Opinion ID: 722630
Heading Depth: 2
Heading Rank: 1

Heading: Hubbard's Loan Contract.3

Text: 5 1. The parties agree Hubbard's loan should be interpreted in light of the applicable regulations of the Federal Home Loan Bank Board. Hubbard argues the regulations as they read in 1982 governed her loan contract. Fidelity contends the regulations as they read in 1983 applied. 6 When Hubbard obtained her loan, Fidelity was authorized to make loans under the regulations as they read in either 1982 or 1983. See 12 CFR § 545.33(i)(2) (1983). Interpreting the loan in light of the 1982 regulations, Hubbard argues the payment adjustment became effective on January 1 of each year, the date Hubbard began to make the adjusted payments. See 12 CFR § 545.6-4a(e) (1982). Thus, Hubbard argues, the loan required Fidelity to give notice of any payment adjustment 30-45 days before January 1. 4 7 The district court rejected Hubbard's interpretation as unworkable because it would require Fidelity to review the applicable index one day and on the next day adjust the interest rate and the payment amount, and send Hubbard the requisite notice of all the changes in the loan calculations. 824 F.Supp. at 916. Interpreting the contract consistently with the regulations as they read in 1983, the district court concluded the payment adjustment became effective on December 1, the date the interest rate changed, not on January 1, when Hubbard started making the adjusted payments. 12 CFR § 545.33(e)(4) (1983). Thus, the district court determined the contract required Fidelity to give Hubbard notice 30-45 days before December 1. 824 F.Supp. at 915. 8 On the record at summary judgment, we cannot reject Hubbard's interpretation of the date the payment adjustment became effective as unworkable. Hubbard contended Fidelity could have issued the notices within the available time, and Fidelity did not present conclusive evidence to the contrary. 9 Because both interpretations are consistent with the regulatory scheme, and the contract terms are reasonably susceptible of either interpretation, the contract is ambiguous. Santa Clara v. Watkins, 984 F.2d 1008, 1012-13 (9th Cir.1993). On remand, a trier of fact must determine the parties' intent by weighing, inter alia, Fidelity's claim of impracticality against Hubbard's evidence that Fidelity unilaterally changed its interpretation after first adopting Hubbard's. Laborers Health and Welfare Trust Fund v. Kaufman & Broad, 707 F.2d 412, 418 (9th Cir.1983) (noting that course of performance under a contract is to be given great weight in interpreting an ambiguous contract). 10 2. Fidelity's August 22, 1991 letter to Hubbard was misleading and tended to dissuade Hubbard from suing and therefore tolled the statute of limitations on Hubbard's breach of contract claims. However, no evidence suggests Fidelity concealed its alleged breach before it sent the letter; Hubbard's claims for breaches committed prior to August 22, 1987, are therefore barred. Cal.Civ.Proc.Code § 337(1). 5 11