Salinas et al v. Wachovia Mortgage et al
Filing
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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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///
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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