Jones v. Wells Fargo Bank CA2/7

Filed 2/17/15 Jones v. Wells Fargo Bank CA2/7
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

OPAL JONES, et al., B237282

Plaintiffs and Respondents, (Los Angeles County
Super. Ct. No. BC337821)
v.

WELLS FARGO BANK, N.A. etc., et al.,

Defendants and Appellants.

APPEAL from a judgment of the Superior Court of Los Angeles County,
Anthony J. Mohr, Judge. Affirmed.

Skadden, Arps, Slate, Meagher & Flom, Harriet S. Posner, Carl Alan Roth,
Kevin J. Minnick, Allison B. Holcombe and Eric Waxman for Defendants and
Appellants.

Cappello & Noel, A. Barry Cappello, Leila J. Noel and Wendy D. Welkom;
Pine & Pine and Norman Pine for Plaintiffs and Respondents.

______________________________________
 In August 2005, Opal Jones, Claudia A. Caldwell, Kalina Iovcheva, Vincent Jones
and C. Renae Walker Jones (plaintiffs) filed a lawsuit against Wells Fargo Bank, N.A.
and Wells Fargo Home Mortgage (collectively WF). The plaintiffs were all customers of
a Los Angeles area branch office of WF who obtained loans to purchase homes. They
claimed that during the application process, WF denied them access to a computer
program for obtaining favorable rates on those loans based on the ethnic makeup of the
neighborhood of the branch office. They alleged causes of action for violation of the
Unruh Act (Civ. Code, § 51), the Fair Employment and Housing Act ( FEHA, Gov.
Code, § 12900 et seq.), the Consumer Legal Remedies Act (CLRA, Civ. Code, § 1750 et
seq.), the Unfair Competition Law (UCL, Bus. & Prof. Code, § 17200) and breach of
contract.
The trial court certified a class on the Unruh Act cause of action in August 2009.
Shortly before trial, WF moved to decertify the class and the trial court denied the
motion on November 8, 2010.
A jury trial on the class action on the Unruh Act cause of action commenced in
November 2010. In March 2011, the jury returned a verdict finding WF liable to the
class on the Unruh Act cause of action, and awarded statutory damages of $3.52 million.1
WF made another motion to decertify the class on June 29, 2011, which the court
denied.
The judgment was entered on September 12, 2011, in the amount of $3.52 million
plus interest on behalf of the entire class. WF appealed, contending the trial court should
not have certified the class and then erred in denying the subsequent motions to decertify
the class.

1
The trial also included individual FEHA claims for plaintiffs Opal Jones, Victor
Jones, Claudia Caldwell, Renae Walker Jones, and Iovcheva, breach of contract claims
for Opal Jones, Vincent Jones, Claudia Caldwell, Renae Walker Jones, and Iovcheva.
The jury found WF liable on the individual claims of some of the plaintiffs but those
findings are not at issue in this appeal.

2
 In November 2011, plaintiffs filed a motion for attorney fees, seeking an award of
$15,753,101. Subsequently the trial court held a hearing on the motion and awarded
plaintiffs $4,988,330. Plaintiffs appealed that ruling in a separate case, No. B243333.
On June 18, 2012, the trial court stayed execution of the judgment until all appeals
became final.
Plaintiffs moved to consolidate this appeal with No. B243333. On March 21,
2014, we denied that motion but agreed to consider the appeals concurrently for the
purposes of oral argument and decision. 2
FACTUAL & PROCEDURAL BACKGROUND
1. Preliminary Matters
a. Appendices
WF’s opening brief was filed on July 17, 2012. It concurrently filed an
application to file its Appellant’s Appendix under seal pursuant to California Rules of
Court, rule 846(c). It filed a redacted version of the Appellant’s Appendix. On August
14, 2012, the court denied the motion and the non-redacted Appellant’s Appendix was
filed on August 29, 2012.
Plaintiffs’ responsive brief on appeal was filed January 28, 2013. Concurrently
with the filing of its reply brief, WF filed 14 volumes of Reply Appendices. The Reply
Appendices contain declarations filed in support of and in opposition to the initial motion
for class certification, plaintiffs’ objections thereto and declarations submitted in support
of plaintiffs’ reply brief.
Plaintiffs filed a motion to strike the Reply Appendices and requested sanctions
arguing WF should not be allowed to augment the record.

2
Case No. B243333 is addressed in a separate opinion.

3
 WF filed an opposition to the motion, contending its initial Appellant’s Appendix
contained all items necessary for proper consideration of the issues. It claimed in its
reply brief that it added to the Appendix “to the extent that Plaintiffs contend that the
Appendix was somehow inadequate” and to counter allegations that WF waived
arguments.
California Rules of Court, rule 8.124(b) provides that: “(3) An appendix must not:
(A) Contain documents or portions of documents filed in superior court that are
unnecessary for proper consideration of the issues; . . . (6) An appellant’s reply appendix
may contain any document that could have been included in the respondent’s appendix.”
Thus the filing of additional documents in a reply appendix is permissible. It is
clear that the documents in the 14-volume Reply Appendix could be useful to the court in
consideration of the appeal, since they all involve the motions for certification; however
as WF concedes, none of them are “necessary.” For these reasons we deny plaintiffs’
motion to strike and allow the filing of the additional appendices and decline to impose
sanctions.
b. WF’s corporate structure
At WF, loan officers, known as Home Mortgage Consultants (HMCs or loan
officers) were based in neighborhood branches. Each loan officer reported to a branch
manager. The branch managers were under the supervision of Area Managers, grouped
by geographic area. The Area Managers were under the supervision of the Regional
Managers.
c. The Loan Economics Program
Loan Economics was a computer program unveiled by WF in March 2002. It was
created to improve prices and to help loan officers achieve more volume and profitability.
To make a standard commission on a home mortgage loan, a loan officer would
have to charge one percent of the loan value (origination point) over WF’s daily loan rate.
This was referred to as “101 pricing.” If less than 101 pricing was charged (referred to as
“underage”), the loan officer’s commission would decrease. Anything higher than 101

