Case Citation
Legal Case Name

NV ONE, LLC v. POTOMAC REALTY CAPITAL, LLC Case Brief

Supreme Court of Rhode Island2014
84 A.3d 800

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Case Brief Summary & Legal Analysis

General Brief
3 min read

tl;dr: A lender charged a usurious interest rate on a commercial loan. The Rhode Island Supreme Court held that a “usury savings clause” in the contract, meant to automatically correct the illegal rate, was unenforceable as it violated the strong public policy against usury, rendering the loan void.

Legal Significance: Establishes for the first time in Rhode Island that usury savings clauses are unenforceable as a matter of public policy. This holding reinforces the doctrine that courts will not enforce contract terms that undermine the purpose of a protective statute, even between sophisticated commercial parties.

NV ONE, LLC v. POTOMAC REALTY CAPITAL, LLC Law School Study Guide

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Case Facts & Court Holding

Key Facts & Case Background

NV One, LLC (plaintiff) entered into a $1.8 million commercial loan agreement with Potomac Realty Capital, LLC (PRC, defendant) for a property renovation. The contract contained a “usury savings clause” intended to automatically reduce any illegal interest rate to the maximum allowed by law. PRC never disbursed the full $1.8 million, holding substantial funds in reserves that were not escrowed. However, PRC calculated and charged interest on the full, undisbursed loan amount. This practice resulted in an effective annual interest rate exceeding Rhode Island’s statutory maximum of 21%. The loan agreement also contained a default interest rate of 24%, which is facially usurious under the statute. When NV One defaulted, PRC attempted to collect interest at this 24% rate. NV One sued to have the loan declared void for usury. PRC defended by arguing the savings clause was a valid contractual term that should be enforced to cure the violation and save the agreement.

Court Holding & Legal Precedent

Issue: Is a usury savings clause in a commercial loan contract enforceable when it purports to cure an otherwise usurious interest rate, or is such a clause void as against public policy?

No. The usury savings clause is unenforceable because it violates the strong Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum

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Legal Issue

Is a usury savings clause in a commercial loan contract enforceable when it purports to cure an otherwise usurious interest rate, or is such a clause void as against public policy?

Conclusion

This case serves as a key precedent on the intersection of contract Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamc

Legal Rule

A contract term is unenforceable if it violates public policy. In Rhode Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea com

Legal Analysis

The court began its analysis by establishing that a contract term is Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation

Flash-to-Full Case Opinions

Flash Summary

  • A usury savings clause in a loan contract is unenforceable in
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat

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