Gibson

In a class action accusing a federally chartered savings association of committing unfair business practices, the trial court found that federal law preempts the plaintiffs’ claim and entered judgment in favor of the defendant. The plaintiffs appeal. Finding that the trial court’s belief that the action was preempted was mistaken and that the defendant has not demonstrated any other ground on which to affirm the judgment, we reverse.

Factual and Procedural Background

In April of 1996, Harry Gibson and Joyce A. Gibson, on behalf of themselves and all other persons similarly situated, sued World Savings and Loan Association. In substance, the complaint alleges; that the potential class members are borrowers under secured loans made or serviced by World; that those borrowers failed to maintain hazard insurance on the real property securing the loans; that although it was entitled to simply reinstate the borrowers’ insurance policies, World purchased replacement hazard insurance (forced order insurance or FOI) from an insurer of its own choice; that those FOI policies were much more expensive than the borrowers’ policies; that World benefited financially from purchasing the…