Opinion ID: 1389352
Heading Depth: 1
Heading Rank: 12

Heading: Antonioli's cross-complaint for affirmative relief

Text: Antonioli contends the trial court erred in denying relief on the cross-complaint seeking reimbursement for the sum omitted from the payoff demand on the large note. The trial court did so on two grounds. First, it found that the amount reflected interest rather than principal and that, because the transaction was usurious, the additional amount was not owed. After our conclusion that the settlement notes were not usurious, that finding no longer supports the trial court's decision. Second, the trial court found that the large note was a debt secured by a mortgage on real property and was thus governed by Code of Civil Procedure section 726's one-form-of-action rule, that is, because Antonioli had reconveyed the deed of trust to Ghirardo, Antonioli no longer could judicially foreclose the property and thus could not obtain a deficiency judgment for the amount omitted from the payoff demand. (See, Security Pacific National Bank v. Wozab (1990) 51 Cal.3d 991, 999 [275 Cal. Rptr. 201, 800 P.2d 557] [[S]ection 726 and the statutory scheme of which it is a part require a secured creditor to proceed against the security before enforcing the underlying debt.].) The Court of Appeal properly declined to reach this issue in light of its determination that the settlement notes were usurious. We believe the prudent course is for this court not to decide this issue in the first instance, but to remand to the Court of Appeal to consider the issue in light of our resolution of the usury issue.