4
pricing was termed “overage” and the loan officer would receive part of the overage
revenue as an additional commission.
Loan Economics allowed loan officers to charge less than 101 pricing without
suffering an underage penalty. Loan Economics also allowed loan officers to lower
prices if the loan officer’s loans in any given month exceeded a certain minimum level.
WF’s stated policy was that all home loans were to be priced using this tool. All
branch managers and loan officers in Los Angeles were supposed to be trained to use it to
assess the profitability of every loan.
d. The Lawsuit
The theory of plaintiffs’ lawsuit was that loan officers in the branches which were
located in so-called minority neighborhoods (as defined by census reports) were
prohibited from using the Loan Economics program by senior bank officials based solely
on the ethnic makeup or income level of the neighborhoods.
The plaintiffs named in the initial complaint applied for and obtained real estate
loans from WF through the Culver City branch, a “minority neighborhood branch.” The
complaint defined a minority neighborhood as “predominantly African American and
Hispanic.”
During the relevant time periods, the Culver City Branch Manager was Pam
Jackson. Her Area Manager (the South Los Angeles area) was Tom Swanson until 2003,
when he was elevated to Regional Manger. The South Los Angeles area was then
divided into two areas: West side (under Ken Vils) and East side (under Larry Garcia).
WF’s defense was that pricing a home loan was a highly subjective and
individualized process. It claimed that the Loan Economics program results in a
calculation showing whether the income expected from the loan meets the minimum
profitability thresholds for the loan officers. It argued there is no way to tell whether a
loan officer used the program by looking at the loan commission reports, that each loan
officer chooses how to price a loan and is subject to incentives and pressures and that
Loan Economics could be used at different times or not at all.

5
2. The Certification Motions
a. The First Motion
In April 2008, plaintiffs brought their first motion to certify a class. The motion
was based on declarations of attorneys attaching deposition testimony of witnesses.
Plaintiffs offered this definition of the class: All borrowers who: (1) obtained a
first trust deed-secured home loan from WF in an amount in excess of $150,000; (2)
applied for the loan through a WF branch that was located within Thomas Swanson’s
area, as that area was defined by WF in January 2002, and was either within or within
one mile from an area comprised of 50 percent or more minority population as
established by 2000 census data and (3) had a loan funded between May 1, 2002 and
December 2005.
This class differed from the class definition alleged in the original complaint.3
Plaintiffs roughly estimated the class as greater than 10,000 members based on WF’s
produced loan volume reports.
Plaintiffs contended the class was easily ascertainable through WF’s files and data
base, as reflected in the loan volume reports WF produced. They argued that the
questions common to the class were: (1) whether WF precluded certain branch managers
or loan officers from using the Loan Economics program; (2) whether Loan Economics
enabled the loan officers to give borrowers a lower price loan; (3) whether WF’s limiting
of the Loan Economics program had a disparate impact on minority borrowers; (4)
whether WF’s conduct was intentional discrimination; (5) whether WF’s limitation of the
Loan Economics program resulted in damages to the affected borrowers and (6) the
proper measure of damages and/or restitution.

3
The complaint defined the class as: all borrowers who obtained a first trust deed-
secured home loan from WF in an amount in excess of $150,000, who applied for the
loan through a WF branch office located in a minority neighborhood in the Los Angeles
area, and whose loan was not processed, prepared, originated and/or generated by or with
the use of the Loan Economics program.

6
 Plaintiffs framed the common issues of law by the causes of action in the
complaint. They contended the class damages were susceptible of proof, in particular,
the statutory damages pursuant to the Unruh Act, and argued that to the extent class
members may be required to establish individual damages, those individual issues did not
predominate over the common issues of law and fact. They alleged the representative
plaintiffs’ claims arose from the same discriminatory conduct by WF and were based on
the same legal theory. They argued the representative plaintiffs had strong identical
interests with the members of the class and they had an identical interest in recovering for
the losses that the other class members had sustained. They claimed the class
representatives would adequately represent the class because the named plaintiffs’
interests were not antagonistic to those of the class. They argued that class treatment was
the superior mechanism for managing this litigation because it was impractical to join all
members of the class in a single action and there was no alternative procedure which
would result in a uniform determination of liability and which would provide the class
members with the full extent of the relief to which they were entitled. They argued that if
the class was not certified, there would be a multiplicity of duplicative lawsuits which
would have conflicting decisions. Finally, they contended it was economically feasible
for the class members to pursue relief in a class action because the individual borrowers
would be forced to prove identical facts in successive trials, and might not have the
ability to obtain information about WF’s lending practices and would thus be unlikely to
discover the discrimination by WF.
Following the hearing on July 22, 2008, the parties submitted supplemental briefs
and the court took the matter under submission.
In August 2009, the court issued a written order certifying the class as to the
Unruh Act cause of action. Its order stated, inter alia, “Plaintiffs estimate that the class
consists of roughly 10,000 members. This number is sufficient to meet the numerosity
requirement. [¶] . . . The class is defined in terms of where an individual applied for a
loan, not where it was approved or processed. . . . . [¶] . . . Defendants’ reports list each
loan with its originator, who is usually a branch manager. From these records Plaintiffs

