Kilgore v. Wells Fargo Home Mortgage et al
Filing
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ORDER GRANTING plaintiff's Motion for Preliminary Injunction pending the Court's ruling on defendants' Motion to Dismiss and ORDERING the Show Cause hearing currently set for 7/2/2012 VACATED; order signed by Chief Judge Anthony W. Ishii on 6/29/2012. (Rooney, M)
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IN THE UNITED STATES DISTRICT COURT FOR THE
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EASTERN DISTRICT OF CALIFORNIA
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MARSHA KILGORE,
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Plaintiff,
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v.
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WELLS FARGO HOME MORTGAGE, )
REGIONAL TRUSTEE SERVICES
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CORPORATION, EMMITT LEWIS
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FRED LACKER,
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Defendants.
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____________________________________)
1:12-CV- 899 AWI SMS
ORDER GRANTING PLAINTIFF’S
MOTION FOR PRELIMINARY
INJUNCTION PENDING THE
COURT’S RULING ON DEFENDANTS’
MOTIONS TO DISMISS
ORDER VACATING THE JULY 2, 2012
HEARING
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BACKGROUND
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On May 14, 2012, Plaintiff filed a complaint for damages in the Superior Court for the
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State of California, County of Fresno. Among other causes of action, the complaint contained
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causes of action for wrongful foreclosure, violations of the Truth in Lending Act, Violations of
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the Real Estate Settlement Procedures Act, Fraud, and Breach of Contract. The same day,
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Plaintiff filed an ex parte application for a temporary restraining order enjoining the sale of
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Plaintiff’s property, located at 728 East Magill Avenue, Fresno, California 93710 (“the Property).
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On May 16, 2012, the Superior Court granted Plaintiff’s motion for a temporary restraining
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order. It appears Plaintiff had until May 23, 2012 to serve a copy of the May 16, 2012 order on
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Defendants.
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Because the complaint raised causes of action brought under Federal law, on May 31,
2012, Defendant Wells Fargo Home Mortgage (“Defendant Wells Fargo”) removed this action to
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this court. In the notice of removal, Defendant Wells Fargo states that no Defendant has
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received personal service of the summons and complaint. Attached to the notice of removal are
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the May 14, 2012 complaint and a copy of the Superior Court’s docket concerning the state
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action.
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On June 11, 2012, Plaintiff filed a motion for a temporary restraining order in this court.
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Plaintiff sought an order enjoining Defendants from selling the Property.
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Defendants had neither served Plaintiff with a Notice of Default nor Notice of Sale pursuant to
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California Civil Code § 2924(b), the court granted a temporary restraining order. The court
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restrained Defendants from proceeding with the Trustee Sale. The court ordered Defendants to
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file an opposition to Plaintiff’s request for a preliminary injunction on or before June 21, 2011,
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and ordered Plaintiff to file any reply by June 26, 2012.
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motion for a preliminary injunction for July 2, 2012.
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Finding evidence that
The court set a hearing on Plaintiff’s
LEGAL STANDARD
A plaintiff seeking a preliminary injunction must establish: (1) that she is likely to
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succeed on the merits, (2) that she is likely to suffer irreparable harm in the absence of
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preliminary relief, (3) that the balance of equities tips in her favor, and (4) that an injunction is in
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the public interest. Winter v. Natural Res. Def. Council, Inc., 129 S.Ct. 365, 374 (2008); Park
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Vill. Apt. Tenants Ass'n v. Mortimer Howard Trust, 636 F.3d 1150, 1160 (9th Cir. 2011). “In
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each case, courts must balance the competing claims of injury and must consider the effect on
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each party of the granting or withholding of the requested relief.” Indep. Liv. Cntr. of Southern
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Cal., Inc. v. Maxwell-Jolly, 572 F.3d 644, 651 (9th Cir. 2009) (quoting Winter, 129 S.Ct. at 376)
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(internal quotation marks omitted)).
