Anthony N Ozogu et al v. CitiMortgage Inc et al

Filing 30

MINUTES by Judge Christina A. Snyder: The Court hereby DENIES Plaintiffs' Ex Parte Application for Temporary Restraining Order 22 . Court Reporter: Laura Elias. (gk)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 10-9687 CAS (AGRx)

Title

ANTHONY N. OZOGU, ETC.; ET AL. v. CITIMORTGAGE, INC.; ET
AL.

Present: The Honorable

Date

CHRISTINA A. SNYDER

CATHERINE JEANG
Deputy Clerk

LAURA ELIAS
Court Reporter / Recorder

Attorneys Present for Plaintiffs:

I.

N/A
Tape No.

Attorneys Present for Defendants:

Jesus Perez
Proceedings:

May 16, 2011

Jonathan Zak

PLAINTIFFS’ EX PARTE APPLICATION FOR
TEMPORARY RESTRAINING ORDER (filed 05/04/11)

INTRODUCTION

On October 22, 2010, plaintiffs Anthony N. Ozogu and Regina O. Thomas filed
suit in Los Angeles County Superior Court against CitiMortgage, Inc. (“CitiMortgage”);
CITIMORTGAGE, INC.; Citibank, N.A. (“Citibank”); CR Title Services (“CR Title”);
First American Title Insurance Co. (“First American”); Merscorp, Inc.; Mortgage
Electronic Registration Systems, Inc. (“MERS”); Pacifica L. Nineteen, LLC (“Pacifica”);
Orion Financial Group, Inc. (“Orion”); IServe Servicing, Inc. (“iServe”); Virkam S.
Pandit; Sanjiv Das; Deepak Israni; Mike E. Wileman; Richard Cimino; R.K. Arnold;
Jennifer Welborn (erroneously sued as Jennifer Wellborn); Tameka Harris; Aaron Doty;
Pam January; Richard Martinez; J. Florez; Kristen B. Linder; and Does 1 through 15
inclusive (collectively, “defendants”). On December 16, 2010, Pacifica, iServe, Israni,
Cimino, and Welborn removed the action to federal court based on subject matter
jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1441(b).
On May 4, 2011, plaintiffs voluntarily dismissed without prejudice defendants CR
Title; First American; Merscorp, Inc.; Orion; Virkam S. Pandit; Sanjiv Das; Deepak
Israni; Mike E. Wileman; Richard Cimino; R.K. Arnold; Jennifer Welborn (erroneously
sued as Jennifer Wellborn); Tameka Harris; Aaron Doty; Pam January; Richard Martinez;
J. Florez; and Kristen B. Linder. See Dkt. 25.
On May 4, 2011, plaintiffs filed the instant ex parte application for a temporary
restraining order. On May 6, 2011, Pacifica and iServe filed an opposition to plaintiffs’
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 10-9687 CAS (AGRx)

Date

May 16, 2011

Title

ANTHONY N. OZOGU, ETC.; ET AL. v. CITIMORTGAGE, INC.; ET
AL.

application. CitiMortgage and Citibank have not opposed plaintiffs’ application. After
carefully considering the arguments set forth by both parties, the Court finds and
concludes as follows.
II.

BACKGROUND FACTS

The instant action arises from a mortgage loan transaction secured by plaintiffs’
real property located at 19322 Ackermen Avenue, Santa Clarita, California (the
“Property”). Complaint ¶ 8, Ex. 1. On December 17, 2007, Ozogu executed a
promissory note in the amount of $417,000 (“Note”) in favor of CitiMortgage.
Complaint, Ex. 1. The Note was secured with a Deed of Trust (“DOT 1”) against the
Property, executed by both Ozogu and his wife Thomas (collectively, “plaintiffs”).
Complaint, Ex. 4. The original trustee named in DOT 1 was Verdugo Trustee Services
Corporation (“Verdugo”), and MERS was the nominee beneficiary for CitiMortgage and
its assigns. Complaint, Ex. 4.
In October 2009, plaintiffs attempted to obtain a loan modification from
CitiMortgage due to “their changing financial situation and . . . hardships they were
experiencing.” Complaint ¶ 152. Plaintiffs allege that they were placed in a three month
trial modification period in November 2009, wherein their loan payments were reduced
from $2,567.94 to $1,227.00 per month. Complaint ¶ 152. Plaintiffs allege that the trial
modification period lasted five months and that they paid the reduced amount to
CitiMortgage each month. Complaint ¶ 152. Plaintiffs allege that despite accepting their
modified loan payment for March 2010, CitiMortgage ultimately rejected their
application for a more permanent loan modification in February 2010. Complaint ¶ 153.
In a letter dated April 30, 2010, CitiMortgage officially denied plaintiffs’ loan
modification request. Complaint, Ex. 16.
In an assignment of Deed of Trust dated April 16, 2010, MERS assigned all
beneficial interest under DOT 1 to “CITIMORTGAGE, INC.”1 Also on April 16, 2010,
CITIMORTGAGE, INC. substituted CR Title as trustee for Verdugo, and CR Title

