Court Opinion

ID: 9598571
Source: CourtListenerOpinion
Date Created: 2023-08-22 01:09:58.317969+00
Date Added: 2024-06-11T18:01:42.179528
License: Public Domain

Dolliver, J.
The first opinion in this case was filed on October 19, 1978, and can be found in 90 Wn.2d 680, 586 P.2d 830 (1978). We adhere to that opinion, but add the following comments:
The heart of the analysis of the defendant is that the Restatement (Second) Conflict of Laws § 203, comments a *52and b (1971) must be read harmoniously. This has been done.
Comment a to section 203 requires the rate of interest to be stipulated in the contract:
The rule of this Section applies only when (1) the interest rate stipulated in the contract is permitted in a state which has a substantial relationship to the transaction and the parties and (2) is not greatly in excess of the rate permitted by the general usury statute of the state of the otherwise applicable law. Application of the rule is not prevented by the fact that the state with the saving law authorizes a rate of interest greatly in excess of that permitted by the state of the otherwise applicable law. The rule is applicable in such a situation provided that the rate of interest stipulated in the contract is not greatly in excess of the rate permitted by the general usury law of the state of the otherwise applicable law.
(Italics ours.)
Under the circumstances envisioned in comment a, the fact that New York authorizes up to 25 percent interest is immaterial if the rate of interest stipulated or provided for in the contract is not greatly in excess of that permitted by the laws of Washington, i.e., 12 percent. Thus, even though the contract was governed by New York law, if it had a provision/stipulation that 13 or 14 percent would be the highest rate permitted, the contract would be valid. See comment 6. This was not done. No actual rate was stipulated or provided for in the margin account contracts. Rather, the rate of interest was open ended, and it was permissible that it be as high as 25 percent, the maximum rate of interest in New York. The contract cannot be sustained against a charge of usury under Washington law.
Again, we hold (1) the summary judgment of the trial court as to the applicable law is reversed; (2) the judgment of the trial court as to the method of computing interest is affirmed; (3) the case is remanded to the Superior Court to divide the certified class into subclasses which will allow *53proper treatment under the conflict of laws analysis contained in the opinion filed in this case on October 19, 1978, and herein.
Rosellini, Wright, Hicks, and Williams, JJ., concur.