Javier Ayala et al v. Pacific Coast National Bank et al

Filing 11

ORDER DENYING PLAINTIFFS EX PARTE APPLICATION FOR A TEMPORARY RESTRAININGORDER 10 by Judge Otis D. Wright, II. (SEE DOCUMENT FOR FURTHER DETAILS) (vv)

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United States District Court
Central District of California

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JAVIER AYALA; MARTHA AYALA,
Plaintiffs,

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Case № 5:16-cv-00723-ODW (JEM)

v.

ORDER DENYING PLAINTIFF’S

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PACIFIC COAST NATIONAL BANK;

EX PARTE APPLICATION FOR A

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SUNWEST BANK; THE WOLF FIRM;

TEMPORARY RESTRAINING

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ADOLFO SEDENO; JOYCE COOPER;

ORDER [10]

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and DOES 1-100, inclusive,

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Defendants.

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I.

INTRODUCTION

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On April 26, 2016, Plaintiffs Javier Ayala and Martha Ayala applied ex parte

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for a temporary restraining order enjoining Defendants from foreclosing on a house

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and vacant lot that they own. Plaintiffs did not serve their application on Defendants,

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who have not appeared in the action. For the reasons discussed below, the Court

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DENIES Plaintiffs’ application. (ECF No. 10.)

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II.

FACTUAL BACKGROUND

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Plaintiffs are the owners of a house and a vacant lot in Indio, California.

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(Compl. ¶¶ 1–2.) Plaintiffs, who allegedly do not read or write English, were asked

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by Defendant Adolfo Sedeno to co-sign a loan for a business he was starting. (Id.

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¶ 15.) It appears that Plaintiffs co-signed said loan, and also signed a deed of trust

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transferring legal title of their home to Defendant Pacific Coast National Bank as

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trustee for the purpose of securing the loan. (Mot. at Exs. 1, 2.) Defendant Joyce

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Cooper notarized the deed of trust.

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Plaintiffs make conflicting allegations as to their understanding of what they

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were signing. Plaintiffs first allege that they “never went to any banks or spoke to any

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loan officers and never submitted any loan applications,” yet in the next paragraph

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allege that they understood that “they were going to co-sign for Defendant Sedeno to

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receive a loan.” (Compl. ¶¶ 16, 17.) Plaintiffs then state that their signatures on some

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of the loan documents were actually forged, and that the “transaction . . . was procured

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through fraud.” (Mot. 4.)

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Presumably after either Plaintiffs or Defendant Sedeno defaulted on the loan,

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Defendants Pacific Coast National Bank and SunWest Bank then attempted to

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foreclose on their properties.

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attempted to secure a loan modification from Defendants, but Defendants rejected

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their requests. (Id. ¶ 29.)

(Id. ¶¶ 21–25.)

To avoid foreclosure, Plaintiffs

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On April 19, 2016, Plaintiffs filed this action. Plaintiffs assert eight state law

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causes of action and two federal causes of action. The two federal causes of action are

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for violation of the Fair Debt Collection Practices Act, and violation of the Real Estate

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Settlement Procedures Act.

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application for a temporary restraining order, seeking to enjoin a foreclosure that is

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scheduled to go forward on April 27, 2016. (ECF No. 10.) That ex parte application

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is now before the Court for consideration.

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III.

On April 26, 2016, Plaintiffs filed this ex parte

LEGAL STANDARD

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“The standard for issuing a temporary restraining order is identical to the

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standard for issuing a preliminary injunction.” Lockheed Missile & Space Co. v.

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Hughes Aircraft Co., 887 F. Supp. 1320, 1323 (N.D. Cal. 1995). A court may only

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grant such relief “upon a clear showing that the plaintiff is entitled to such relief.”

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Winter v. Nat’l Res. Def. Council, Inc., 555 U.S. 7, 22 (2008). To prevail, the moving

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party must show: (1) a likelihood of success on the merits; (2) a likelihood that the

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moving party will suffer irreparable harm absent preliminary injunctive relief; (3) that

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the balance of equities tips in the moving party’s favor; and (4) that preliminary

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injunctive relief is in the public interest (the “Winter factors”). Id. at 20. “Under

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Winter, plaintiffs must establish that irreparable harm is likely, not just possible, in

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order to obtain a preliminary injunction.” Alliance for the Wild Rockies v. Cottrell,

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632 F.3d 1127, 1132 (9th Cir. 2011) (original emphasis).

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“‘serious questions going to the merits’ and a hardship balance that tips sharply

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toward the plaintiff can [also] support issuance of an injunction, assuming the other

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two elements of the Winter test are also met.” Id. at 1132, 1135 (holding that the

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“sliding scale” test remains viable “so long as the plaintiff also shows that there is a

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likelihood of irreparable injury and that the injunction is in the public interest”).