7
can locate and depose the various branch managers to identify which HMCs worked in
which locations. Only about 20 branch managers are involved. This is a reasonable
approach to identifying class members. [¶] Plaintiffs have carried their burden to
establish that the proposed class is ascertainable. [¶¶] Plaintiffs identify several common
questions of law and fact, chief among which is whether Defendants had a policy of
precluding certain branch managers/loan officers from pricing and closing loans with the
Program. Other common questions (according to Plaintiffs) include whether the Program
enabled loan officers to offer the borrower a lower-priced loan, whether Defendants’
alleged selective preclusion had a disparate impact on minority borrowers, whether
Defendants’ conduct constituted intentional discrimination, whether the policy damaged
the affected borrowers, and if so, what is the proper measure of damages. [¶] Some of
these common questions are not common at all. [¶¶] The issue of actual damages
requires individual inquiries that will swamp any issues that are common to the class, at
least with respect to those causes of action requiring a showing of actual damages. This
includes Plaintiffs’ CLRA, UCL, FEHA and breach of contract causes of action.
Therefore, the court DENIES Plaintiffs’ motion for class certification as it pertains to
these causes of action. [¶¶] The court finds that issues of liability under the Unruh Act in
this particular case are ripe for class treatment. The most significant issue—whether
Defendant[s] had a policy to deny access to the Loan Economics Program to HMCs in
minority communities—is common to all class members. [¶] Because statutory penalties
of at least $4,000 are mandatory under Section 52 once liability is established, there is no
need to wade into individual issues surrounding actual damages. This is only true,
however, if Plaintiffs restrict the class-wide relief to statutory damages and in their notice
inform class members that participation in the class waives any further rights to actual
damages. [¶¶] Plaintiffs have established that their Unruh Act claims are typical. . . .
Plaintiffs’ claims are typical because they are members of the communities at issue and
obtained home loans from Defendants during the relevant time period. Each loan was
processed through Isaac Brooks, who purportedly was not able to use the Program and
who worked out of offices in the relevant area. Plaintiffs’ claims arise from the same

8
alleged discriminatory conduct and proceed under the same legal theories. . . . [¶¶]
There is no question that Plaintiffs have asserted all claims that reasonably could be
expected to be raised by members of the class. Likewise, there is no evidence to suggest
that Plaintiffs’ interests are at odds with the remainder of the class. There is also no
evidence suggesting that Plaintiffs are mere puppets for class counsel. All of them truly
applied for home loans. Finally, class counsel have established their qualifications to
represent the class. . . . [¶¶] . . . [T]he court finds that class treatment is superior for the
Unruh Act cause of action. [¶] While class members may have an interest in controlling
their own litigation where disparate damages are involved, there is little need for
individual control where liability can be determined across the board as it can with
Plaintiffs’ Unruh Act cause of action. In addition, because damages are not an issue for
those willing to forgo actual damages, the risk of management difficulties is reduced.
There is no evidence of any litigation by individual class members already in progress
involving the same controversy, which means there is little risk of inconsistent rulings.
Finally, consolidating all claims in a single action before this court promotes judicial
economy.
b. Pre-trial Motion to Decertify
On September 10, 2010, shortly before trial, WF moved to decertify the class.
WF contended that plaintiffs could not show that common issues would
predominate over individual ones. It argued that the Unruh Act requires proof of injury
and causation, and that the plaintiffs would have to prove claims individually because
loan officers used Loan Economics in a variety of ways and the use of the Loan
Economics program did not necessarily result in a lower price.
The court denied the motion, stating it would allow the case go to trial and it
would revisit the issue thereafter.4

4
It stated, “Maybe this time an appellate court will look at the issue of what is
harm under the Unruh Act . . . . But at any event, it’s easier for me to unring the bell
than to ring the bell. . . . But I still have the ability to decertify this class if, as we get

9
 c. The Trial
At trial, Plaintiffs presented the testimony of several loan officers in the region
managed by Swanson who testified they never used Loan Economics because they were
never told about or trained on the program. Some testified they were affirmatively told
by Swanson or their branch manager not to use it. Some testified that if they moved to
other branches in non-minority or more affluent areas, they were allowed to and told to
use the program. Other WF employees testified Loan Economics was a cost-lowering
tool and that WF’s policy was to use it on every loan.
At trial, plaintiffs’ expert Jeffrey West testified. He was an economic consultant
who had experience creating demographic maps based on census information and had
performed statistical analyses on demographic data. He had reviewed the Loan Volume
Reports WF had provided to plaintiffs which showed all loans funded in the Los Angeles
area from 2002-2005. The report named loan officers and branch managers. There were
approximately 60,000 home loans over $150,000 funded in that period. WF also
produced reports on the race and ethnicity of the borrowers.
West created maps showing where more than 50 percent of the population was
African-American or Hispanic, based on census data. Using WF’s data, West identified
the branches which were within a one-mile radius of these minority areas and listed the
16 branch managers. He assumed all the branches in the minority areas were not using
the Loan Economics Program and came up with 7,348 loans and categorized them by
loan officer.

into trial, I realize I made a mistake. . . . I’ve got some real questions about whether this
is a class . . . but I’ll let this case go further as a class. . . . But I have got grave concerns
about the number of people in this class who may not experience any monetary loss
whatsoever or any monetary disadvantage whatsoever because of the failure to use Loan
Economics. . . .”

10
 Another plaintiffs’ expert, Dr. Snow, testified that class loans obtained by class
members on average, were priced 23 basis points higher than borrowers who were from
areas in which the Loan Economics program was used. He did not perform any analysis
on individual loans.
WF presented the testimony of some branch managers that loan officers were
allowed to use Loan Economics under certain circumstances and that the program did not
always offer the lowest price possible.
At the close of evidence, WF presented a verdict form which had seven questions
with subparts and two appendices. Appendix A was a list of loan officers. Appendix B
was a list of loans that was over 185 pages. It separated each loan into categories of
branch manager, loan originator, borrower’s race, loan amount, type of loan, total price
points and funding date.5

5
The form asked:

“1. Have the Plaintiffs proved by a preponderance of the evidence that, during
the period of May 2002 through December 2005, the Loan Economics tool was an
advantage, facility, privilege, or service provided by Wells Fargo to its borrowers?

“2. Have the Plaintiffs proved by a preponderance of the evidence that Wells
Fargo denied, discriminated, or made a distinction that denied full and equal advantages,
facilities, privileges or services to class members who obtained their loans from the Wells
Fargo branches managed by any of the branch managers listed in Appendix A?

