Fbw Enterprises, a Nevada General Partnership v. The Victorio Company, an Arizona Corporation

The issue in this case is whether the protections of Nevada’s "one action” rule and deficiency judgment statutes, Nev.Rev. Stat. 40.430 & 40.451-40.459, apply to a creditor’s action against a guarantor of a secured debt. We conclude that the deficiency judgment statutes apply, and reverse the summary judgment rendered in the district court in favor of the appellee.

BACKGROUND

The material facts in this case are undisputed. In February, 1982, Victorio Investment Company (Investment Company), a California limited partnership, purchased from plaintiff-appellee FBW Enterprises real property in Washoe County, Nevada. Defendant-appellant Victorio Company (Victorio), an Arizona Corporation, was the Investment Company’s sole general partner. For the Investment Company, Victo rio executed a promissory note to FBW in the principal amount of $1,595,096.00. The promissory note was secured by a deed of trust encumbering the realty. In addition, FBW required Victorio to execute and deliver a separate “Guarantee of Payment” of the note.

As part of the real estate transaction, FBW borrowed $2 million from Valley Bank of Nevada in exchange for which FBW gave Valley its promissory note. FBW also…