Filed 5/13/14 Sterling Trust v. Edwards CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115. 

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

STERLING TRUST et al.,

Plaintiffs and Respondents,

v.

GUY R. EDWARDS,

Defendant and Appellant.

 D063035

 (Super. Ct. No. 37-2011-00052412-

 CU-BC-NC)

 ORDER DENYING REHEARING

 AND MODIFYING OPINION

 NO CHANGE IN JUDGMENT

THE COURT:

It is ordered that the opinion filed herein on April 23, 2014, be modified as 

follows:

On page 6, second sentence of the first paragraph, the word "Edwards" is changed 

to the words "Edwards's company" so the sentence reads:

 However, that was a preliminary document, evidencing Hensel

 Financial's agreement to loan money to Edwards's company.
2

There is no change in the judgment.

Appellant's petition for rehearing is denied.

NARES, Acting P. J.

Copies to: All parties
Filed 4/23/14 Sterling Trust v. Edwards CA4/1 (unmodified version)

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115. 

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

STERLING TRUST et al.,

Plaintiffs and Respondents,

v.

GUY R. EDWARDS,

Defendant and Appellant.

 D063035

 (Super. Ct. No. 37-2011-00052412-

 CU-BC-NC)

APPEAL from a judgment of the Superior Court of San Diego County, Timothy 

M. Casserly, Judge. Affirmed.

The David Epstein Law Firm, David G. Epstein; Dykema Gossett and Ronald M. 

Greenberg for Defendant and Appellant.

Beberman, Stoffel & Beberman and James Jay Stoffel for Plaintiffs and 

Respondents.

This is an action to enforce a personal guaranty that defendant Guy R. Edwards 

signed to secure a loan from Hensel Financial, Inc. (Hensel Financial) to Edwards's

company, Manna International, Inc. (Manna). Plaintiffs Sterling Trust; Charles Gensler
2

and Lucy Gensler; Ronald Scott; Hal Holker and Shirley Holker, trustees of the Holker 

Family Trust; and Robert Maes, trustee of Maesco, Inc. Defined Benefit Plan

(collectively, plaintiffs), are assignees of the promissory note and personal guaranty. 

When Manna defaulted on the note, plaintiffs brought an action to enforce Edwards's

guaranty. The court thereafter granted plaintiffs' motion for summary judgment. 

On appeal Edwards asserts the court erred in granting summary judgment because 

(1) he was personally liable on the loan agreement and, thus, under antideficiency law the 

guaranty cannot be enforced against him; (2) the guaranty falls within the "sham"

guaranty doctrine; (3) the court's order failed to address the fact Edwards was a signatory 

to the loan agreement; and (4) the court erred in overruling Edwards's objection to 

plaintiffs' request for judicial notice. We affirm. 

FACTUAL AND PROCEDURAL BACKGROUND

A. The Loan and Personal Guaranty

In September 2006 Hensel Financial made a loan to Manna in the sum of 

approximately $400,000. The signature line states that Edwards was signing the loan as 

president of Manna. The loan was secured by a deed of trust encumbering Manna's 

commercial real property. Edwards also signed the deed of trust on behalf of Manna as 

its president. As a requirement of the loan, Edwards signed a guaranty in his individual 

capacity. Thereafter, Hensel Financial assigned the loan to plaintiffs. 

The guaranty Edwards signed states that he unconditionally guarantees and 

promises to pay all amounts due under the loan agreement. The guaranty provides: 

"Lender is unwilling to make the Loan based solely on the security offered by Borrower 
3

and Borrower's own creditworthiness, unless an individual with a creditworthiness 

comparable to that of Guarantor guaranty the Loan in accordance with the terms and 

conditions set forth below." The guaranty further provides that it is "separate, 

independent of and in addition to the obligations and undertakings of Borrower pursuant 

to the Note and Deed of Trust, Guarantor further agrees that a separate action or actions 

may be brought and prosecuted against Guarantor hereon whether or not action is brought 

against Borrower or whether or not borrower be joined in any such action or actions and 

independent of any action at law or proceeding under the power of sale provision in the 

Deed of Trust." Edwards further agreed to waive "any right to assert that the lender is 

precluded from proceeding against him if lender forecloses and further waives any right 

to any defense based upon the foreclosure defense . . . ." 

