Florio v. Lau
California Court of Appeal
68 Cal. App. 4th 637 (1998)
Facts
Michael Florio and Hal McConnaughey (plaintiffs), in connection with a settlement, agreed to cover a debt owed by B. Peck Lau and Judith Lau (defendants) in the event that the Laus defaulted on that debt. Were Florio and McConnaughey made to cover the debt, they would be entitled to sue the Laus for reimbursement. The Laus’ reimbursement obligation was secured by both real property and an interest in an unrelated partnership. The Laus defaulted on their primary debt, and Florio and McConnaughey paid in the Laus’ stead. Florio and McConnaughey then began foreclosing on the reimbursement securities. Florio and McConnaughey held a judicial foreclosure of the real property, generating modest but deficient proceeds. Five months later, Florio and McConnaughey held a judicial sale of the partnership interest but were unable to find a bidder. Florio and McConnaughey then sought a deficiency judgment against the Laus for the remainder of the reimbursement obligation. The Laus argued that the deficiency action was time-barred. The trial court held for Florio and McConnaughey, and the Laus appealed.
Rule of Law
Issue
Holding and Reasoning (Vartabedian, J.)
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