Estate of Hon Hing Fung, Deceased, Bernard Fung, Executor - Page 13




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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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