Paradise Land and Cattle Company, a Co-Partnership v. McWilliams Enterprises, Inc., a California Corporation

The seller of a Nevada ranch, Paradise Land & Cattle Co. (“Paradise”), sued to enforce a guaranty made by one of the buyers, McWilliams Enterprises, Inc. (“Enterprises”). The district court granted summary judgment in favor of Paradise. Enterprises appeals, contending that it was entitled to California’s statutory protection from deficiency judgments on purchase-money obligations secured by real property. We affirm.

In the 1970s, Herb McWilliams and his son Don were California cattle ranchers. The McWilliamses conducted their ranching operations through two corporations, Enterprises and McWilliams Land & Cattle Co., Inc. (“Land & Cattle”). Enterprises’ only shareholders were Herb (55%) and a trust in part for the benefit of Don (45%). During the same period, Paradise was the owner of a Nevada ranch. In the early 1980s, the McWilliamses decided to buy the Paradise ranch.

In late 1981, the parties signed an option contract. Under the contract, Enterprises and Land & Cattle acquired an option to purchase the Paradise ranch for $2,600,000. Part of the purchase price was to be in the form of a note signed by Enterprises and Land & Cattle in favor of Paradise, secured by a deed of…