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repayment of a loan which was in fact used to pay all
or part of the purchase price of that dwelling
occupied, entirely or in part, by the purchaser. [Cal.
Civ. Proc. Code sec. 580b (West 2002).]
While both petitioner and respondent devoted substantial
space in their briefs attempting to persuade the Court to adopt
their respective views of the proper construction of section
580b, we need not resolve this question.4 In the light of
Stephanie’s and David’s inability to pay, we view petitioner’s
conclusion that the unsatisfied portion of the Atascadero loan
was worthless as an exercise of sound business judgment.
To give effect to the foregoing conclusions,
Decision will be entered
under Rule 155.
4Although the application of Cal. Civ. Proc. Code sec. 580b
(West 2002) to petitioner’s loan is not clear, the policy behind
the statute and its liberal application by the California courts,
Roseleaf Corp. v. Chierighino, 378 P.2d 97, 101 (Cal. 1963)
(purpose of sec. 580b is to place the risk of inadequate security
on the lender); BMP Prop. Dev. v. Melvin, 198 Cal. App. 3d 526
(1988) (“purchase money” includes funds used to satisfy the
purchase price and funds used for other purposes that are an
integral part of the consummation of the transaction); Prunty v.
Bank of Am., 37 Cal. App. 3d 430 (1974) (courts have accorded
sec. 580b a reading that often goes beyond the bounds of the
statutory language), suggest that petitioner’s decision to avoid
the financial and time costs of risky litigation was reasonable.
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