Vernon Miller - Page 3




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            was to bear interest at 16 percent.  However, the interest rate                            
            on the Miller loan was deemed to be usurious under California                              
            law.                                                                                       
                  The note evidencing the Miller loan stated in pertinent                              
            part:  “Should suit be commenced to collect this note or any                               
            portion thereof, such sum as the Court may deem reasonable shall                           
            be added hereto as attorney’s fees.”                                                       
                  The Miller loan was not paid when due.  On February 20,                              
            1987, petitioner filed a complaint in the Superior Court of                                
            California for Santa Clara county against, inter alia, Partner-                            
            ship, Mr. Wire, and Ms. Turner for, inter alia, the amount due to                          
            him on default of the Miller loan.  (We shall refer to that                                
            lawsuit as the Miller loan litigation.)  After a trial, it was                             
            determined that petitioner was entitled to recover $75,000 of the                          
            Miller loan, with offsets of $72,358.88 attributable to the                                
            amount of principal that he had recovered from Ms. Turner.  As of                          
            1991, petitioner had recovered $72,358.88 of the $75,000 Miller                            
            loan.                                                                                      
                  The Miller loan litigation continued after 1993.  Petitioner                         
            incurred substantial legal expenses through 1993 (i.e., at least                           
            $90,9994) as well as after 1993 (i.e., at least $69,693) with                              
            respect to his claims regarding the Miller loan.  With respect to                          

                  4For convenience, we have rounded to the nearest dollar the                          
            respective amounts of legal fees that petitioner incurred and/or                           
            paid.                                                                                      





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