Couple Awarded $1 Million in Suit Over Loan

The owners of a small Nigerian restaurant in South-Central Los Angeles were awarded $1.07 million Tuesday in their lawsuit against a Beverly Hills mortgage firm that nearly foreclosed on their home and business when they refused to pay loan costs of more than 36%.

Deliberating less than three hours, a federal court jury in Los Angeles sided with Geoffrey and June Ukwuoma, owners of the West African Kitchen, who took out a loan with United Financial Services in 1985 to redecorate and expand their rapidly growing eatery on Vernon Avenue.

It was believed to be the first civil suit to be tried in Los Angeles under federal racketeering laws, according to his attorney.

Tell Loan Condition

Ukwuoma, a Nigerian immigrant who had opened the restaurant in 1984 “to let people know the type of food we eat in West Africa,” said Barry C. Marine, an official of United Financial Services, told the couple that because the restaurant was in a predominantly black neighborhood, they would have to sign over a second trust deed to their home in order to borrow the $59,500 they sought. They signed a variety of uncompleted loan documents after Marine allegedly assured them it would “facilitate the transaction.”

But when the completed forms were returned to them, they indicated that the loan firm held trust deeds on both the home and the restaurant, and had filled in an interest rate of 18%, much higher than what had been agreed to, according to Ukwuoma’s attorneys, James H. Broderick Jr. and Stephen T. Owens.

Moreover, the company had tacked on an additional $15,000 in loan fees, raising the effective interest rate to 36.07%, and the 14-to-30-year loan period on which they had agreed had been reduced to one year, Ukwuoma said.

“With all of my property tied up, I couldn’t borrow money, I couldn’t sell it, I couldn’t do anything,” he said. When he refused to pay, United Financial Services inititiated foreclosure proceedings on both properties.

Because the suit was brought under the racketeering statute, Ukwuoma was awarded treble damages and recovery of attorneys’ fees, all of which should bring the final award up to about $1.4 million, Broderick said.

‘Happy the System Works’

“The psychological and emotional trauma I went through cannot be compensated with money,” Ukwuoma said. “I’m just happy the system works.”

Neil A. Scotti, who represented Marine, United Financial Services and several other defendants, said he would have no comment on the verdict, reached after a two-week trial before U.S. District Judge David W. Williams.

“We maintained from the beginning that there wasn’t any fraud, and there wasn’t any breach of contract and there wasn’t any (racketeering) violations whatsoever,” Scotti said. “The whole thing was disputed.”