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DISCUSSION
Plaintiff requests that the court enjoin the sale of her residence until the merits of her
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action for wrongful foreclosure, along with allegations of fraud and violations of Federal law can
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be determined. In California, upon default by the trustor, the beneficiary may declare a default
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and proceed with a nonjudicial foreclosure sale. The foreclosure process is commenced by the
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recording of a notice of default and election to sell by the trustee. After the notice of default is
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recorded, a notice of sale must be published, posted and mailed 20 days before the sale and
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recorded 14 days before the sale. See Moeller v. Lien, 25 Cal.App.4th 822, 830 (1994).
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California Civil Code Sections 2924 through 2924k provide a comprehensive framework for the
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regulation of a nonjudicial foreclosure sales pursuant to a power of sale contained in a deed of
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trust. California Golf, L.L.C. v. Cooper, 163 Cal.App.4th 1053, 1070 (2008). Absent any
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evidence to the contrary, a nonjudicial foreclosure sale is presumed to have been conducted
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regularly and fairly. Civ.Code, § 2924. However, irregularities in a nonjudicial trustee's sale
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may be grounds for setting it aside if they are prejudicial to the party challenging the sale. Lo v.
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Jensen, 88 Cal.App.4th 1093, 1097–98 (2001.)
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The court finds that a preliminary injunction is warranted at least until such time as the
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court can determine if the complaint states claim for violation of federal law. Plaintiff provides
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evidence that she did not breach any obligation to Defendants because, at the time Defendants
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filed notices of default and sale, she was current with the payments on her note. See Cal. Civ.
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Code § 2924. To counter Plaintiff’s declaration and verified complaint, Defendants have
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provided the declaration of Michael Dolan, Wells Fargo Operations Analyst, stating that he has
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reviewed Plaintiff’s payment history and no payments have been made since October 2010.
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Despite the necessity of resolving this specific dispute, no party has provided the court with any
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accounting records to verify their broad assertion. As such, at this preliminary stage of the
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proceedings, it is difficult for the court to resolve the conflicting issue of whether Plaintiff was
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delinquent on her payments.
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At this time, court has Plaintiff stating under penalty of perjury that she was not in default
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on her loan obligations. Weighing the competing interests, the court finds an injunction is
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warranted until the court can determine whether Plaintiff has even stated federal causes of action.
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If the court does not issue a preliminary injunction, plaintiff's home is likely to be sold. The loss
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of one's personal residence is an irreparable harm. See, e.g., Sundance Land Corp. V.
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Community First Federal Sav. And Loan Ass'n., 840 F.2d 653 (9th Cir. 1988) (loss of real
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property, because it is unique, is an irreparable injury).
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suffer hardship if they are not permitted to foreclose on the Property, the court finds that
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While Defendants argue that they will
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postponing the foreclosure until further evidence can be reviewed is not an undue hardship,
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especially when compared with Plaintiff's risk of losing her home in a foreclosure sale. Finally,
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it is in the public interest to require lenders to comply with California statutes enacted to protect
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homeowners from unnecessary foreclosures.
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weighs in favor of granting Plaintiff’s preliminary injunction.
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Thus, the court finds that the public interest
Defendants’ motion to dismiss is scheduled to be heard on July 23, 2012. Given the
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disputed issue of fact on whether Plaintiff even defaulted on her payment obligations, the court
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finds there is little harm to Defendants if this court restrains them from selling the Property until
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July 23, 2012. Defendants’ interests remain secured by the Deed of Trust.
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CONCLUSION AND ORDER
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Plaintiff moves for a preliminary injunction that would restrain Defendants from
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conducting a trustee sale on the Property. After considering the motion, Plaintiff has sufficiently
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established a likelihood of success, irreparable injury, and that the balance of hardships and
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public interest weigh in her favor. In the light of the disputed issue of fact on whether Plaintiff
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has defaulted on her payments, the court finds the previously set hearing date of July 2, 2012
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would not assist the court at this time.
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Accordingly, IT IS HEREBY ORDERED that:
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Plaintiff’s motion for a preliminary injunction is GRANTED;
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2.
Defendants are RESTRAINED from proceeding with the Trustee Sale until after
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July 23, 2012; and
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The July 2, 2012 hearing is VACATED.
IT IS SO ORDERED.
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Dated:
9h0d30
June 29, 2012
CHIEF UNITED STATES DISTRICT JUDGE
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