B. Manna Defaults on the Loan

On July 1, 2008, Manna defaulted on the note, and, on April 6, 2009, the trustee 

conducted a nonjudicial foreclosure on the property under the deed of trust, and the real 

property collateral was transferred by the trustee's deed upon sale. At the time of the 

sale, Manna owed a total of $446,150 and West Street LLC bid $200,000.01, which 

resulted in an offset of the sum due under the note and guaranty. That left $246,149.99 

owing, plus accrued interest. 

C. Summary Judgment Motion/Court's Ruling

Plaintiffs brought a motion for summary judgment seeking to establish their right 

to enforce the guaranty. Edwards opposed the motion asserting (1) plaintiffs could not 

recover a deficiency from him as guarantor because he was also the borrower, (2) the 
4

"sham guaranty" doctrine barred plaintiffs' recovery, and (3) there were triable issues of 

fact on the defenses of usury and "straw transaction." Edwards also objected to plaintiffs'

request that the court take judicial notice of the fact that Hensel and Hensel Financial 

were licensed real estate brokers. 

The court granted plaintiffs' motion. In doing so, the court first rejected Edwards's

contention the guaranty was a sham: 

"Defendant argues the guaranty is a sham because Manna was 

wholly owned and controlled by Defendant, and the guaranty is an 

unlawful attempt to secure a deficient judgment on a non-judicial 

foreclosure. Plaintiffs present evidence, however, that Manna was a 

valid California Corporation in good standing, and Defendant signed 

the guaranty in his individual capacity. [Citation.] Although 

Defendant represents that Hensel Financial presented the guaranty as 

a mere formality, the language of the guaranty states that the 'lender 

is unwilling to make the loan based solely on the security offered by 

Borrower and Borrower's own creditworthiness, unless an individual 

with a creditworthiness comparable to that of Guarantor guaranty the 

Loan,' and that 'Guarantor has agreed to execute this Guaranty in 

order to guarantee to Lender repayment of the Loan pursuant to the 

terms of the Note and that he is undertaking an independent 

obligation separate from that of Borrower to repay the Loan.' 

[Citation.] Defendant has presented no admissible evidence 

supporting this defense."

With regard to Edwards's usury and straw transaction defenses the court found: 

"Despite Defendant's usury defense, Civil Code section 1916.1 

provides that 'the restrictions upon rates of interest contained in 

Section 1 of Article XV of the California Constitution shall not 

apply to any loan or forbearance made or arranged by any person 

licensed as a real estate broker by the State of California, and 

secured, directly or collaterally, in whole or in part by liens on real 

property.' Although Defendant argues that the subject loan was a 

straw transaction because Hensel Financial was acting on behalf of 

individuals or entities not entitled to lend money at the rate in 

question, Hensel Financial is a licensed real estate broker."
5

DISCUSSION

I. STANDARDS GOVERNING SUMMARY JUDGMENT MOTIONS

"Because this case comes before us after the trial court's grant of summary 

judgment, we apply these well-established rules: ' " '[W]e take the facts from the record 

that was before the trial court when it ruled on that motion,' " ' and we ' " ' " 'review the 

trial court's decision de novo, considering all the evidence set forth in the moving and 

opposing papers except that to which objections were made and sustained.' " ' " ' 

[Citation.] We also ' " 'liberally construe the evidence in support of the party opposing 

summary judgment and resolve doubts concerning the evidence in favor of that 

party.' " ' " (Tverberg v. Fillner Construction, Inc. (2010) 49 Cal.4th 518, 522.) "We 

need not defer to the trial court and are not bound by the reasons in its summary 

judgment ruling; we review the ruling of the trial court, not its rationale." (Oakland 

Raiders v. National Football League (2005) 131 Cal.App.4th 621, 630.)

II. ANALYSIS

A. Manna, Not Edwards, Was The Borrower

Edwards contends that because he was personally a party to the loan agreement, 

under antideficiency law the guaranty could not be enforced against him. We reject this 

contention. 

