Decon Group v. Prudential Mort.
Annotate this CaseWellesly owned real property subject to a first deed and a junior mechanic's lien. The holder of the mechanic's lien subsequently filed suit to foreclose its lien, arguing that the lien was not eliminated by a foreclosure. The court held that, under well-established California law, the senior beneficiary's lien and title ordinarily do not merge when a deed in lieu of a foreclosure is given if there are junior lienholders of record; the foreclosure after acceptance of the deed was therefore valid and eliminated all junior liens, including plaintiff's mechanic's lien; and the third party now owns the property free of all such junior encumbrances. Accordingly, the court reversed the superior court's foreclosure order on the mechanic's lien.
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