usery laws with
respect to the Note. Following an evidentiary hearing, the
Bankruptcy Court found that Tammac failed to demonstrate that it
made a sufficient amount of real estate-related loans in 1999 to
qualify as a creditor entitled to exception from Pennsylvania
usery law pursuant to the federal statutes cited above.
Accordingly, the Bankruptcy Court found that Tammac was subject
to state usery laws at the time the Note was executed and the
loan to the Debtors originated, and further found that the
interest rate charged by Tammac under the Note exceeded the rate
allowed by state law. On the basis of these findings, the
Bankruptcy Court recommended that the Court enter judgment in
favor of Debtors and assess damages against Tammac in the amount
Section 157(c)(1) of the Title 28 of the United States Code
provides as follows:
A bankruptcy judge may hear a proceeding that is not
a core proceeding but that is otherwise related to a
case under title 11. In such proceeding, the
bankruptcy judge shall submit proposed findings of
fact and conclusions of law to the district court,
and any final order or judgment shall be entered by
the district judge after considering the bankruptcy
judge's proposed findings and conclusions and after
reviewing de novo those matters to which any party
has timely and specifically objected.
28 U.S.C. § 157(c)(1).
The Court has carefully reviewed the Bankruptcy Court's
findings in the underlying adversary proceeding, and has
conducted a de novo review of the law relevant to disposition of
Debtors' claims and Tammac's preemption defense. Neither party filed any timely
objections to the Bankruptcy Court's proposed findings and
conclusions of law. Upon review, the Court adopts in toto the
Bankruptcy Court's proposed findings of fact and conclusions of
law and final judgment shall accordingly be entered in favor of
WHEREFORE, for the reasons set forth above, IT IS HEREBY
ORDERED THAT the Court adopts the Bankruptcy Court's proposed
findings of fact and conclusions of law (Doc. No. 1) in full. IT
IS FURTHER ORDERED THAT judgment is hereby entered in favor of
Debtors and against Defendant Tammac. IT IS FURTHER ORDERED
THAT Defendant Tammac shall pay to Debtors damages in the amount
of $19,154.40. The Clerk of Court shall close the file.
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