1

Plaintiffs allege that CITIMORTGAGE, INC. and CitiMortgage are distinct
entities.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 10-9687 CAS (AGRx)

Date

May 16, 2011

Title

ANTHONY N. OZOGU, ETC.; ET AL. v. CITIMORTGAGE, INC.; ET
AL.

executed a Notice of Default and Election to Sell to the Property. Complaint, Exs. 6–7.
Plaintiffs allege that they received the Notice of Default and Election to Sell on April 21,
2010. Complaint ¶ 155. Plaintiffs further allege that on April 27, 2010, plaintiffs
received a letter from CitiMortgage indicating that their Workable Solution application
for internal loan modification was denied due to plaintiffs’ Net Present Value (“NPV”).
Complaint ¶ 156. Plaintiffs allege that a CitiMortgage representative named “Ginger”
with ID # GC43156 researched plaintiffs’ application and determined that CitiMortgage
did not include all of plaintiffs’ household income in its calculation of plaintiffs’ NPV.
Complaint ¶ 156. Plaintiffs allege that they wrote CitiMortgage a letter disputing
CitiMortgage’s decision to deny their application for loan modification, but that
CitiMortgage never replied. Complaint ¶ 156.
Plaintiffs allege that on May 13, 2010, a third party, Selena Davis, informed them
that CitiMortgage agreed to re-evaluate their application for a loan modification.
Complaint ¶ 160. On July 22, 2010, however, Davis informed plaintiffs that their loan
had been sold to an unknown third party. Complaint ¶ 161. The following day, Ozogu
called CitiMortgage and spoke to Kelly with ID # KC78477, who confirmed that the loan
had been sold to an undisclosed company. Complaint ¶ 161. In fact, on July 26, 2010,
CitiMortgage executed a document formally assigning DOT 1 to the new owner of the
loan, Pacifica. Complaint, Ex. 9. On August 1, 2010, plaintiffs received a letter from
CitiMortgage indicating that the new servicer for their loan was iServe. Complaint ¶ 162.
Plaintiffs allege that they applied for a loan modification with iServe. Complaint ¶
163. On September 16, 2010, Welborn, iServe’s loan counselor, contacted Ozogu and
informed him that iServe was not willing to modify the loan because CitiMortgage had
previously denied plaintiffs’ loan modification application. Complaint ¶ 165. Plaintiffs
allege that they explained to Welborn that CitiMortgage delayed re-evaluating their
application for a loan modification, but Welborn was unmoved. Complaint ¶ 165.
Nevertheless, in a telephone call on September 24, 2010, Welborn requested that
plaintiffs send her a document from CitiMortgage detailing the status of plaintiffs’
request for a loan modification. Complaint ¶ 170. Plaintiffs allege that CitiMortgage
never provided them such documentation. Complaint ¶¶ 170–72.
On September 9, 2010, an assignment of CitiMortgage’s beneficial interest under
DOT 1 to Pacifica was recorded in the Los Angeles County Recorder’s Office.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 10-9687 CAS (AGRx)

Date

May 16, 2011

Title

ANTHONY N. OZOGU, ETC.; ET AL. v. CITIMORTGAGE, INC.; ET
AL.

Complaint ¶ 247, Ex. 9. On October 4, 2010, CR Title recorded a Notice of Trustee’s
Sale in the County Recorder’s Office. Complaint, Ex. 10. According to plaintiffs, the
foreclosure sale on the property is now scheduled for May 17, 2011, at 10:30 a.m. Mot.
at 2.
III.