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IV.
A.

In the Ninth Circuit,

DISCUSSION

Notice
Plaintiffs have not filed a proof of service showing that they served this

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application on Defendants.

“The court may issue a temporary restraining order

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without written or oral notice to the adverse party or its attorney only if: (A) specific

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facts in an affidavit or a verified complaint clearly show that immediate and

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irreparable injury, loss, or damage will result to the movant before the adverse party

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can be heard in opposition; and (B) the movant’s attorney certifies in writing any

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efforts made to give notice and the reasons why it should not be required.” Fed. R.

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Civ. P. 65(b)(1). That is, an ex parte TRO is generally appropriate when “notice to the

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defendant would render fruitless the further prosecution of the action.” Reno Air

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Racing Ass’n, Inc. v. McCord, 452 F.3d 1126, 1131 (9th Cir. 2006).

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Here, Plaintiffs’ counsel has not stated what efforts, if any, he has made to serve

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this application on Defendants. Nor would there appear to be any excuse for not

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doing so; indeed, Plaintiffs’ counsel contacted Defendants to request that they

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continue the very foreclosure that they now seek to enjoin. (Aldana Decl. ¶ 7, ECF

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No. 10.) Finally, Plaintiffs give no reason at all why notice to Defendant should not

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be required. Plaintiffs thus have not met the requirements of Rule 65(b). This is an

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independent ground for denying Plaintiffs’ TRO request.

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B.

Winter Factors

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The Court finds that Plaintiffs have demonstrated neither a likelihood of

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prevailing on the merits, nor that the equities are in their favor. Plaintiffs thus have

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not satisfied the Winter test.

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Likelihood of Prevailing on Merits

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The Court is unpersuaded that Plaintiffs are likely to prevail on the merits of

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their claims. District courts have uniformly held that foreclosure on a mortgage or

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deed of trust is not a collection of debt covered by the Fair Debt Collection Practices

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Act. See, e.g., Hulse v. Ocwen Fed. Bank, FSB, 195 F. Supp. 2d 1188, 1204 (D. Or.

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2002) (“[T]he activity of foreclosing on the property pursuant to a deed of trust is not

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the collection of a debt within the meaning of the FDCPA.”); Smith v. Cmty. Lending,

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Inc., 773 F. Supp. 2d 941, 944 (D. Nev. 2011); Odinma v. Aurora Loan Servs., No. C-

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09-4674 EDL, 2010 WL 2232169, at *11 (N.D. Cal. June 3, 2010) (collecting cases);

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Jozinovich v. JP Morgan Chase Bank, N.A., No. C09-03326 TEH, 2010 WL 234895,

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at *6 (N.D. Cal. Jan. 14, 2010).

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As to the Real Estate Settlement Procedures Act claim, it does not appear that

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the Act provides for injunctive relief, and therefore cannot be used to enjoin (even

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temporarily) the impending foreclosure. Rivera v. BAC Home Loans Servicing, L.P.,

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No. C 10-02439 RS, 2010 WL 2757041, at *4 (N.D. Cal. July 9, 2010). Moreover,

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claims under 12 U.S.C. § 2605 are subject to a three-year statute of repose, see 12

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U.S.C. § 2614, and here it has been almost eight years since Defendants allegedly

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failed to make the disclosures required by the Act.

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The remaining claims are state law claims. Not only do the state law claims

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clearly predominate in this action, but the federal claims are very likely subject to

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dismissal. As a result, this Court lacks subject matter jurisdiction over the state law

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claims. See 28 U.S.C. § 1367(c)(2), (3); United Mine Workers of Am. v. Gibbs, 383

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U.S. 715, 727 (1966).

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2.

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The Court is also unconvinced that the equities are in Plaintiffs’ favor. The

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numerous contradictory assertions and allegations in both their Complaint and ex

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parte application suggest that Plaintiffs are not being truthful. For example, Plaintiffs

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appear to concede that they knew they were going to co-sign a loan for Defendant

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Sedeno, yet later assert that they had no idea what they were signing. Similarly, while

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Plaintiffs assert that the loan documents and deed of trust were not signed by them and

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were fraudulently procured, they were apparently willing to negotiate a modification

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to that very loan. While Plaintiffs suggest that they did so simply in an attempt to

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save their home from foreclosure, it is difficult to believe that they would agree to pay

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what effectively would be a whole new mortgage rather than just file suit for fraud.

Equities

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V.

CONCLUSION

For the reasons discussed above, the Court DENIES Plaintiffs’ Ex Parte
Application for a Temporary Restraining Order. (ECF No. 10.)

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IT IS SO ORDERED.

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April 27, 2016

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____________________________________
OTIS D. WRIGHT, II
UNITED STATES DISTRICT JUDGE

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