When it comes to enforcing obligations secured by California real estate, California is a “single action” or “one-action” state. Civil Procedure Code Section 726(a) provides in part that “[t]here can be but one form of action for the recovery of any debt or the enforcement of any right secured by a mortgage upon real property.” This “one-action” rule applies when a California community association secures, as it should, the delinquent owner’s assessment obligation by recording a lien and then exercises its remedies to recover that debt. The purpose of the one-action rule is to protect the delinquent owner from being harassed by a lot of different actions filed against it by the association.
California’s “one-action” statute prohibits the secured association from first pursuing non-judicial foreclosure, and after there are no third party bids on the property, then suing the delinquent owner directly. An association can only bring one “action” against the owner.
An association can sue the delinquent owner and proceed non-judicially. But the association must at some point choose what it wants to do; get a judgment or foreclose. It cannot do both; only a single action.
Even though California’s “one-action” rule applies to foreclosures, associations can start both a judicial process and a nonjudicial process (also known as a “trustee’s sale”). Simply beginning a nonjudicial foreclosure is not deemed to constitute an “action” in California. Neither the commencement of a judicial foreclosure action, nor the filing of a notice of default which commences the nonjudicial foreclosure process, is considered an irrevocable election of remedies under the one-action rule. An association is deemed to have elected its remedy, and had its one action, only when a judgment has been entered if a judicial foreclosure action is completed. An association that completes a non-judicial foreclosure sale is also deemed to have elected its remedies and may not seek a deficiency judgment against the borrower. So, an association will not be deemed to have made an election between these two foreclosure methods until one of them has been completed.