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California Commercial Code Section 9604

Legal Research Home > California Laws > Commercial Code > California Commercial Code Section 9604

9604.  (a) If an obligation secured by a security interest in
personal property or fixtures is also secured by an interest in real
property or an estate therein:
   (1) The secured party may do any of the following:
   (A) Proceed, in any sequence, (i) in accordance with the secured
party's rights and remedies in respect of real property as to the
real property security, and (ii) in accordance with this chapter as
to the personal property or fixtures.
   (B) Proceed in any sequence, as to both, some, or all of the real
property and some or all of the personal property or fixtures in
accordance with the secured party's rights and remedies in respect of
the real property, by including the portion of the personal property
or fixtures selected by the secured party in the judicial or
nonjudicial foreclosure of the real property in accordance with the
procedures applicable to real property. In proceeding under this
subparagraph, (i) no provision of this chapter other than this
subparagraph, subparagraph (C) of paragraph (4), and paragraphs (7)
and (8) shall apply to any aspect of the foreclosure; (ii) a power of
sale under the deed of trust or mortgage shall be exercisable with
respect to both the real property and the personal property or
fixtures being sold; and (iii) the sale may be conducted by the
mortgagee under the mortgage or by the trustee under the deed of
trust. The secured party shall not be deemed to have elected
irrevocably to proceed as to both real property and personal property
or fixtures as provided in this subparagraph with respect to any
particular property, unless and until that particular property
actually has been disposed of pursuant to a unified sale (judicial or
nonjudicial) conducted in accordance with the procedures applicable
to real property, and then only as to the property so sold.
   (C) Proceed, in any sequence, as to part of the personal property
or fixtures as provided in subparagraph (A), and as to other of the
personal property or fixtures as provided in subparagraph (B).
   (2) (A) Except as otherwise provided in paragraph (3), provisions
and limitations of any law respecting real property and obligations
secured by an interest in real property or an estate therein,
including, but not limited to, Section 726 of the Code of Civil
Procedure, provisions regarding acceleration or reinstatement of
obligations secured by an interest in real property or an estate
therein, prohibitions against deficiency judgments, limitations on
deficiency judgments based on the value of the collateral,
limitations on the right to proceed as to collateral, and
requirements that a creditor resort either first or at all to its
security, do not in any way apply to either (i) any personal property
or fixtures other than personal property or fixtures as to which the
secured party has proceeded or is proceeding under subparagraph (B)
of paragraph (1), or (ii) the obligation.
   (B) Pursuant to, but without limiting subparagraph (A), in the
event that an obligation secured by personal property or fixtures
would otherwise become unenforceable by reason of Section 726 of the
Code of Civil Procedure or any requirement that a creditor resort
first to its security, then, notwithstanding that section or any
similar requirement, the obligation shall nevertheless remain
enforceable to the full extent necessary to permit a secured party to
proceed against personal property or fixtures securing the
obligation in accordance with the secured party's rights and remedies
as permitted under this chapter.
   (3) (A) Paragraph (2) does not limit the application of Section
580b of the Code of Civil Procedure.
   (B) If the secured party commences an action, as defined in
Section 22 of the Code of Civil Procedure, and the action seeks a
monetary judgment on the debt, paragraph (2) does not prevent the
assertion by the debtor or an obligor of any right to require the
inclusion in the action of any interest in real property or an estate
therein securing the debt. If a monetary judgment on the debt is
entered in the action, paragraph (2) does not prevent the assertion
by the debtor or an obligor of the subsequent unenforceability of the
encumbrance on any interest in real property or an estate therein
securing the debt and not included in the action.
   (C) Nothing in paragraph (2) shall be construed to excuse
compliance with Section 2924c of the Civil Code as a prerequisite to
the sale of real property, but that section has no application to the
right of a secured party to proceed as to personal property or
fixtures except, and then only to the extent that, the secured party
is proceeding as to personal property or fixtures in a unified sale
as provided in subparagraph (B) of paragraph (1).
   (D) Paragraph (2) does not deprive the debtor of the protection of
Section 580d of the Code of Civil Procedure against a deficiency
judgment following a sale of the real property collateral pursuant to
a power of sale in a deed of trust or mortgage.
   (E) Paragraph (2) shall not affect, nor shall it determine the
