Kirk

Source One Mortgage Services Corporation (Source One) appeals from a jury verdict awarding compensatory and punitive damages to Charles R. B. Kirk for breach of his rights regarding an impound account created under the terms of Civil Code section 2954, together with his claims for breach of contract, libel, and interference with contract. In the published portion of this opinion, we hold section 2954 requires that voluntary mortgage impound accounts created under its terms be terminable at the request of the borrower. Thus, the trial court properly directed a verdict for Kirk on his claim that Source One violated section 2954 when it required him to sign a waiver form containing terms inconsistent with the statute before it would terminate his account. In the unpublished portion of this opinion, we address Source One’s other claims of error, as well as Kirk’s arguments on cross-appeal. We reverse and remand for retrial on the claims of libel, injunctive relief, and damages.

Factual and Procedural Background

In January 1987, Kirk refinanced his single-family residence with IMCO Realty Services, Inc. (IMCO). He agreed to maintain an impound account. Under the agreement,…