California Federal Savings & Loan Ass'n v. Superior Court

Opinion

HASTINGS, J.—

This is a class action lawsuit against California Federal Savings and Loan Association (Cal Fed) in which the plaintiffs contend, among other things, that Cal Fed’s method of computing the “interest rate adjustment” on variable interest rate loans is designed to yield consistent interest rate increases, but almost never a decrease. The issue in this original proceeding is whether Cal Fed’s peremptory challenge (Code Civ. Proc., § 170.6) of the Honorable Norman Dowds was timely filed. We hold that it was not.

[269]

This action was filed in September 1984. In late 1985, Cal Fed filed a motion for summary adjudication of issues (Code Civ. Proc., § 437c, subd. (f)). One of the crucial issues in the case, and one of the issues which Cal Fed sought to have adjudicated, involved an interpretation of the promissory note which Cal Fed utilized for variable interest rate loans. Judge Dowds resolved this issue in favor of Cal Fed.

1

In May 1986, plaintiffs initiated proceedings to have the action certified as a class action. Plaintiffs’ “Motion for Class Certification” was met with a number of evidentiary and other objections by Cal Fed. Plaintiffs filed an equally weighty response to the objections. Further objections, replies, and rebuttals ensued. After several months, the motion for class certification was heard on September 8, 1986. At that time, Judge Dowds vacated certain portions of his prior ruling on Cal Fed’s motion for summary adjudication of issues, including his ruling relating to the interpretation of the promissory note. In his minute order of September 8, 1986, Judge Dowds stated: “On further consideration of the terms of the promissory note in question in connection with the Court’s consideration of the plaintiffs’ motion for class certification and, in particular, upon consideration of the definition of the term ‘effective interest rate’ as set forth therein, the Court is tentatively of the opinion that the plaintiffs’ interpretation of the note is correct and the defendant’s interpretation is incorrect. Accordingly, the Court’s prior order is vacated as above set forth and the matter is set for further argument.”

Prior to this “further hearing,” Cal Fed tried unsuccessfully to withdraw its motion with respect to that issue, “without prejudice to its renoticing the same prior to trial,” on the ground that resolution of that issue was unnecessary to the determination of whether the action should be certified as a class action.