A summary of Southern California-related business litigation developments during the past week.

Adjustable-Rate Mortgage Dispute: The Federal National Mortgage Assn. was sued by Evanston Insurance Co. on claims that FNMA was negligent in approving an adjustable-rate mortgage note that was defective. The breach-of-contract suit, filed in Los Angeles Superior Court, claims that Guild Mortgage Co. created a draft note form that used a defective index to calculate the index rate. Borrowers signed the notes and eventually filed and settled a class-action suit when they learned that they were paying too much interest on their mortgages. Seeking unstated damages, the Superior Court suit said Evanston, which insured Guild, paid more than $1 million in defending and settling the class-action suit. (Filed July 9, 1990. Case No. BC005247)