- 3 -
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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