Salinas et al v. Wachovia Mortgage et al

Filing 26

ORDER signed by Judge John A. Mendez on 7/26/2011 DENYING 10 plaintiffs' Motion for Preliminary Injunction. (Reader, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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MAMERTO Q. and MINDA C. SALINAS, )
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Plaintiffs,
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v.
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WACHOIVIA MORTGAGE, a division
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of WELLS FARGO BANK, N.A.; CAL- )
WESTERN RECONVEYANCE
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CORPORATION; and DOES 1-50,
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inclusive,
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Defendants.
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Case No. 2:11-CV-01220 JAM-DAD
ORDER DENYING PLAINTIFFS‟
MOTION FOR PRELIMINARY
INJUNCTION

This matter comes before the Court on Plaintiffs Mamerto Q.

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Salinas and Minda C. Salinas‟s (“Plaintiffs”) Motion for a

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Preliminary Injunction (Doc. # 10).

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division of Wells Fargo Bank, N.A. (“Defendant”) opposes the motion

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(Doc. # 17).1

Defendant Wachovia Mortgage, a

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I.

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On or about March 1, 2007, Plaintiffs obtained a $548,000.00

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FACTUAL AND PROCEDURAL BACKGROUND

adjustable rate loan from Defendant for a property in Stockton,

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This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled
for July 20, 2011.
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California.

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May 2010, the parties entered into a written forbearance agreement.

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Plaintiffs defaulted on that agreement and Defendants recorded a

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notice of default on October 27, 2010.

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By 2010, Plaintiffs began to default on the loan so in

Plaintiffs filed the instant action alleging eleven causes of

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action in the California Superior Court in the County of San

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Joaquin.

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Act, 15 U.S.C. § 1601, et seq. (“TILA”) and ten violations of

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California state law.

Plaintiffs alleged a violation of the Truth in Lending

Defendant removed the action to this Court

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and filed a Motion to Dismiss the Complaint.

Plaintiffs also filed

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this Motion for a Preliminary Injunction, requesting that the Court

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enjoin Defendant from a foreclosure sale on Plaintiffs‟ property.2

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II.

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A.

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Legal Standard
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OPINION

Preliminary Injunction

“A plaintiff seeking a preliminary injunction must establish

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that he is likely to succeed on the merits, that he is likely to

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suffer irreparable harm in the absence of preliminary relief, that

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the balance of equities tips in his favor, and that an injunction

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is in the public interest.”

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v. City of Los Angeles, 559 F.3d 1046, 1052. (9th Cir. 2009),

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quoting Winters v. Natural Resources Defense Council, Inc., 55 U.S.

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20, 374 (2008).

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///

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American Trucking Associations, Inc.

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Defendant claims the foreclosure sale will occur on July 27, 2011;
in correspondence to the Court, Plaintiff claims the foreclosure
sale will occur on July 28, 2011.
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B.

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Claims for Relief
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Likelihood of Success on the Merits

Plaintiffs are unlikely to succeed on the merits.

Plaintiffs‟

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TILA claim lacks legal support.

Plaintiffs argue that Defendant

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failed to clearly communicate the risks of the loan, but TILA does

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not require the lender to do so.

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Additionally, the TILA claim is time barred.

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limitations is one year if the plaintiff seeks damages and three

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years if the plaintiff seeks a rescission of the loan.

See, e.g., 15 U.S.C. § 1637(a).
The statute of

See 15

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U.S.C. §§ 1640(e), 1635(f).

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2007, so the TILA claim should have been asserted no later than

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March 2008 for a damages claim or March 2010 for the rescission

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claim.

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Plaintiffs‟ TILA claim is time-barred.

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Here, Plaintiffs‟ loan closed in March

Plaintiffs filed their Complaint on April 4, 2011.

Thus,

Plaintiffs‟ ten state law claims are also unlikely to succeed

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because they are all preempted by the Home Owners‟ Loan Act, 12

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U.S.C. § 1461, et seq. (“HOLA”).

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entirely based on the origination of Plaintiffs‟ mortgage loan and,

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to a lesser extent, Defendant‟s subsequent servicing of the loan.

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HOLA regulation 12 C.F.R. §§ 560.2(b)(4), (9), and (10) preempt

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claims based on the “origination,” the “terms of credit,” or

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“disclosure” regarding mortgage loans.