“3. Have the Plaintiffs proved by a preponderance of the evidence that the class
members’ race, color, ancestry, or national origin was a motivating reason for Wells
Fargo’s conduct; or that the race, color, ancestry or national origin of a person whom the
class members were associated with was a motivating reason for Wells Fargo’s conduct?

“4. Have the Plaintiffs proved by a preponderance of the evidence that Wells
Fargo’s conduct was a substantial factor in causing harm to the following groups of class
members? [answer divided into loan priced above par versus fixed-price loans]

11
 Instead of WF’s form, the court used a modified version of plaintiffs’ special
verdict form which required the jury to find each element of the Unruh Act without any
connection to a particular loan, then required the jury to find the number of loans on
which WF was liable.
The verdict form asked five questions:
“1. Did Wells Fargo deny, discriminate or make a distinction that denied full and
equal advantages, facilities, privileges and/or services to Plaintiffs and the class they
represent?
“2. Was the race, color, ancestry, and/or national origin of the Plaintiffs and the
class they represent, or the race, color, ancestry, and/or national origin of persons whom
the Plaintiffs and the class they represent were associated with, a motivating reason for
Wells Fargo’s conduct?
“3. Was Wells Fargo’s conduct a substantial factor in causing harm to Plaintiffs
and the class they represent?

“5. For the branches that received a check mark on Appendix A for question 2,
have the Plaintiffs proved by a preponderance of the evidence that Wells Fargo’s conduct
was a substantial factor in causing harm to the members of the class who obtained their
loans from those branches. [¶] . . . [¶] If your answer to question 5 is yes, then proceed
to Appendix B and place a check mark next to each loan for which the borrower was
harmed. For this question, you should ignore the loans associated with any branch
manager that did not received a check mark for question 2. . . . .

“6. For the members of the class whose loans were originated during the class
period after October 28, 2004, did the Plaintiffs prove by a preponderance of evidence
that Wells Fargo denied, discriminated, or made a distinction among its customers that
denied full and equal advantages, facilities, privileges or services to class members?

“7. For the members of the class whose loans were originated during the class
period before July 1, 2002, did the Plaintiffs prove by a preponderance of evidence that
Wells Fargo denied, discriminated, or made a distinction among its customers that denied
full and equal advantages, facilities, privileges or services to class members?” (Original
underlining.)

12
 “4. Plaintiffs and the class they represent are entitled to damages on the following
total number of loans [fill in number of loans below]:
“5. Taking the total number of class loans you have found in answer to Question
4, and multiplying that total number of loans by the amount of $4,000 per loan, what is
the total amount of damages that you award to Plaintiffs and the class they represent?”
The jury answered the verdict by finding that Plaintiffs were entitled to damages
on 880 loans. All the parties and the court agreed it was impossible to identify which 880
loans were the basis of the jury’s verdict.
After the trial, plaintiffs moved for preliminary approval of a proposed plan of
redistribution under which the 7,348 victims would share the $3.52 million award.
d. Post-trial Motion
WF then moved to decertify the class in June 2011.
This post-trial motion to decertify contended that the proof presented at trial
demonstrated that plaintiffs could no longer sustain the prerequisites for class
certification. WF argued that answering the questions central to each plaintiff’s Unruh
Act claim required individualized scrutiny of each loan transaction. It claimed that the
jury needed to consider whether Loan Economics was used on each particular loan, and
whether the alleged failure to use Loan Economics raised the price on the borrowers’
loan.
The court denied this motion, stating, inter alia: “If we had submitted the
defendant’s verdict, we would have been giving the jury the world almanac. . . . [M]aybe
when we get down toward distribution, we’ll have some questions about who gets
money. Do we have to funnel the money to 880 borrowers or do we funnel the money to
the entire class? And does it make a difference to the defendants because if due process
is not violated, then the manner of distribution may not be that significant in terms of
grist for the defendants to complain. . . .”
Plaintiffs proposed distributing the award among all the 7,348 class members
because it could not be ascertained from the verdict who the 880 borrowers were. The
court approved this plan.

13
 DISCUSSION
1. The Unruh Act
The Unruh Civil Rights Act (the Unruh Act), codified in Civil Code section 51, et
seq., provides that “[a]ll persons within the jurisdiction of this state are free and equal,
and no matter what their sex, race, color, religion, ancestry, national origin, disability,
medical condition, marital status or sexual orientation are entitled to the full and equal
accommodations, advantages, facilities, privileges, or services in all business
establishments of every kind whatsoever.” Civil Code section 52, subdivision (a)
provides that anyone who violates the Act “is liable for each and every offense for the
actual damages, and any amount that may be determined by a jury, or a court sitting
without a jury, up to a maximum of three times the amount of actual damage but in no
case less than four thousand dollars ($4,000), and any attorney’s fees that may be
determined by the court in addition thereto, . . . .”
The Act must be construed liberally. (Angelucci v. Century Supper Club (2007)
41 Cal. 4th 160, 167 (Angelucci).)
2. Allegations of the Complaint
The cause of action for violation of the Unruh Act alleged that WF, a business
establishment, engaged in systemic and purposeful discriminatory home lending practices
by denying plaintiffs and the members of the proposed class full and equal advantages,
privileges and services when they obtained home financing from WF because: (1) they
are African-American, Hispanic and/or other minority, (2) they live and/or do business in
predominantly African-American and/or Hispanic neighborhoods and (3) they associate
with African-American and/or Hispanic spouses, neighbors and/or businesses.
3. Class Certification
The class action procedure, codified in Code of Civil Procedure section 382, rests
on considerations of necessity and convenience and was adopted to prevent a failure of
justice. (Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1078.) Code of Civil
Procedure section 382 authorizes class actions when the question is one of a common or

