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Los Angeles Lawyer
The Magazine of the Los Angeles County Bar Association


 
 

January 2006      MCLE Test and Answer Sheet

Test Number 144: Fool with a Pen

 
 

Instructions for Obtaining MCLE Credit

The Los Angeles County Bar Association certifies that this activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1 hour. To apply for credit, please follow the instructions.

1. Study the CLE article.

2. Answer the test questions by marking the appropriate boxes. Each question has only one answer.

3. Photocopies of this answer sheet may be submitted; however, this form should not be enlarged or reduced. Mail the answer sheet and the $15 testing fee ($20 for non-LACBA members) to:

Los Angeles Lawyer
MCLE Test
P.O. Box 55020
Los Angeles, CA 90055 

Make checks payable to Los Angeles Lawyer.

4. You can also fill in the test form and submit it directly to LACBA by clicking "Submit." To submit your test answers online you will need to pay by credit card. After submitting your answers you will be presented with a screen requesting payment information. This information will be submitted in a secure mode which will allow you to safely transmit your credit card number over the Internet. If you prefer not to pay by credit card, please print this answer sheet and submit your responses by regular mail.

5. Within six weeks, Los Angeles Lawyer will return your test with the correct answers, a rationale for the correct answers, and a certificate verifying the CLE credit you earned through this self-assessment activity.

6. For future reference, please retain the CLE test materials returned to you.

 
  Test Sheet
 
 

Mark your answers to the test by clicking next to your choice.  All questions must be answered.  Each question has only one answer. This test is worth 1 hour of credit.*

1. A guarantor is anyone who promises to answer for the:
 A. Debt of another.
 B. Default of another.
 C. Miscarriage of another.
 D. All of the above.

2. When a guarantor has guarantied a note payable on a certain date, the guarantor has also in effect agreed to guaranty the same note if the payor and payee choose to extend the maturity date by 30 days.
 True.
 False.

3. What judicially created protections may a guarantor effectively waive under the Civil Code?
 A. None.
 B. A guarantor may only waive "fair market value" protections.
 C. A guarantor may waive antideficiency and one-action protections.
 D. A guarantor may waive all judicially created protections.

4. The Civil Code has codified certain protections for guarantors and sureties.
 True.
 False.

5. In Union Bank v. Gradsky, was the guarantor exonerated from liability on its guaranty?
 A. Yes, because the creditor had foreclosed judicially, so the creditor could not seek any deficiency judgment--and neither could the guarantor.
 B. Yes, because the creditor had deprived the guarantor of its subrogation and reimbursement rights without the guarantor's consent, so the court employed an estoppel justification to exonerate the guarantor.
 C. Yes, because the creditor could not foreclose via power of sale, so neither could the guarantor, thereby exonerating the guarantor from any liability whatsoever.
 D. No.

6. In Western Security Bank v. The Superior Court of Los Angeles County, the guarantor's loss of the right of contribution was sufficient to support the holding of Gradsky.
 True.
 False.

7. The court in Western Security confronted a guarantor obligation secured by membership interests in the single purpose entity (SPE) that was the owner of the real property.
 True.
 False.

8. In Western Security, the guarantor's loss of the right of subrogation was sufficient to support the holding of Gradsky.
 True.
 False.

9. Considering the scope of Civil Code Section 2856, an attorney is afforded complete protection in rendering a legal opinion regarding the enforceability of waivers in guaranties.
 True.
 False.

10. Under a completion guaranty, if the debtor/builder fails to complete the project, the completion guarantor must complete the construction.
 True.
 False.

11. The completion guaranty constitutes a promise by the completion guarantor to pay a certain loss in value to the security that is the result of noncompletion.
 True.
 False.

12. If the lender is fully secured at the time of foreclosure (and assuming the debtor/builder has failed to complete the project), the lender may recover fully from the completion guarantor.
 True.
 False.

13. A debtor may waive the one-action rule.
 True.
 False.

14. A guarantor may waive the one-action rule.
 True.
 False.

15. A debtor may waive the antideficiency rules.
 True.
 False.

16. A guarantor may waive the antideficiency rules.
 True.
 False.

17. What is the term commonly used to refer to a guaranty that, in substance, is structured to 1) afford a guarantor certain debtor protections, such as the one-action rule and the antideficiency rules, and 2) places the guarantor in the same economic position as that of the debtor?
A. Sham guaranty.
B. Contribution guaranty.
C. True guaranty
D. None of the above.

18. Under Code of Civil Procedure Section 580d, a creditor, following a nonjudicial foreclosure, may seek a deficiency judgment against the debtor on the real estate-secured obligation.
 True.
 False.

19. Under Section 580d, following a judicial foreclosure, a creditor may seek a deficiency judgment against the debtor on the real estate-secured obligation.
 True.
 False.

20. The court in Western Security addressed whether Section 580d should bar an issuer of a letter of credit from pursuing a foreclosed-out debtor on a reimbursement agreement.
 True.
 False.

Address and Billing
After submitting your answers you will be asked to enter your name, address, and payment information on the next screen. Once you have submitted the current form, you will be switched to a secure mode which will allow you to safely transmit your credit card number over the Internet.
If you do not wish to complete this transaction over the Internet you should print this page and send it to the address listed in Step 3 of the instructions at the top of this page.
 
Before clicking the Submit button, please verify that all questions have been answered. An error message will appear if not all questions are answered.

* The Los Angeles County Bar Association has been approved as a continuing legal education provider of Minimum Continuing Legal Education credit by the State Bar of California. This self-assessment activity will qualify for Minimum Continuing Legal Education credit by the State Bar of California in the amount of one hour.

 


 
   
 

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