The undisputed facts show the promissory note and deed of trust were signed by 

Edwards in his capacity as president of Manna, not personally. The only document that 

he signed in his personal capacity was the guaranty. 
6

Edwards points to a document entitled "Loan Agreement," that does not have a 

signature line stating that Edwards was signing as president of Manna. However, that 

was a preliminary document, evidencing Hensel Financial's agreement to loan money to 

Edwards. "[I]n larger, more complex loan transactions, the lender may require a loan 

agreement in addition to its other standard loan documentation. . . . The loan agreement 

typically defines and explains the terms of the contemplated loans; and, in some cases, 

may operate as a binding 'loan commitment.'" (Greenwald et al., Cal. Practice Guide: 

Real Property Transactions (The Rutter Group 2012) ¶ 6:180, pp. 6:38 to 6-39 (rev. #1, 

2011).) The promissory note and deed of trust that evidence the actual loan itself were 

both signed by Edwards in his capacity as president of Manna. 

Moreover, the language of the loan agreement itself evidences that the borrower 

was Manna, not Edwards. It states that "BORROWER will deliver to COMPANY 

(Hensel Financial) a Note and Deed of Trust, securing the same acceptable to 

COMPANY . . . ." It is undisputed that the note and deed of trust were given by Manna, 

not Edwards. The loan agreement further states that "COMPANY is in a position to 

procure a Loan Policy of Title Insurance for COMPANY'S benefit with a liability of not 

less than the principal amount of the loan, on the following described real property (the 

'Property'): APN 152-012-13 & 14, Oceanside, CA." The described real property was 

owned by Manna. 

The loan agreement also states: "The undersigned will pay all costs, expenses and 

charges as itemized and estimated on the Mortgage Loan Disclosure Statement given to 

BORROWER and executed by BORROWER, which is incorporated herein by this 
7

reference." The mortgage loan disclosure statement states that the loan is secured by 

Manna's real property and is signed by Edwards in his capacity as president of Manna. 

He also asserts the guaranty cannot be enforced because he was told by Hensel 

that it was a mere "formality." However, this contention directly contradicts the language 

of the guaranty that states the "Lender is unwilling to make the Loan based solely on the 

security offered by Borrower and Borrower's own creditworthiness, unless an individual 

with a creditworthiness comparable to that of Guarantor guaranty the Loan in accordance 

with the terms and conditions set forth below."

B. "Straw Man" and Usury Defenses

As the court found, although Edwards contends that Hensel was a straw man for 

plaintiffs so they could make the loan at a usurious rate of interest, these defenses fail 

because Hensel Financial is a licensed real estate broker. Civil Code section 1916.1

provides in part, "The restrictions upon rates of interest contained in Section 1 of Article 

XV of the California Constitution shall not apply to any loan or forbearance made or 

arranged by any person licensed as a real estate broker by the State of California, and 

secured, directly or collaterally, in whole or in part by liens on real property." (Italics 

added.) Thus, these defenses are unavailing.

C. "Sham Guaranty" Defense

Edward asserts that Cadle Co. II v. Harvey (2000) 83 Cal.App.4th 927 (Cadle)

supports his position that the guaranty was a sham. However, Cadle actually supports 

plaintiffs' position. 
8

"The courts have repeatedly recognized that the antideficiency laws embodied in 

[Code of Civil Procedure] sections 580a through 580d and 726 reflect a legislative policy 

that strictly limits the right to recover deficiency judgments for the amount the debt 

exceeds the value of the security." (Cadle, supra, 83 Cal.App.4th at p. 932.) "The 

debtor cannot be compelled to waive the antideficiency protections in advance [citations] 

because the antideficiency legislation was established for a public reason and [the 

protections] cannot be contravened by a private agreement." (Ibid.)

However, "the protections afforded to debtors under the antideficiency legislation 

do not directly protect guarantors from liability for deficiency judgments. [Citation.] [I]f 

a guarantor expressly waives the protections of the antideficiency laws, a lender may

recover the deficiency judgment against the guarantor even though the antideficiency 

laws would bar the lender from collecting that same deficiency from the primary 

obligor." (Cadle, supra, 83 Cal.App.4th at p. 932.)