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§§ 560.2(b)(5), (10), and (4) preempt the servicing of the loan and

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pertain to “loan-related fees [and] charges”, “processing [or]

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servicing” and the extent the fees and charges were authorized by

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the loan‟s “terms of credit.”

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Complaint fall within one of the categories listed under 12 C.F.R.

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§ 560.2(b), “the analysis will end there; the law is preempted.”

The claims in the Complaint are

HOLA regulation 12 C.F.R.

When allegations within the

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Silvas v. E*Trade Mortgage Corp., 514 F.3d 1001, 1005 (9th Cir.

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2008).

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In addition to being preempted, the fraud claim and the

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Section 2923.5 claim are legally defective.

The statute of

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limitations for fraud is three years, so Plaintiffs‟ fraud claim

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became time-barred as of March 2010.

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§ 338(d).

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Defendant did not owe Plaintiffs any duty of care or disclosure.

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Under California law, a financial institution owes no duty of care

See Code of Civil Procedure

Furthermore, the fraud claim will not succeed because

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to a borrower when the institution‟s involvement in the loan

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transaction does not exceed the scope of its conventional role as a

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mere lender of money.

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Assn., 231 Cal.App.3d 1089, 1096 (Cal. Ct.App.3d 1991).

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the violation of Civil Code § 2923.5 claim fails because Plaintiffs

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have not alleged a credible offer to tender.

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law, „[i]n obtaining rescission or cancellation, the rule is that

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the complainant is required to do equity, as a condition to [her]

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obtaining relief, by restoring to the defendant everything of value

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which the plaintiff has received in the transaction.‟”

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Countrywide Home Loans Inc., No. 09-CV-2694, 2010 WL 2925440, *3

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(S.D. Cal. July 23, 2010), citing Fleming v. Kagan, 189 Cal.App.2d

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791 (Cal.App.2d. 1961).

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2.

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Nymark v. Heart Federal Savings & Loan
Finally,

“Under California

Davidson v.

Irreparable Harm

Clearly, the loss of a home is a serious injury.

However, “it

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is appropriate to deny an injunction where there is no showing of

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reasonable probability of success, even though the foreclosure will

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create irreparable harm, because there is no justification in

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delaying that harm where, although irreparable, it is also
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inevitable.”

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03490, 2010 WL 2923300, *8 (E.D. Cal. July 26, 2010), quoting

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Jessen v. Keystone Savings & Loan Ass‟n., 142 Cal.App.3d 454, 459

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(Cal. Ct.App.4d 1983).

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probability of success on the merits, as discussed above.

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Additionally, although foreclosure will create irreparable harm,

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foreclosure is inevitable because Plaintiffs have not repaid the

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loan nor alleged their ability to repay the loan.

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3.

Linder v. Aurora Loan Servicing, LLC, No. 2:09-CV-

Plaintiffs have not shown a reasonable

Balance of the Equities

While denying the injunction would cause Plaintiffs to lose

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their home, Defendant would conversely be injured if the

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preliminary injunction were granted because it would be forced to

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hold onto a depreciating security interest, without any ability to

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stop or slow its ongoing losses.

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unlikely to succeed and that foreclosure is inevitable, the balance

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of the equities tips towards the Defendant which should not be

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forced to hold on to depreciating property while Plaintiffs attempt

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to delay the inevitable foreclosure.

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4.

Given that Plaintiffs‟ claims are

Public Interest

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Plaintiffs, who bear the burden of demonstrating an injunction

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is in the public interest, Winter, 129 S.Ct. at 374, do not provide

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a persuasive argument that granting the injunction would further

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the public interest.

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accurately resolving ownership of real property and preventing

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improper non-judicial foreclosures, Plaintiffs do not allege that

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Defendant does not properly hold the Note or that the foreclosure

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would be improper.

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and servicing of the loan.

While there is a strong interest in

Plaintiffs‟ allegations concern the origination
Plaintiffs‟ claims are unlikely to
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succeed, as a matter of law.

Therefore, Plaintiffs fail to

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demonstrate how delaying the foreclosure would serve the public

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interest.

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III. ORDER

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For the reasons set forth above,

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Plaintiffs‟ Motion for a Preliminary Injunction is DENIED.

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IT IS SO ORDERED.

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Dated: July 26, 2011

____________________________
JOHN A. MENDEZ,
UNITED STATES DISTRICT JUDGE

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