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on the Monte Vista Property” and that “The mere possibility that
a lender might have made a claim against the estate on the Monte
Vista note is insufficient to conclude that the estate was
personally liable for the obligation.”
The estate’s argument rests on the provisions governing
deeds of trust under California law, specifically that contained
in Cal. Civ. Proc. Code sec. 580d (West 1976 & Supp. 1995). The
statute reads, in pertinent part:
No judgment shall be rendered for any deficiency
upon a note secured by a deed of trust or mortgage upon
real property or an estate for years therein hereafter
executed in any case in which the real property or
estate for years therein has been sold by the mortgagee
or trustee under power of sale contained in the
mortgage or deed of trust. [Id.]
The effect of such section is to prevent a lender who
chooses to foreclose on a deed of trust by means of a nonjudicial
sale, under the power of sale contained in the trust instrument,
from thereafter seeking a deficiency judgment against the debtor.
Cornelison v. Kornbluth, 542 P.2d 981, 989-990 (Cal. 1975). At
the same time, however, the Supreme Court of California has also
made clear that a nonjudicial sale is not the only enforcement
remedy available to the lender holding a deed of trust:
‘It seems clear that section 580d was enacted to put
judicial enforcement on a parity with private
enforcement. This result could be accomplished by
giving the debtor a right to redeem after a sale under
the power. The right to redeem, like proscription of a
deficiency judgment, has the effect of making the
security satisfy a realistic share of the debt. * * *
By choosing instead to bar a deficiency judgment after
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