In re Sukhu

This case concerns the degree to which sections 882.020-882.040 of the California Civil Code overrule prior judicial decisions holding that a power of sale under a deed of trust .is never barred by the statute of limitations. I conclude that under the statute enforcement of a deed of trust is not barred when an action on the underlying obligation is barred, but only when the special non-tolling statute of limitations established by section 882.020 has run.

The relevant facts are simple and are undisputed. Debtor executed a promissory note in favor of Thurber Construction Company on June 27, 1979 in the amount of $32,500. The promissory note was secured by a deed of trust on Debtor’s residence. Debtor did not pay the note when it became due on June 26, 1980. Creditor Janice Thurber (Creditor) succeeded to the interest of Thurber Construction Company when her husband, Robert Thurber, died. Creditor did not commence an action until she filed a proof of claim in this bankruptcy proceeding on September 19, 1989. Debtor seeks an order avoiding Creditor’s lien against her residence on the grounds *730 that enforcement of both the underlying promissory note and the deed of trust…