In the case of Nancy A. Schmidli et al. v. Rodney K. Pearce et al. recently decided by California’s Court of Appeal in the Third Appellate District (San Joaquin), the plaintiffs sought to extinguish a lien of deed of trust held by defendants against their property. Schmidli et. al. claimed that the defendants’ lien had expired under a 10-year statute of limitations triggered by defendant’s recording of a notice of default employing as a rationale that the “record” from which to determine the maturity date of the obligation secured by the trust deed included any recorded document that disclosed the debt’s maturity date, including a notice of default. Defendants countered that a 60-year statute of limitations applied if the last date fixed for payment of the debt is not expressly set forth within the recorded trust deed. With this line of reasoning intact, their notice of default did not trigger the 10-year statute, and their lien remained viable under a 60-year statute of limitations.

Two previous appellate decisions addressed this issue and reached different results. Slintak v. Buckeye Retirement Co., L.L.C. LTD.  (2006) concluded a notice of default triggered a 10-year statute.  Ung v. Koehler (2005) determined a notice of default did not trigger a notice of default where the notice was recorded after the 10-year period had expired and the trust deed failed to provide the maturity date of the debt, and therefore, the 60-year statute applied.
The trial court relied upon Slintak and granted a summary judgment in favor of the plaintiffs. Although the notice of default in this case was recorded before the 10-year period expired, the court concluded that Ung’s precedent was the better reasoned authority, and so reversed the judgment.

Because of this decision, a split between appellate districts on whether a 10 or 60 year statute of limitations applies to a lender’s recorded trust deed against real estate where that trust deed fails to provide for a maturity date of the loan. Although the California legislature has changed the statute to clarify 60 years as the term of maturity in the event that the trust deed failed to state a maturity date and regardless as to whether or not a subsequent notice of default so indicates, a significant number of trust deeds still recorded prior to the change are in existence which must be interpreted based upon the district where recorded unless there is further clarification from the California Supreme Court.