Black Sky Capital, LLC v. Cobb

In this real property dispute, the Supreme Court held that Cal. Code Civ. Proc. 580d does not preclude a creditor holding two deeds of trust on the same property from recovering a deficiency judgment on the junior lien extinguished by a nonjudicial foreclosure sale on the senior.In two separate transactions, Defendants borrowed sums of money by executing promissory notes secured by deeds of trust on the same parcel of commercial property. Plaintiff eventually acquired both loans and then purchased the property at a public auction. Plaintiff filed a lawsuit to recover the amount still owed on the second deed of trust extinguished by the foreclosure sale. The trial court concluded that section 580d barred the monetary judgment sought by Plaintiff. The court of appeal reversed, concluding that section 580d did not apply to preclude Plaintiff from suing for the balance due on the junior note in this case. The Supreme Court affirmed, holding that section 580d does not bar a deficiency judgment on a junior lien held by a senior lien holder that sold the property comprising the security for both liens. View "Black Sky Capital, LLC v. Cobb" on Justia Law