Legal Question in Real Estate Law in California

He already did, didn't he? The proper question is what can you do? Defend the case or settle it. File your Answer and/or other pleadings and motions as applicable. Raise all the available defenses with whatever admissible and credible witnesses, evidence and facts are available. Go to trial if it can't be settled, or resolved with motions. There is no magic wand to wave and make it all disappear. If you don't know how to do these things, then hire an attorney that does, who will try to get a dismissal or decent outcome through negotiations, or take it to trial. If serious about doing so, feel free to contact me. I�ll be happy to help you use whatever defenses you may have.

"We never agreed to this" ?? Well, you agreed to pay the principal and interest specified in the note. Now, in order to avoid a judgment against you, you'll need to defend in court and your defense will need to focus on legal and equitable reasons why the note is not due and payable according to its terms.

Such defenses might include that the note is non-recourse; or that it has been satisfied by the deeding back of the property, and that the plaintiff's re-selling constitutes an acceptance of the deed back to him; or that there has been a novation of the original purchase contract, or that the note was a disguised mortgage.

Your problem stems from the unsecured nature of the note - it is your general obligation, apparently not tied to a particular piece of collateral, so there is recourse to the makers without the protection of the security-first laws.

In my personal view, the lawsuit probably will be won by whichever party is best able to convince the judge that fundamental fairness is on his side, and the judge will find (with the help of the attorney, or course) a legal or equitable theory that supports that "fair" outcome.

I'm confused by your statement that it is an unsecured note, followed by your statement that you deeded the property "back" to the note holder. I feel that there are more details to your situation that you have not provided.

It sounds as though you were under some sort of disguised security transaction. I suggest you speak to an attorney familiar with real estate law in California.