## Facts

- Borrowers obtained real-estate financing from a bank, secured by separate deeds of trust on three parcels (including the “Peppertree,” “Clinton,” and “Lot 66” properties).
- The deeds of trust authorized nonjudicial foreclosure on default and permitted the bank to proceed against any additional collateral concurrently or in any order.
- After repeated defaults, the bank conducted a nonjudicial foreclosure sale of the Peppertree property, which produced proceeds below the borrowers’ claimed fair market value and left an unpaid balance on the debt.
- The bank then conducted successive nonjudicial foreclosure sales of the Clinton and Lot 66 properties and applied the proceeds to satisfy the remaining indebtedness.
- Before proceeding with each subsequent sale, the bank did not seek a judicial determination of the fair market value of the property previously sold and did not credit any judicially determined value to the debt.
- Borrowers sued, alleging the bank’s serial nonjudicial foreclosures violated California antideficiency statutes (Code Civ. Proc. §§ 580a and 580d).

## Issues

1. Whether Code of Civil Procedure § 580a requires a creditor, after a nonjudicial foreclosure of one parcel, to obtain a judicial fair market value determination (and credit it against the debt) before resorting to other collateral securing the same obligation.
2. Whether a creditor violates Code of Civil Procedure § 580d’s bar on deficiency judgments by conducting serial nonjudicial foreclosures on multiple parcels securing the same debt.

## Decision

- The California Supreme Court affirmed summary judgment for the bank.
- Section 580a did not restrict the bank from proceeding against multiple items of collateral through serial nonjudicial foreclosure sales.
- Section 580d was not violated because the bank did not seek a deficiency judgment; it enforced its security interests in additional collateral.

## Legal Principles

- Code of Civil Procedure § 580a governs the calculation and limitation of a deficiency judgment by requiring a fair market value credit when the creditor seeks a personal judgment for any balance.
- Section 580a is not triggered, and does not impose a fair market value determination requirement, when the creditor does not pursue a deficiency judgment and instead proceeds only against security.
- Code of Civil Procedure § 580d bars a personal deficiency judgment after a nonjudicial foreclosure under a power of sale, but does not bar foreclosure on additional collateral securing the same obligation.
- Resort to multiple parcels of collateral through serial nonjudicial foreclosures is enforcement of security, not the pursuit of a deficiency judgment.

## Conclusion

The court held that a secured creditor may conduct serial nonjudicial foreclosure sales on multiple parcels securing the same debt without first obtaining a judicial fair market value determination under § 580a, and doing so does not violate § 580d so long as the creditor does not seek a personal deficiency judgment.


Dreyfuss v. Union Bank of Cal., 24 Cal. 4th 400, 11 P.3d 383 (Cal. 2000)