LEGAL STANDARD

Temporary restraining orders are governed by the same standard applicable to
preliminary injunctions. See New Motor Vehicle Bd. v. Orrin W. Fox Co., 434 U.S.
1345, 1347 n.2 (1977). A preliminary injunction is an “extraordinary remedy.” Winter
v. Natural Res. Def. Council, Inc., 555 U.S. 7, 129 S. Ct. 365, 375 (2008). The Ninth
Circuit summarized the Supreme Court’s recent clarification of the standard for granting
preliminary injunctions in Winter as follows: “[a] plaintiff seeking a preliminary
injunction must establish that he is likely to succeed on the merits, that he is likely to
suffer irreparable harm in the absence of preliminary relief, that the balance of equities
tips in his favor, and that an injunction is in the public interest.” Am. Trucking Ass’n,
Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009); see also Cal Pharms.
Ass’n v. Maxwell-Jolly, 563 F.3d 847, 849 (9th Cir. 2009) (“Cal Pharm. I”).
Alternatively, “‘serious questions going to the merits’ and a hardship balance that tips
sharply toward the plaintiff can support issuance of an injunction, assuming the other two
elements of the Winter test are also met.” Alliance for the Wild Rockies v. Cottrell, 632
F.3d 1127, 1132 (9th Cir. 2011). A “serious question” is one on which the movant “has a
fair chance of success on the merits.” Sierra On-Line, Inc. v. Phoenix Software, Inc., 739
F.2d 1415, 1421 (9th Cir. 1984).
IV.

DISCUSSION
A.

Success on the Merits/Serious Legal Questions

Plaintiffs’ 121 page complaint advances 22 separate claims for relief in 617
paragraphs.2 Based on plaintiffs’ application, it is unclear for which claims they seek a

2

Plaintiffs assert federal claims for: (1) violation of the Fair Debt Collection
Practices Act, 15 U.S.C. § 1692 et seq.; (2) disclosure violations, 15 U.S.C. § 1635 et
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 10-9687 CAS (AGRx)

Date

May 16, 2011

Title

ANTHONY N. OZOGU, ETC.; ET AL. v. CITIMORTGAGE, INC.; ET
AL.

temporary restraining order. However, it appears that plaintiffs have failed to
demonstrate a likelihood of success on the merits or serious question because there is no
showing that they have the ability to tender the requisite loan proceeds.3 See, e.g., Chen
v. PMC Bancorp, No.09cv2704-WQH-BLM, 2010 WL 596421, at *4 (S.D. Cal. Feb. 16,
2010) (“even if Plaintiffs had otherwise demonstrated a likelihood of success on their
rescission claims, the Court concludes that Plaintiffs have not demonstrated any chance
of success on the merits due to their failure to show the ability to tender.”); Montes v.
Quality Loan Serv. Corp., No. CV 09-5864 PSG (RCx), 2010 WL 114485, at *5 (C.D.
seq.; (3) missing consumer statement in violation of 12 C.F.R. § 226 et seq.; (4) failure to
disclose calculation of mortgage balance in violation of 12 C.F.R. § 226.4 et seq.; (5)
failure to disclose itemization of charges in or with the acceleration statement in violation
of 12 U.S.C. § 2610 et seq.; (6) inflation of acceleration fees in violation of 12 U.S.C. §§
2610 et seq.; (7) failure to disclose use of settlement fees in violation of Title 12,
Regulation Z, and 15 U.S.C. § 1601 et seq.; (8) failure to disclose lower interest rate in
violation of 12 U.S.C. § 2601 et seq.; (9) failure to disclose loan origination fee in
violation of 12 U.S.C. § 2601 et seq.; (10) failure to give proper notice of default, right to
cure and acceleration notice in violation of 12 U.S.C. § 2601 et seq., 15 U.S.C. § 1601 et
seq., 12 C.F.R. § 226.18, and Cal. Civ. Code § 2924 et seq.; (11) violation of Ozogu’s
constitutional right to Due Process under the Fifth Amendment; and (12) violation of
Thomas’s fundamental right to Due Process under the Fifth Amendment. Plaintiffs assert
state law claims for: (1) fraudulent inducement to breach a contract; (2) fraud in the
factum; (3) breach of the implied covenant of good faith and fair dealing; (4) wrongful
attempted foreclosure in violation of Cal. Civ. Code § 2924 et seq.; (5) to set aside
unlawful transfer against; (6) tortious interference with a contract; (7) violation of the
California Consumer Legal Remedies Act, Cal. Civ. Code §§ 1750–1784, Cal. Civ. Code
§ 1670.5; (8) violation of Cal. Bus. & Prof. Code § 17500; (9) violation of the California
Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq.; and (10) quiet title.
3

