Guarantor's waiver of protection
Elsewhere we see that pre-default waivers of debtor protections, such as anti-deficiency rules or the security first rule, are largely unenforceable. See Commentary.Waiver of Debtor Protections. Should pre-default waivers of those same protections by guarantors be enforceable? Consider, for example, the following waiver drawn from a document under consideration in Bank of Southern California v. Dombrow, 39 Cal. App. 4th 1457 (1995):
Guarantor's Waivers. Except as prohibited by applicable law, Guarantor waives any right to require Lender: (a) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (b) to resort for payment or to proceed directly or at once against any person, including Borrower or any other guarantor; (c) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other person; (d) to give notice of the terms, time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of Section 9504 of the California Uniform Commercial code; (e) to pursue any other remedy within Lender's power; or (f) to commit any act or omission of any kind, or at any time, with respect to any matter whatsoever.
Guarantor also waives any and all rights or defenses arising by reason of (a) 'one action' or 'anti-deficiency' law (including without limitation Sections 580 and 726 of the California Code of Civil Procedure as from time to time amended) or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (b) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (c) any disability or other defense of Borrower, of any other guarantor, or of any other person, or by reason of the cessation of Borrower's Liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness (including without limitation any defense based on Section 580 and 726 of the California Code of Civil Procedure); (d) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any Collateral for the Indebtedness; or (e) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced there is outstanding Indebtedness of Borrower to Lender which is not barred by any applicable statute of limitations.
Cal. Civ. Code 2856, Cathy Bank v. Lee, and River Bank America v. Diller address the question of waiver of debtor protections by guarantors.