Allstate Savings & Loan Assn. v. Murphy

Opinion

BEACH, J. J.—

Facts

Following a foreclosure sale of defendant borrowers’ single-family dwelling by the holder of the first trust deed on the property, plaintiff

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lender sued defendants for the unpaid amount on two promissory notes, which were secured by trust deeds on the same property and whose proceeds were used for the construction of a swimming pool and a concrete block wall at the property. Plaintiff alleged in its complaint that as a result of the senior creditor’s foreclosure sale, which did not provide funds to satisfy defendants’ indebtedness to plaintiff, plaintiff’s deeds of trust were rendered valueless. Defendants interposed the defense of the anti-deficiency provision of Code of Civil Procedure section 580b (hereafter referred to as section 580b or the statute). After the trial court granted plaintiff’s motion for summary judgment on the ground that section 580b applies only to loans to finance the purchase of a dwelling and not to loans for the construction of a swimming pool, defendants appealed.

Issue On Appeal and Holding

The question presented on appeal is whether section 580b bars a deficiency judgment against a lender who loaned a borrower money for the purpose of constructing a swimming pool. We hold it does not, as we shall explain below.

Discussion

Section 580b provides in pertinent part: “No deficiency judgment shall lie in any event. . .under a deed of trust, or mortgage.. .on a dwelling for not more than four families given to a lender to secure repayment of a loan which was in fact used to pay all or part of the purchase price of such dwelling occupied, entirely or in part, by the purchaser.” A statute which has a single meaning apparent on its face requires no interpretation.

(Friends of Mammoth

v.

Board of Supervisors,

8 Cal.3d 247, 256 [104 Cal.Rptr. 761, 502 P.2d 1049];

Benor

v.