North America Savings & Loan Assn. in Santa Ana, staggered by nearly $9 million in losses last year, was declared insolvent and seized Friday by state regulators. The takeover occurred about 9 1/2 hours after its owner, Westminster dentist Duayne D. Christensen, was killed when his speeding 1985 Jaguar smashed into a freeway piling.
William J. Crawford, the state's S&L commissioner, said the decision to proceed with the takeover was made and set in motion before his office learned about the death of Christensen, a 56-year-old dentist who lived in Newport Beach and practiced in Westminster.
The S&L--the first in California to be closed this year and the sixth in Orange County to fail since 1985--will reopen Monday under a conservatorship operated by the state Department of Savings and Loan. All deposits up to $100,000 per account are insured, Crawford said.
All of the S&L's employees, including President Brooks A. Miller, will be retained for the present, Crawford said, and William Davis, Crawford's chief deputy, will act as the conservator and will oversee daily operations.
Crawford's decision to place North America S&L in conservatorship is believed to be the first such action by a state commissioner in 35 years. Until Friday, it had always acted in concert with federal regulators, who actually seized the S&Ls.
The state's action is part of a "get tough" policy that Crawford has been warning industry leaders about since last summer, said Gary Findley, a Brea lawyer who handles financial institutions.
"He has made it clear to us that he is going to take a much more active role in supervision of S&Ls, including the use of conservatorships," Findley said. "We're happy to see it."
Christensen, who reportedly worked through the night Thursday to come up with a plan to satisfy regulators and attempt to prevent the takeover, was killed about 6:30 Friday morning when he missed a curve while driving northbound at 70 to 75 m.p.h. on the Corona del Mar Freeway. His car traveled 400 feet down the center divider before smashing into an abutment at the Bristol Street overpass, according to the California Highway Patrol.
Christensen was killed on impact, said Bruce Lyle, an Orange County coroner's investigator. California Highway Patrol Officer Paul Caldwell said he was not wearing a seat belt. The coroner's office, which was aware of the circumstances of the takeover of the S&L, said the death was accidental.
Lyle said that Christensen, who had coronary artery problems and had a heart attack a year ago, could have fallen asleep at the wheel or had another heart attack.
"What ruled out suicide is that he doesn't really fit the bill," Lyle said. "He was working all night in order to resolve this financial difficulty. . . . He was really stressed for the past week. With a traffic accident it's extremely hard" to deduce suicide. "In this sort of instance where there are no skid marks--apparently he didn't brake--you immediately think that. But you need some sort of evidence to back it up."
Christensen "never threatened suicide, never talked about it," Lyle said. "His business manager was extremely surprised. Everyone else concerned--close friends--were extremely surprised."
To shore up his sagging institution, Christensen was under orders from the state regulatory agency to raise $7 million in capital and had not been able to come up with the cash, Crawford said. The state agency determined that North America Savings had lost $8.9 million in the first 11 months of 1986 and had a negative net worth of $1.5 million by the end of November.
Crawford was unable Friday night to provide information about the total value of the S&L's deposits, the number of customers or the amount of deposits in accounts exceeding the $100,000 insurance limit.
Crawford said that ever since he became commissioner in February, 1985, his office had been wrestling with Christensen over the S&L's assets because of bad loans. He said there was no single problem but there were concerns with the S&L's loan portfolio and investments overall. The primary problem, he said, was that many real estate developers and operators simply failed to pay back loans.
About two dozen of the state agency's employees will be working through the weekend to determine the financial condition of the S&L, which opened in Huntington Beach in September, 1983, and moved to its new four-story black glass headquarters building in Santa Ana in 1985.
Christensen, who had been a dentist in Orange County for 28 years, rarely had visited his dental office in recent months, said Gail Botts, his office manager. She said she last saw him around Christmas and said "he was in great spirits" at the time and "had really slimmed down."
"I worked for him for a long time,and he was a wonderful employer," said Botts, who described Christensen as a "very private man."
She said Friday that she had been trying to notify Christensen's three grown children and former wife of his death.
Times staff writers Robert Hanley and Leonel Sanchez contributed to this report.