14
general interest, of many persons, or when the parties are numerous and it is
impracticable to bring them all before the court.
The community of interest requirement is determined by three factors: (1)
predominant common questions of law or fact; (2) class representatives with claims or
defenses typical of the class; and (3) class representatives who can adequately represent
the class. (Sav-On Drug Stores v. Superior Court (2004) 34 Cal.4th 391, 326.)
The party seeking class certification has the burden to establish the existence of:
(1) an ascertainable class and (2) a well-defined community of interest. (Washington
Mutual Bank v. Superior Court (2001) 24 Cal.4th 906, 913.)
A trial court ruling on a certification motion must determine whether the issues
which may be tried jointly are so numerous or substantial compared with those requiring
separate adjudication that the maintenance of a class action would be advantageous to the
litigants and to the judicial process. (Sav-On, supra, 34 Cal.4th at p. 326.) The decision
to certify a class or not is squarely within the trial court’s discretion. (Brinker Restaurant
v. Superior Court (2012) 53 Cal.4th 1004, 1021-1022; In re Tobacco II Cases (2009) 46
Cal.4th 298, 311.) “‘Because trial courts are ideally situated to evaluate the efficiencies
and practicalities of permitting group action, they are afforded great discretion in granting
or denying certification.’” (Sav-On, supra, 34 Cal.4th at pp. 325-326.)
“In conducting this analysis, a court must examine the allegations of the complaint
and supporting declarations [citation] and consider whether the legal and factual issues
they present are such that their resolution in a single class proceeding would be both
desirable and feasible. ‘As a general rule, if the defendant’s liability can be determined
by facts common to all members of the class, a class will be certified even if the members
must individually prove their damages.’” (Brinker, supra, 53 Cal.4th at pp. 1021-1022.)
Class certification is properly denied when the proposed definition of the class is
overbroad and the plaintiff offers no means by which only those class members who have
claims can be identified from those who should not be included in the class. (Miller v.
Bank of America (2013) 213 Cal.App.4th 1, 7.)

15
 On review of a class certification order, we afford the trial court’s decision great
deference on appeal, reversing only for a manifest abuse of discretion. A certification
order generally will not be disturbed unless (1) it is unsupported by substantial evidence,
(2) relies on improper criteria, or (3) rests on erroneous legal assumptions. (Ayala v.
Antelope Valley (2014) 59 Cal.4th 522, 530; Fireside Bank, supra, 40 Cal.4th at p. 1089.)
In reviewing the certification order, we presume the existence of every fact the
trial court could reasonably deduce from the record. (Sav-On, supra, 34 Cal.4th at p.
326.) When a certification order turns on inferences to be drawn from the facts, we have
no authority to substitute our decision for that of the trial court. (Id. at p. 328; Davis-
Miller v. Automobile Club of Southern California (2011) 201 Cal.App.4th 106, 120.) We
review only the reasons given by the trial court for its ruling and ignore any other
grounds that might support denial. Any valid pertinent reason stated for the certification
order will be sufficient to upheld the order. (Sav-On, supra, 34 Cal. 4th at pp. 326-327;
Ramirez v. Balboa (2013) 215 Cal.App.4th 765, 776-777.)
We also consider whether the theory of recovery advanced by the proponents of
certification is, as an analytical matter, likely to prove amenable to class treatment.
(Sav-On, supra, 34 Cal.4th at p. 339.) The court should not focus on the merits of the
case unless necessary. (Ayala, supra, 59 Cal.4th at p. 537.) When issues affecting the
merits of the case overlap with the propriety of class certification, a court may inquire
into the case’s merits. (Brinker, supra, 53 Cal.4th at pp. 1023-1024.)
Decertification motions are reviewed according to the same standards, that is a
question of whether the class action proceeding is appropriate and whether the trial court
abused its discretion in ruling on the motion. (Walsh v. Ikon Office Solutions (2007) 148
Cal.App.4th 1440, 1451; Grogan-Beall v. Ferdinand Roten Galleries (1982) 133
Cal.App.3d 969, 977.)
4. Contentions on Appeal
WF contends on appeal that the superior court wrongly assumed that there was no
need to prove actual damages in order to have an Unruh Act statutory penalty imposed,
and thus the motion to certify the class should have been denied.

16
 WF then makes the related contention that the price discrimination theory of
liability required plaintiffs to show that each class member overpaid for his or her loan in
order to establish injury and thus class certification was not appropriate.
Next it contends that the court erred in denying the subsequent motions to
decertify because it allowed the plaintiffs to prove their injury with averages rather than
direct evidence of overpayment, and thus abridged WF’s due process rights by permitting
a class containing non-claimants to go to trial.
Finally it contends that the court erred in denying WF’s motion for a special
verdict form that would have aided the jury in identifying which loans proved harm and
causation.
Because WF objects to three rulings, all of which concern the right of plaintiffs to
proceed as a class, we address the certification question as a whole and not as to each
individual ruling, except as to the due process and distribution issues.
The underlying premise of all WF’s contentions on appeal hinges on the legal
elements of an Unruh Act cause of action. WF contended before trial, during trial and
after trial that plaintiffs had to show that a borrower at a minority branch received less
favorable loan treatment because of the loan officer’s failure to use the Loan Economics
program. Thus, they argue, if it can be shown that a borrower was offered the same
interest rate without the Loan Economics program as he or she would have been offered
when using the program, there would be no injury or damages, and the borrower could
not be considered a member of the class. It argues that because of the necessity of
individualized inquiry class treatment was not an appropriate method of trying this case.
We therefore first address the Unruh Act requirements.
5. Elements of an Unruh Act Claim
Plaintiffs elected to proceed under the statutory penalty prong of the Unruh Act,
that is, those who violate the Act are liable for “actual damages, and any amount that
maybe determined by a jury. . . up to a maximum of three times the amount of actual
damage but in no case less than four thousand dollars ($4,000) . . . .”