Edwards again asserts that he was a borrower under the loan, and therefore the 

guaranty was a sham and was unenforceable. However, the undisputed facts in this case 

are that the only principal obligor is Manna, a California corporation, and that Edwards is 

the guarantor. Therefore, the guaranty is not a sham and Edwards is not entitled to the 

protections of the antideficiency law. 

D. Court's Minute Order

Edwards asserts that the court's minute order was deficient because it failed to 

address the "extensive" evidence that he personally was a signatory on the loan. This 

contention is unavailing. 
9

In its minute order the court stated that it was relying on all "the evidence

presented." That was sufficient. 

Code of Civil Procedure section 437c, subdivision (g) provides in part: "Upon the 

grant of a motion for summary judgment, on the ground that there is no triable issue of 

material fact, the court shall, by written or oral order, specify the reasons for its 

determination. The order shall specifically refer to the evidence proffered in support of, 

and if applicable in opposition to, the motion which indicates that no triable issue exists. 

The court shall also state its reasons for any other determination."

Although the trial court did not extensively discuss the evidence offered in support 

and opposition to the motion for summary judgment, its minute order was sufficient. Its 

order did specify the reasons for its determinations and reference relevant evidence. 

Under such circumstances, we find that it was adequate for purposes of Code of Civil 

Procedure section 437c, subdivision (g). Moreover, "even assuming that, ideally, a 

further statement ought to have been given, there is no harm where, as here, our 

independent review establishes the validity of the judgment." (Goldrich v. Natural Y 

Surgical Specialties, Inc. (1994) 25 Cal.App.4th 772, 782.) 

E. Edwards's Objection to Hensel's Proof of Licensure

Edwards asserts the court erred in overruling his objection to Hensel's declaration 

stating Hensel Financial and Hensel were licensed real estate brokers. Specifically, he 

argues the court should not have taken judicial notice of printouts from the Department of 

Real Estate showing that they were licensed because the printouts were not authenticated. 

We reject this contention. 
10

1. Background

In his declaration filed in support of the motion for summary judgment Hensel 

stated that he was "the President of Hensel Financial" and that "Hensel Financial has 

been, and is still, licensed as a California corporate real estate broker, License 

#0834600." Hensel further stated in his declaration that in his individual capacity he was 

"licensed by the California Department of Real Estate as a real estate broker, License 

#00710033." 

Edwards objected to the declaration, based upon the fact that no copy of Hensel's 

license was provided. 

The court overruled Edwards's objection. 

Plaintiffs also filed a request for judicial notice of online licensing information 

from the California Department of Real Estate. In that request for judicial notice Hensel 

stated that "[t]he California Department of Real Estate online records are available public 

records which the plaintiffs did not need to request the court to take judicial notice of 

because Hensel could provide, and did provide, testimony as to these undisputed facts 

through his personal knowledge. [¶] Nevertheless, plaintiffs have attached as Exhibit 11 

and Exhibit 12 to their Request for Judicial Notice, filed concurrently herewith, copies of 

the California Department of Real Estate, online licensing information, for Hensel and 

Hensel Financial, which reflect Hensel is, and has been, a licensed real estate broker 

since January 13, 1981 and Hensel Financial is, and has been, a licensed real estate 

broker since April 15, 1982."
11

Edwards objected to the request for judicial notice. The objection was based on 

the fact that the documents taken from the Internet were not authenticated. 

The court granted Hensel's request for judicial notice. 

2. Analysis

It is of no moment that the court granted Hensel's request for judicial notice 

because Hensel's declaration itself established that he and Hensel Financial were licensed 

real estate brokers. Hensel has personal knowledge of those facts and thus his declaration 

was competent evidence of licensure. 

Moreover, the online licensing documents were matters of which the court could 

properly take judicial notice. (See Elmore v. Oak Valley Hospital Dist. (1988) 204 

Cal.App.3d 716, 722 [judicial notice of a statement of identity filed by a hospital with the 

Secretary of State was proper].) 

DISPOSITION

The judgment is affirmed. Plaintiffs shall recover their costs on appeal. 

NARES, Acting P. J.

WE CONCUR:

O'ROURKE, J.

AARON, J.