Wash. Mut. Bank v. Superior Court of Orange Cty.

The trial court certified this case as a nationwide class action without determining the force and effect of contractual agreements that, according to the defendant, would require the application of different states’ laws in the action. The Court of Appeal found certification was proper because the defendant had failed to show that the contractually selected laws would lead to different results. We conclude the certification order must be vacated, for it was based upon an incomplete and erroneous analysis of factors relevant to certification.

Factual and Procedural Background

American Savings Bank, now Washington Mutual Bank, FA (hereafter ASB), originated home mortgage loans in California, Arizona, Colorado, and Texas, and purchased loans from other lenders throughout the United States. ASB’s standard loan documents included a deed of trust that requires the mortgagor to maintain hazard insurance on the secured property and provides that if the mortgagor fails to do so, “then Lender may do and pay for whatever is necessary to protect the value of the Property and Lender’s rights in the property,” and “[a]ny amounts [so] disbursed . . . shall become additional debt” of…