Logically, the 4 year statute of limitations of Civil Code §387(1) applies to breach of a promissory note secured by a deed of trust.  But foreclosure on the deed of trust is not limited to the “normal” statute of limitations.  In Trenk v. Soheili, (Dec. 2020) B295434, (Los Angeles County Super. Ct. No. PC058343), the court analyzed the 10/60 year rule of Civil Code ╘880.020.  In 2001 a lawyer was sued for malpractice, he settled in 2003 agreeing to pay $100,000 secured by a deed of trust on his community property house.  The promissory note gave him three years to pay.  He paid $25,000 then stopped payments.  He owed $75,000.   In 2018 the plaintiff/creditor began foreclosure proceedings.  The debtor field an action to quiet title in the residence citing the statute of limitations and the Marketable Record Title Act (Civ. Code, § 880.020 et seq.) barred enforcement of the trust deed.  The trial court agreed.  The judgment was affirmed on appeal, but for different reasons.

The appellate court held that a power of sale in a trust deed is enforceable even if the statute of limitations has run on the underlying obligation if the trust deed does not state the last date for payment under the promissory note.  See Civil Code section 882.020,
subdivision (a)(2).  The key is if a date is set forth in the deed of trust for the last payment/due date.  The creditor may have 10 years, or would have 60 years to exercise the power of sale in the trust deed if no due date is stated.  It is also possible under Civil Code Section 882.020, subdivision (a)(3) to extend the applicable time period by 10 years by recording a “notice of intent to preserve the security interest.”

Read Civil Code section 882.020, subdivision (a)(1) provides that a power of sale may not be used to enforce a lien after 10 years from the last date fixed for payment, if that date is “ascertainable from the recorded evidence of indebtedness.”  Remember, Don’t confuse a judicial foreclosure (which has a statute of limitations) with a non-judicial which does not.

It is also good that Mr. Trenk, was married.  The Court of Appeal found that the power of sale is not enforceable for another reason. The Residence presumptively is community property. The wife did not execute the trust deed, she has the power to void it.  Fam. Code, § 1102, subd. (a)

Editor’s note: I have met Mr. Trenk, he’s a very nice guy, but he really should have paid his debt.