At oral argument, plaintiffs’ counsel confirmed that his clients do not have the
present ability to tender the loan proceeds or the amount to reinstate the loan. Instead,
plaintiffs’ counsel requested that the Court continue the hearing to determine whether his
clients could acquire such funds. In light of the fact that plaintiffs have delayed filing the
instant application and have submitted no evidence supporting their ability to tender, the
Court denies plaintiffs’ request to continue the hearing.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 10-9687 CAS (AGRx)

Date

May 16, 2011

Title

ANTHONY N. OZOGU, ETC.; ET AL. v. CITIMORTGAGE, INC.; ET
AL.

Cal. Jan. 5, 2010) (“Plaintiff fails to demonstrate a likelihood of success on the merits
because Plaintiff fails to allege an ability to tender the full amount of the loan.”).
B.

Undue Delay

The Court recognizes that the “loss of a home is a serious injury.” Alcaraz v.
Wachovia Mortg. FSB, 592 F. Supp. 2d 1296, 1301 (E.D. Cal. 2009). In deciding
whether to enjoin a party from foreclosing on a property, however, the Court may
consider equitable defenses, such as laches. See Ines v. Countrywide Home Loans, Inc.,
No. 08cv1267 WQH (NLS), 2008 WL 2954990, at *3 (S.D. Cal. July 28, 2008) (denying
a TRO, in part, because “Plaintiff's delay and lack of diligence in filing the Second
Application for TRO has prejudiced Defendants' ability to defend.”) (citing Apache
Survival Coalition v. OLA Cassadore Davis, 118 F.3d 663, 665–66 (9th Cir. 1997)).
Here, plaintiffs have failed to explain why they did not seek injunctive relief at an earlier
date. At a minimum, it appears that plaintiffs have been aware of defendants’ desire to
initiate foreclosure proceedings on the property for over a year.4 The Court finds that
plaintiffs unduly delayed in seeking injunctive relief and their lack of diligence has
prejudiced defendants ability to defend. Therefore, the Court finds that the instant
application for a temporary restraining order is barred by the doctrine of laches. See Ines,
2008 WL 2954990, at *3; see also Foster v. SCME Mortg. Bankers, Inc., No. CIV.
2:10-518 WBS GGH, 2010 WL 1408108, at *1 (E.D. Cal. Apr. 7, 2010) (plaintiff’s
undue delay in seeking a TRO preventing the foreclosure sale of his home constituted
laches and provided a basis for denying the TRO under E.D. Cal. R. 231(b)); Hester v.
PHH Mortg., No. 2:10-cv-01931-GEB- DAD, 2010 WL 2923495, at *4 (E.D. Cal. July
26, 2010) (same); Mammoth Specialty Lodging, LLC v. We-Ka-Jassa Inv. Fund, LLC,
No. CIV S-10-0864 LKK/JFM, 2010 WL 1539811, at *2 (E.D. Cal. Apr. 16, 2010)
(same).

4

According to the complaint, plaintiffs first received the notice of default and
election to sell on April 21, 2010. Complaint ¶ 155. Moreover, plaintiffs filed this action
more than six months ago, but only recently filed an application for a TRO.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 10-9687 CAS (AGRx)

Title

ANTHONY N. OZOGU, ETC.; ET AL. v. CITIMORTGAGE, INC.; ET
AL.

V.

Date

May 16, 2011

CONCLUSION

While plaintiffs face significant harm as a result of the foreclosure of their home,
they have not demonstrated a likelihood of success on the merits or serious legal question
with respect to their claims against defendants. Moreover, because they unduly delayed
in seeking injunctive relief, the application for a temporary restraining order is barred by
the doctrine of laches. Accordingly, the Court hereby DENIES plaintiffs’ application for
a temporary restraining order.5
IT IS SO ORDERED.
00
Initials of Preparer

:

09

CMJ

5

“When, as here, a party has not shown any chance of success on the merits, no
further determination of irreparable harm or balancing of hardships is necessary.” Global
Horizons, Inc. v. U.S. Dep’t of Labor, 510 F.3d 1054, 1058 (9th Cir. 2007).
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