Simon

Petitioners, George V. Simon, M.D., and his former wife Bonnie (Simon) Johnson (individually Simon and Johnson, respectively; collectively the Simons), seek a writ of mandate to nullify the order of the trial court denying their motion for summary adjudication of issues, and overruling their demurrer to the first and second causes of action of the first amended complaint of real party in interest, Bank of America, NT & SA (Bank).

In granting the writ, we hold that, where a creditor makes two successive loans secured by separate deeds of trust on the same real property and forecloses under its senior deed of trust’s power of sale, thereby eliminating the security for its junior deed of trust, section 580d of the Code of Civil Procedure bars recovery of any “deficiency” balance due on the obligation the junior deed of trust secured.

I. Facts and Procedural Background

In August 1986, Bank lent the Simons a total sum of $1,575,000, for which the latter gave Bank two separate promissory notes—the first in the amount of $1.2 million (senior note); the second for $375,000 (junior note). Each note was secured by a separate deed of trust naming Bank beneficiary and describing…