17
 What plaintiffs claim and the trial court found, is that there was no need to
establish whether the individual claimants received less favorable loan terms because the
injury consisted of the denial of the use of the program to minority branch applicants, and
was not measured by the cost of the loan. The trial court and plaintiffs relied primarily
on Koire v. Metro Car Wash (1985) 40 Cal.3d 24 (Koire) and Angelucci, supra, 41
Cal.4th 160.
WF contends plaintiffs have no standing to bring an Unruh Act claim because they
were not denied loans and could not prove damages because they did not show they
received less favorable terms than applicants at other branches which used the Loan
Economics program.
In Koire, supra, 40 Cal.3d 24, a male visited car washes and bars on days during
which discounts were offered to females. He asked to be charged the same price as a
female would be charged and was refused. (Id. at p. 27.) After he filed a lawsuit against
the businesses based on the Unruh Act, the trial court granted judgment in favor of the
defendants. The California Supreme Court found the Unruh Act applied to gender-based
price discounts. In response to the defendants’ argument that the plaintiff was not injured
by the price discounts, the court found: (1) the Unruh Act provides that arbitrary sex
discrimination is per se injurious regardless of the plaintiff’s actual damages (id. at p. 33);
and (2) the plaintiff was adversely affected by the price discounts because he had to pay a
higher price and because the price differential made him feel he was being treated
unfairly (id. at p. 34).
Several years later, in Angelucci, supra, 41 Cal.4th 160, four men filed a
complaint against a supper club which charged lower prices to females. The trial court
granted judgment on the pleadings in favor of the club. (Id. at p. 165.) The Supreme
Court reversed the judgment. In doing so, it specifically rejected the club’s assertion that
Koire required plaintiffs in an Unruh Act price discrimination case to allege that they
demanded equal treatment and were refused. The court found no language in the Unruh
Act which requires the plaintiff to demand and be refused equal treatment. It explained
Koire’s holding that the plaintiffs were injured when they presented themselves for

18
admission and were charged the nondiscounted price (id. at p. 173) and that injury occurs
when the discriminatory policy is applied to the plaintiff. (Id. at p. 175.)
The court then discussed the rules of standing and concluded that under the Unruh
Act, a plaintiff has standing when he or she alleges injury or “has been the victim of the
defendant’s discriminatory act” (id. at p. 175) or an “‘invasion of legally protected
interests.’” It found that the Unruh Act does not require plaintiffs to express their request
for a discounted price in order to state a cause of action. (Id. at p. 180.)
WF relies on two cases decided subsequent to Angelucci for their contention that
plaintiffs have no standing to bring an Unruh Act cause of action.
In Surrey v. TrueBeginnings (2009) 168 Cal.App.4th 414, the court of appeal
addressed the standing of a male plaintiff who visited a dating services website with the
intent of utilizing its services, but after discovering that women were offered free
enrollment, did not subscribe or pay to enroll. (Id. at p. 416.) The court found that
because the plaintiff “did not attempt to or actually subscribe” to the services, he did not
suffer discrimination and therefore lacked standing under the Unruh Act or the Gender
Tax Repeal Act. (Id. at p. 420.)
In Reycraft v. Lee (2009) 177 Cal.App.4th 1211, a disabled person, who was a
guest of a mobile home park tenant, sued the owners and operators of the park’s
swimming pool because of its lack of a lift to allow her to access the pool. (Id. at pp.
1215-1216.) The court of appeal reviewed the standing issues raised in Angelucci and
TrueBeginnings (id. at pp. 1220-1221) as well as other cases, and concluded that standing
under the Disabled Persons Act (Civil Code section 54.3) is established when a plaintiff
“actually presented himself or herself to a business or public place with the intent of
purchasing its products or utilizing its services in the manner in which those products
and/or services are typically offered to the public and was actually denied equal access on
a particular occasion. If, as in Angelucci, the business or public place does not allow
admittance without a fee, a disabled plaintiff would need to show he or she presented
himself or herself to the business or public place intending to patronize it and to pay the
admission fee to gain admittance. . . .” (Id. at p. 1224.) Because the plaintiff was not

19
properly registered to use the pool as a guest or a tenant of the park, the court ruled she
was not actually denied access and the trial court’s ruling that plaintiff did not have
standing was affirmed. (Id. at pp. 1227-1228.)
The question presented in True Beginnings and Reycraft of whether the plaintiff
actually attempted to or actually subscribed to the services is not dispositive here, as all
the plaintiffs in this case actually applied to WF for home loans and received them. The
process of applying for loans was the equivalent of participation in a service offered to
the public. Angelucci makes it clear the plaintiffs were not required to demand equal
services, nor did they have to allege that after their demand, they were refused.
Here, the plaintiffs had standing to claim discrimination because they presented
themselves to the bank and received a home loan. This is not a denial of service case as
in Reycraft because they received loans. Moreover, in Reycraft, the plaintiff was not one
of the group intended to use the pool since she was not a member of the trailer park and
was not utilizing its services in the manner in which the services were offered. (Reycraft
v. Lee, supra, 177 Cal.App.4th at pp. 1224-1225.) In this case, the class members did not
include those who applied for loans from the minority branches but were turned down, or
those who were offered loans, but elected not to seek financing through WF. The
“service” was the granting of the loan, not the use of the Loan Economics tool. The
plaintiffs received different information about the pricing of loans, but were still granted
the loans. Thus, the plaintiffs actually presented themselves and did not receive equal
treatment from WF and had standing to bring an Unruh Act claim.
As a corollary to the standing argument, WF argues that plaintiffs cannot establish
damages under the Unruh Act unless they can show they received less favorable loan
terms than those who were offered use of the Loan Economics program. WF contends
that if the plaintiffs received loans at terms more favorable than that which they would
have received had the LE Program been utilized, there was no damage.
We disagree. According to Angelucci, the injury occurred when the
discriminatory policy was applied. Although Angelucci involved a judgment on the
pleadings, it concluded that plaintiffs were injured within the meaning of the Unruh Act

