Jim Rosica
An appellate court has declined a small business lender’s request to reconsider an opinion against it involving a legislatively created loan program to help companies rebound from the recession.
The 1st District Court of Appeal on Monday denied a request from the Black Business Investment Fund of Central Florida for the court to rehear the case or certify it as a question of “great public importance” to the state Supreme Court.
A three-judge panel had agreed with a lower court that the investment fund had overcharged lenders in the Economic Gardening Business Loan Pilot Program and should have returned the money.
Florida’s Department of Economic Opportunity (DEO) coordinated the loan program.
The $8.5 million program in question, a low-interest loan program for the state’s small businesses, was created by lawmakers in 2009 as a response to the then-ongoing recession. The investment fund was picked as a loan administrator.
The program allowed administrators to get a loan origination fee, payable at closing, of 1 percent of each loan and to take a yearly “servicing fee” of 0.625 percent of a loan’s outstanding principal balance.
But DEO soon told the fund that it had misunderstood the calculations and demanded it return fees and money not yet loaned.
That’s because the fund incorrectly charged a monthly fee of 0.625 percent, rather than an annual fee of the same rate.
But the investment fund didn’t comply and the agency sued on breach of contract and conversion claims. Conversion is broadly defined as a civil-law form of theft, or wrongly taking someone else’s property or money for one’s own use.
A lower court granted summary judgment, awarding $1.1 million in damages to DEO; the appellate panel later agreed.
