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Bank of America, N.A. v. Stonehaven Manor

July 12, 2010

BANK OF AMERICA, N.A., PLAINTIFF AND RESPONDENT,
v.
STONEHAVEN MANOR, LLC ET AL., DEFENDANTS AND APPELLANTS.



APPEAL from a judgment of the Superior Court of San Joaquin County, Carter P. Holly, Judge. Affirmed. (Super. Ct. No. 39-2008-00186887-CU-BC-STK).

The opinion of the court was delivered by: Butz, J.

CERTIFIED FOR PUBLICATION

In this appeal we conclude that the property of a guarantor of a debt--a debt which is secured by the real property of the principal debtor and also that of a joint and several co-guarantor--is subject to attachment where the guarantor has contractually waived the benefit of that security.

Accordingly, we shall affirm the trial court's appealable orders of attachment (Code Civ. Proc., § 904.1, subd. (a)(5)),*fn1 which reached the same conclusion.

FACTUAL AND PROCEDURAL BACKGROUND

The principal debtor is Beck Properties, Inc. (Borrower), a residential developer, which obtained a $150 million line of credit from plaintiff Bank of America and its affiliates (Bank) on June 18, 2007.

Borrower provided deeds of trust on real property to secure this line of credit.

Additionally, Bank entered into a Guaranty Agreement (Guaranty) on June 18, 2007, with three guarantors for this debt: defendant and appellant Stonehaven Manor, LLC (Stonehaven); defendant and appellant Beck Investments Co., Inc. (BIC); and Linda C. Beck Holding Company, LLC (Holding Company).

Holding Company gave Bank a real property deed of trust as security for the Guaranty. Stonehaven and BIC did not provide any property to secure their Guaranty obligations.

The Guaranty provides that: (1) each guarantor is obligated individually to pay the debt; (2) each guarantor has waived any rights to rely on other guarantors or collateral; and (3) Bank may pursue prejudgment attachment. We will further examine these three provisions in turn.

As for each guarantor being obligated individually, the Guaranty specifies that if it "is signed by more than one Person, then all of the obligations of Guarantor... shall be jointly and severally binding on each"; that "the term 'Guarantor' shall mean all of such Persons and each of them individually"; and that "[a]ll promises... in this Guaranty are made by and shall be binding upon each and every such Guarantor, jointly and severally...." (Italics added.) Similar language is peppered throughout the Guaranty. For example, "Guarantor hereby jointly and severally, unconditionally... guarantees to [Bank] the punctual payment when due [of the line of credit and associated costs]." (Italics added.)

As for each guarantor waiving the right to rely on other guarantors or collateral, the Guaranty specifies that Bank "may pursue any Guarantor hereunder without being required (a) to pursue any other Guarantor hereunder or (b) to pursue rights and remedies under any Deed of Trust... with respect to" the line of credit. Again, similar language is found throughout the Guaranty. For example, "[G]uarantor hereby expressly waives[] any and all rights... under any suretyship laws... [that] require [Bank] to take prior recourse... against any collateral [or] security... [which includes the specified waiver of Civil Code section 2849--surety entitled to the benefit of every security held by creditor for performance of principal obligation]." And: "[T]he liability of Guarantor under this Guaranty shall be absolute and unconditional irrespective of: [¶]... [¶]... the taking or accepting of any other security or guaranty for, or right of recourse with respect to, any or all of the Guaranteed Obligations"; "[G]uarantor waives all rights and defenses that Guarantor may have because the Guaranteed Obligations are secured by real property"; "Guarantor acknowledges and agrees that Guarantor may be required to pay and perform the Guaranteed Obligations in full without assistance or support from Borrower or any other Person"; and "[i]t shall not be necessary for [Bank], in order to enforce such payment by Guarantor, first to institute judicial or non-judicial foreclosure or pursue or exhaust any rights or remedies against Borrower or others liable on such indebtedness, or to enforce any rights against any security that shall ever have been given to secure such indebtedness...."

Finally, as for the Guaranty's discussion of attachment, the Guaranty specifies that "[n]othing in [it] shall be deemed to... limit the right of [Bank]... to obtain from a court... prejudgment attachment."

Borrower defaulted on the line of credit in late 2007. A few months later, Bank sued guarantors BIC and Stonehaven on the Guaranty, and obtained an attachment against the property of each of them for the alleged debt balance of approximately $90 million. Bank did not seek attachment against Borrower or against guarantor ...


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