SMN Lo, Inc. v. M & A Enterprises CA4/2

I. INTRODUCTION

This case involves competing claims of priority among the beneficiaries of several

deeds of trust on a 12-unit apartment building in Ontario (the Ontario property).

Defendant, cross-complainant, and appellant M & A Enterprises, Inc. (M & A) held a

second-position deed of trust, securing a $160,000 note. 1 Plaintiff and respondent SMN

LO, Inc. (SMN), and cross-defendant and respondent, Hanh Thi Tran (Tran),

respectively, held third- and fourth-position deeds of trust, securing notes for $110,000

and $200,000. FCI Lender Services, Inc. (FCI), which is not a party to this action, held

an undisputed first-position deed of trust, securing $725,000.

After Tran’s deed of trust was recorded, M & A recorded a modification of its

second-position deed of trust, increasing the secured debt from $160,000 to $410,000,

making the entire $410,000 debt immediately due and payable and advancing the

maturity date of the $160,000 debt. M & A then commenced nonjudicial foreclosure

proceedings on its original second-position deed of trust, securing $160,000. M & A

paid FCI over $825,000 to pay off the amount secured by FCI’s first-position deed of

trust. M & A also…