applicability or inapplicability of, any law respecting real property
or obligations secured in whole or in part by real property with
respect to a loan or a credit sale made to any individual primarily
for personal, family, or household purposes.
   (F) Paragraph (2) does not deprive the debtor or an obligor of the
protection of Section 580a of the Code of Civil Procedure following
a sale of real property collateral.
   (G) If the secured party violates any statute or rule of law that
requires a creditor who holds an obligation secured by an interest in
real property or an estate therein to resort first to its security
before resorting to any property of the debtor that does not secure
the obligation, paragraph (2) does not prevent the assertion by the
debtor or an obligor of any right to require correction of the
violation, any right of the secured party to correct the violation,
or the assertion by the debtor or an obligor of the subsequent
unenforceability of the encumbrance on any interest in real property
or an estate therein securing the obligation, or the assertion by the
debtor or an obligor of the subsequent unenforceability of the
obligation except to the extent that the obligation is preserved by
subparagraph (B) of paragraph (2).
   (4) If the secured party realizes proceeds from the disposition of
collateral that is personal property or fixtures, the following
provisions shall apply:
   (A) The disposition of the collateral, the realization of the
proceeds, the application of the proceeds, or any one or more of the
foregoing shall not operate to cure any nonmonetary default.
   (B) The disposition of the collateral, the realization of the
proceeds, the application of the proceeds, or any one or more of the
foregoing shall not operate to cure any monetary default (although
the application of the proceeds shall, to the extent of those
proceeds, satisfy the secured obligation) so as to affect in any way
the secured party's rights and remedies under this chapter with
respect to any remaining personal property or fixtures collateral.
   (C) All proceeds so realized shall be applied by the secured party
to the secured obligation in accordance with the agreement of the
parties and applicable law.
   (5) An action by the secured party utilizing any available
judicial procedure shall in no way be affected by omission of a
prayer for a monetary judgment on the debt. Notwithstanding Section
726 of the Code of Civil Procedure, any prohibition against splitting
causes of action or any other statute or rule of law, a judicial
action which neither seeks nor results in a monetary judgment on the
debt shall not preclude a subsequent action seeking a monetary
judgment on the debt or any other relief.
   (6) As used in this subdivision, "monetary judgment on the debt"
means a judgment for the recovery from the debtor of all or part of
the principal amount of the secured obligation, including, for
purposes of this subdivision, contractual interest thereon. "Monetary
judgment on the debt" does not include a judgment which provides
only for other relief (whether or not that other relief is secured by
the collateral), such as one or more forms of nonmonetary relief,
and monetary relief ancillary to any of the foregoing, such as
attorneys' fees and costs incurred in seeking the relief.
   (7) If a secured party fails to comply with the procedures
applicable to real property in proceeding as to both real and
personal property under subparagraph (B) of paragraph (1), a
purchaser for value of any interest in the real property at judicial
or nonjudicial foreclosure proceedings conducted pursuant to
subparagraph (B) of paragraph (1) takes that interest free from any
claim or interest of another person, or any defect in title, based
upon that noncompliance, unless:
   (A) The purchaser is the secured party and the failure to comply
with this chapter occurred other than in good faith; or
   (B) The purchaser is other than the secured party and at the time
of sale of the real property at that foreclosure the purchaser had
knowledge of the failure to comply with this chapter and that the
noncompliance occurred other than in good faith.
   Even if the purchaser at the foreclosure sale does not take his or
her interest free of claims, interests, or title defects based upon
that noncompliance with this chapter, a subsequent purchaser for
value who acquires an interest in that real property from the
purchaser at that foreclosure takes that interest free from any claim
or interest of another person, or any defect in title, based upon
that noncompliance, unless at the time of acquiring the interest the
subsequent purchaser has knowledge of the failure to comply with this
chapter and that the noncompliance occurred other than in good
faith.
   (8) If a secured party proceeds by way of a unified sale under
subparagraph (B) of paragraph (1), then, for purposes of applying
Section 580a or subdivision (b) of Section 726 of the Code of Civil
Procedure to any such unified sale, the personal property or fixtures
included in the unified sale shall be deemed to be included in the
"real property or other interest sold," as that term is used in
Section 580a or subdivision (b) of Section 726 of the Code of Civil
Procedure.

Last modified: February 22, 2013