20
“when they presented themselves for admission and were charged the nondiscounted
price.” (Angelucci, supra, 41 Cal.4th at p. 173.) It cited Koire, which interpreted the
Unruh Act as “broadly condemning any business establishment’s policy of gender-based
price discounts” and its determination that “injury occurs when the discriminatory policy
is applied to the plaintiff.” (Angelucci, supra, 41 Cal.4th at p. 175.)
In Botosan v. McNalley (9th Cir. 2000) 216 F.3d 827, a disabled person attempted
to patronize a real estate office but found no handicapped parking. The consumer sued
the property owners and the lessee real estate company under the Americans with
Disabilities Act and the Unruh Act. The Ninth Circuit upheld the district court’s finding
that the consumer could recover Unruh Act statutory damages without proving that it was
impossible to enter the office. He only had to prove he attempted to become a customer
and was deterred. The Ninth Circuit held: “[P]roof of actual damages is not a
prerequisite to recovery of statutory minimum damages.” (Id. at p. 835.)
Here, it is the application of the financial policy that is the evidence of
discrimination. Plaintiffs were treated differently merely because of the geographic
location of the branch they visited. It is not the type of loan they received, nor the
financial impact of the failure to use Loan Economics which constituted discrimination.
WF also attempts to rely on the California Judicial Council’s jury instruction
regarding Unruh Act violations which required proof of harm. The instruction the jury
was given was based on former CACI No. 3020 (now CACI No. 3060) which provided
that plaintiffs must prove (1) WF discriminated or made a distinction that denied full and
equal accommodations/advantages/facilities/privileges/services to each plaintiff; (2) that
a motivating reason for WF’s conduct was plaintiffs’ race/color/ancestry/national origin;
(3) that plaintiffs in the class they represent were harmed; and (4) that WF’s conduct was
a substantial factor in causing harm to the class they represent.
The Judicial Council approved revised Directions for Use to this instruction in
June 2012 and again in 2013. The revised Directions for Use now provide: “Note that the
jury may award a successful plaintiff up to three times actual damages but not less than
$4,000 regardless of any actual damages. (Civ. Code, § 52(a).) In this regard, harm is

21
presumed, and elements 3 and 4 may be considered as established if no actual damages
are sought. [Citing Koire, supra, 40 Cal.3d at p. 33.]”
WF argues in its reply brief that the revised Directions for Use do not undermine
its argument because the CACI instruction is not legal authority, and that the revision
which was promulgated more than a year after the trial ended should not retroactively
affect the class certification ruling. In addition, WF argues that even despite the use
directions, there still must be an adverse action which is causally linked to the
discriminatory intent.
WF contends that a plaintiff who is not injured as a result of a defendant’s actions
cannot suffer. It cites Angelucci and subsequent cases for the proposition that plaintiff
must actually show injury from the discriminatory conduct and contends that pursuant to
this “settled law” CACI lists the essential elements to an Unruh Act claim. It argues the
trial court erred by holding that the class could recover only by proving policy, and not
requiring a showing of an external effect (injury) caused by the policy.
We disagree with WF’s contentions. As Angelucci explains, it is the application
of the discriminatory policy, not the actual damages, which results in an Unruh Act
injury. (Angelucci, supra, 41 Cal.4th at p. 175.)
6. Was the class properly certified?
a. Ascertainable Class
Whether a class is ascertainable is determined by examining the class definition,
the size of the class and whether the members may be readily identified without
unreasonable expense or time. (Thompson v. Auto Club of Southern California (2013)
217 Cal.App.4th 719, 728.)
Ascertainment of class members in this case is fairly simple. The members of the
class would be those who received a home loan from what would be considered a
minority branch of WF. This information was available from WF’s records. The size of
this class would be large, but manageable, since the number of WF branches involved
was relatively small. Only those customers who received loans, not all those who applied
for financing, were included in the class. The inquiry of whether or not borrowers were

22
offered the Loan Economics program would not have to be resolved on an individual
basis because the loan officers involved testified that at certain branches they did not
offer or use the program at all.
b. Community of interest
In order to determine whether the class members have a community of interest, we
look to the three factors enunciated in Sav-On: predominant common questions of law
and fact, typicality of claims or defenses, and representatives who can adequately
represent the class. (Sav-On, supra, 34 Cal.4th at p. 326.) Of these class members, their
common interests would be defined by their treatment by WF (denial of use of Loan
Economics program) based upon the fact that they were applying through a minority
branch.
(1) Predominant common questions of law or fact
In determining whether there are predominant common questions of law or fact,
we examine whether the theory of recovery advanced by the plaintiffs is likely to prove
amenable to class treatment. We examine the allegations of the complaint and supporting
declarations and consider whether the resolution of the legal and factual issues presented
would best be resolved by class treatment. (Brinker, supra, 53 Cal.4th at pp. 1022-1023.)
If liability can be determined by facts common to all members of the class,
certification is in order even if the class members must individually prove their damages.
(Brinker, supra, 53 Cal.4th at p. 1022.)
The complaint alleged that the plaintiffs each resided in minority neighborhoods
and applied for real estate loans from WF through a minority neighborhood branch. It set
forth allegations regarding the use of the Loan Economics program, alleging that loan
officers operating out of the minority neighborhood branches did not use the Loan
Economics Program. It defined the class members as all borrowers who obtained a first
trust deed-secured home loan from WF in an amount in excess of $150,000, who applied
for a loan through a WF branch located in a minority neighborhood in Los Angeles and
whose loan was not processed or prepared with the use of the Loan Economics Program.
It listed 18 common questions of law and fact, including whether there were disparities

