Harvey

The D. Neil Harvey Family Trust (the trust), an inter vivos revocable trust settled by respondent D. Neil Harvey, purchased real property from a bank. As part of the purchase price, the trust gave the bank a purchase money note secured by a deed of trust encumbering the real property. Harvey also signed a guaranty purporting to personally guarantee the secured purchase money note. The trust later defaulted on the note, and the bank’s successor in interest nonjudicially foreclosed and purchased the real property by credit bid at the foreclosure sale for less than the amount owed on the note, leaving an unpaid balance (the deficiency).

In the present lawsuit, appellant The Cadle Company II (Cadle), assignee of the note and the guaranty, sued Harvey on the guaranty to collect the deficiency. The trial court sustained Harvey’s demurrer without leave to amend, concluding the guaranty was a nullity under Torrey Pines Bank v. Hoffman (1991) 231 Cal.App.3d 308 [ 282 Cal.Rptr. 354 ] (Torrey Pines).

We conclude the trial court correctly sustained the demurrer to Cadle’s claims on the guaranty because, under Torrey Pines, Harvey had no liability on the guaranty separate or…