C.A. 4th;
E064482

The Fourth Appellate District reversed a judgment. The court held that the rule against deficiency judgments does not bar a party holding both a senior and a junior lien on real property from both conducting a trustee's sale after default on the senior note and thereafter obtaining a monetary judgment for the balance owing on the note secured by the junior lien.

In 2005, Michael and Kathleen Cobb borrowed $10,229,250. The note was secured by a deed of trust on a parcel of commercial real property. On or about September 13, 2007, the Cobbs obtained a second loan in the amount of $1,500,000, secured by a second deed of trust on the same property. Black Sky purchased both notes. After the Cobbs defaulted on the senior loan, Black Sky opted to conduct a trustee's sale under the senior deed of trust. It acquired the property for $7,500,000. A week later, after the Cobbs defaulted on the junior loan, Black Sky filed suit to recover the amount still owed on the junior note.