23
between charges, fees and/or rates imposed on minority neighborhood borrowers and
non-minority neighborhood borrowers of equal credit risk and credit worthiness; whether
these disparities demonstrate that WF intentionally discriminated against the plaintiffs
based on race, color, ancestry, and/or national origin; whether the disparities can be
explained or justified by a legitimate non-ethnic and/or non-racial factor; and whether the
Loan Economics program created lower priced loans for WF customers.
Claims that a uniform policy was consistently applied to a group are proper for
class treatment. (See Lopez v. Brown (2013) 217 Cal.App.4th 1114, 1127.)
The theory advanced by plaintiffs was that the policy was applied to those in a
certain geographic area, which was in turn defined by its racial makeup. Plaintiffs
alleged the policy was not individualized according to credit history, type of home to be
purchased or the amount of the borrower’s assets. They argued this policy violates the
law because it was based on race and geography. Each of the plaintiffs asserted
discrimination for the same policy and thus common questions of law and fact were
present in this case.
We conclude the allegations of the complaint and the theory of recovery advanced
by the plaintiffs make the case amenable to class treatment.
(2) Class representatives with typical claims or defenses
Part of the community of interest requirement is a showing that the plaintiffs’
claims are typical of the class. The right of each class member to recover may not be
based on a separate set of facts only applicable to that individual. (Vasquez v. Superior
Court (1971) 4 Cal.3d 800, 809.) As long as every member of the alleged class would
not be required to litigate numerous and substantial questions to determine his or her right
to recover, class treatment is proper. (Ibid.)
The named plaintiffs all alleged that they applied for home loans at a minority
neighborhood branch and were not given the opportunity to see or use the Loan
Economics program. None of them had any unique claims which would require
adjudication outside of the statutory Unruh Act violation. Plaintiffs, like all prospective
class members, were subject to and affected by WF’s discriminatory policy. The

24
members have the same or similar injury due to the same conduct, and the action is based
on conduct which is not unique to the named plaintiffs. We conclude the named
plaintiffs had claims and defenses typical of the class.
(3) Class representatives who can adequately represent the class
To maintain a class action, the representative plaintiff must adequately represent
and protect the interests of other members of the class. (City of San Jose v. Superior
Court (1974) 12 Cal.3d 447, 463 (City of San Jose).) The adequacy of class
representatives is not at issue here. In any case, there were no allegations of conflicts of
interest between the plaintiffs and class members, nor was there any question raised about
whether plaintiffs and their counsel would prosecute the action vigorously on behalf of
the class.
c. Are there more issues which may be jointly tried than issues which require
separate adjudication?
It must be shown that substantial benefits to both the litigants and the court will
result from class treatment. (City of San Jose, supra, 12 Cal.3d at p. 460.) Although the
terms of a loan are dependent on a variety of factors, i.e., the borrower’s credit history,
assets, the amount of down payment, the property’s value, etc., here, the single unifying
factor would be the treatment of minority branch patrons and not the actual pricing of the
loan. WF’s denial of a program which was available to everyone else except for those
borrowers from minority branches is the harm; whether plaintiffs could have received
more favorable loan terms is not.
If there were no class treatment, each individual plaintiff would have to bring in
the same witnesses in every case to demonstrate WF’s policy and the administration of its
Loan Economics program. These individual actions would be an inefficient use of court
resources and could result in inconsistent damage awards. The class action procedure is
therefore a superior mechanism for a fair and efficient adjudication of plaintiffs’ claims.
d. Conclusion
The trial judge understood the facts and used the appropriate criteria for
determining whether class treatment was appropriate. The court examined the theory of

25
recovery, assessed the nature of the legal and factual disputes likely to be presented and
decided that common issues predominated. There was no abuse of discretion in granting
the motion for class certification and later denying the two motions for decertification.
7. Violation of WF’s due process rights
In its post-trial motion to decertify, WF contends the court erred by: (1) allowing
proof by testimony about averages rather than by direct evidence of overpayment; (2) not
allowing the use of its proposed verdict form; (3) using another verdict form which
allowed non-claimants to recover and as a result there was no way to properly distribute
the award.
WF claims its due process rights were violated by class treatment because there
were non-claimants in the class (those who were not “injured” because they suffered no
monetary loss) but who were included in the calculation of statutory damages of $4,000
per loan and thus their presence in the class increased the total amount of damages.
WF contends there was therefore no evidence of how many class members were
injured, so the computation of the total judgment was affected. The verdict form which
was given did not refer to specific loans but asked the jury to find a certain number of
loans. Because the number the jury found was not tied to any branch or branch manager
WF contends that no one can prove any direct harm to any particular group of borrowers.
WF admits that its verdict form would have overwhelmed the jurors in its size and
detail, but argues that the size and detail of information necessary proves class treatment
was inappropriate.
The cases cited by WF, Collins v. Safeway (1986) 87 Cal.App.3d 62 and City of
San Jose, supra, 12 Cal.3d at page 447 are distinguishable. In Collins, supra, plaintiffs
sought to recover from a grocery store chain for eggs contaminated by a chemical
ingredient. It was not known which eggs were contaminated. The court held it was
impossible to ascertain which plaintiffs were actually harmed and thus class treatment
was inappropriate. (Collins v. Safeway, supra, 87 Cal.App.3d at p. 71.)
In City of San Jose, supra, 12 Cal.3d at page 447, plaintiffs sought to recover from
a city for excessive noise and pollution from a municipal airport. The court found each

26
claimant in the proposed class was damaged in different ways because of the individual
geography, character and use of their properties and no class could be certified. (Id. at p.
461.)
Here, each class member was harmed in the same manner due to the same policy
of discrimination. The members of the class were determined by WF’s records of
borrowers. Although it was not possible to identify specifically the 880 loans which were
found to have violated the Unruh Act, the jury made the finding based on the evidence of
the possible class members, which was produced by WF. WF’s due process claims have
no merit.
8. Distribution Plan
After judgment was entered, plaintiffs submitted a proposed plan of distribution.
The plan provided that the $3.52 million verdict would be divided evenly among the class
members who come forward. Plaintiffs conceded that it would be impossible to
determine which 880 class members should recover.
WF contends that because it was impossible to determine which claimants should
recover, class treatment was improperly certified. However, because the distribution
plan was not proposed until after the verdict was entered, it does not affect the ruling on
the certification motions. (Bell v. Farmers Insurance (2001)115 Cal.App.4th 715, 759.)
DISPOSITION
The judgment is affirmed. Plaintiffs are to recover costs on appeal.

WOODS, J.

We concur:

PERLUSS, P. J. ZELON, J.

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