Singh v. Bank of America, N.A. et al

Filing 11

ORDER signed by Chief Judge Morrison C. England, Jr on 4/24/13 GRANTING 5 MOTION for TEMPORARY RESTRAINING ORDER and scheduling hearing re 9 Motion for Preliminary Injunction. The Court now ORDERS defendant to cancel the sale scheduled to ta ke place on 4/22/13. Hearing on Plaintiff's Motion for Preliminary Injunction is hereby scheduled for 4/29/2013 at 10:00 AM in Courtroom 7 (MCE) before Chief Judge Morrison C. England Jr. Plaintiff's Motion shall not be filed later than 4/24/13 and defendant's Opposition shall be filed not later than 4/25/13. Any reply shall be filed not later than 4/26/13. (Meuleman, A)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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KEVIN SINGH,
Plaintiff,

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v.

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No. 2:13-cv-00729-MCE-AC

MEMORANDUM AND ORDER

BANK OF AMERICA, N.A.,
RECONTRUST COMPANY,
Defendant.

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On April 16, 2013, Kevin Singh (“Plaintiff”) filed an “Application for Temporary

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Restraining Order” (“TRO”) seeking a Court order preventing Bank of America

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(“Defendant”) from selling Plaintiff’s home on April 22, 2013. (ECF No. 5.) Prior to the

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TRO hearing, the Court ordered Plaintiff’s counsel to notify all other parties of the

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hearing and file proof of notice. (ECF No. 7.) Plaintiff’s counsel complied and filed a

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Notice of Hearing, but Defendants failed to appear at the April 17, 2013, hearing. (ECF

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No. 8.) In open court and on the record, the Court granted Plaintiff’s request for a TRO,

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which will remain in effect until the date of the hearing for a Preliminary Injunction which

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is set for April 29, 2013 at 10:00 AM. The Court granted Plaintiff’s Request for the TRO

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for the reasons described below.

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STANDARD

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The purpose of a temporary restraining order is to preserve the status quo

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pending the complete briefing and thorough consideration contemplated by full

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proceedings pursuant to a preliminary injunction. See Granny Goose Foods, Inc. v.

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Teamsters, 415 U.S. 423, 438-39 (1974) (temporary restraining orders “should be

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restricted to serving their underlying purpose of preserving the status quo and preventing

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irreparable harm just so long as is necessary to hold a hearing, and no longer”); see also

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

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Cate, No. CIV 08-873-NVW, 2010 WL 1558562, at *1 (E.D. Cal. April 19, 2010).
Issuance of a temporary restraining order, as a form of preliminary injunctive

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relief, is an extraordinary remedy, and Plaintiffs have the burden of proving the propriety

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of such a remedy. See Mazurek v. Armstrong, 520 U.S. 968, 972 (1997). In general,

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the showing required for a temporary restraining order and a preliminary injunction are

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the same. Stuhlbarg Int’l Sales Co., Inc. v. John D. Brush & Co., Inc., 240 F.3d 832, 839

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n.7 (9th Cir. 2001).
The party requesting preliminary injunctive relief must show that “he is likely to

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succeed on the merits, that he is likely to suffer irreparable harm in the absence of

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

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the public interest.” Winter v. Natural Resources Defense Council, 555 U.S. 7, 20

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(2008); Stormans, Inc. v. Selecky, 586 F.3d 1109, 1127 (9th Cir. 2009) (quoting Winter).

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The propriety of a TRO hinges on a significant threat of irreparable injury that must be

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imminent in nature. Caribbean Marine Serv. Co. v. Baldridge, 844 F.2d 668, 674 (9th

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Cir. 1988).

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Alternatively, under the so-called sliding scale approach, as long as the Plaintiffs

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demonstrate the requisite likelihood of irreparable harm and show that an injunction is in

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the public interest, a preliminary injunction may issue so long as serious questions going

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to the merits of the case are raised and the balance of hardships tips sharply in Plaintiffs’

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favor. Alliance for Wild Rockies v. Cottrell, 632 F.3d 1127, 1131-36 (9th Cir. 2011)

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(concluding that the “serious questions” version of the sliding scale test for preliminary

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injunctions remains viable after Winter).

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ANALYSIS

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Plaintiff owns real property and improvements thereon located in West

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Sacramento, California, which is located within the Eastern District of California

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(hereinafter referred to as “the property” unless specified otherwise). The property was

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purchased by Plaintiff with a loan obtained through Defendant and evidenced by a

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promissory note. (ECF No. 5-2.) The promissory note is secured by a deed of trust

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which is recorded against the property. Plaintiff defaulted on the loan in 2008. (Id.) In

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2012, Plaintiff and Defendant began negotiating a modification of the loan that would

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allow plaintiff to remain current on his obligation. (Id.) During the negotiations, Plaintiff

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provided Defendant detailed information about Plaintiff’s financial situation in exchange

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for the possibility of a lower monthly payment and interest rate. As stated in open court

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at the TRO hearing, Defendant has not made a written determination as to whether

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Plaintiff qualifies for a loan modification. (Id.) Instead, Defendant has repeatedly failed

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to respond to Plaintiffs inquiries about the status of the loan modification with “passing

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the buck by bank representatives, who transferred his calls repeatedly to different people

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in different departments within the bank.” (ECF No. 1.) Even though Plaintiff and

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Defendant were negotiating a loan modification, Defendant went ahead with the

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foreclosure process.

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Defendant and other lenders’ practice of negotiating with homeowners in default

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on their loans for a loan modification while simultaneously advancing the foreclose

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process is commonly referred to as “dual tracking.” Dual tracking has been heavily

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criticized by both state and federal legislators. In July 2012, California passed legislation

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referred to as “The California Homeowner Bill of Rights” which prohibits dual tracking.

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As of January 1, 2013, “The California Homeowner Bill of Rights went into effect and it

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offers homeowners greater protection during the foreclosure process. Cal. Civ. Code

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§ 2923.6(b) (2013). Section 2923.6(b) states “it is the intent of the legislature that the

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mortgage servicer offer the borrower a loan modification or work out a plan if such a

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modification or plan is consistent with its contractual or other authority.” The statute

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further provides that “if a borrower submits a complete application for a first lien loan

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modification . . . the mortgage servicer . . . shall not record a notice of default or notice of

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sale, or conduct a trustee’s sale, while the complete first lien loan modification

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application is pending.” Cal. Civ. Code § 2923.6(c) (2013).

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At the hearing, the Court inquired of Plaintiff’s counsel whether Defendant ever

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responded to Plaintiff’s complete application for a first lien loan modification. Plaintiff

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submitted a Declaration which stated in part, “I never received written notice or

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confirmation or anything whatsoever to state or indicate that I did not qualify for a loan

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modification.” (ECF No. 10.) Because Defendant has failed to respond to Plaintiff’s

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application for a first lien loan modification after January 1, 2013, section 2923.6 applies

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to this case and prevents Defendant from conducting a trustee’s sale while Plaintiff’s

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application for a first lien loan modification is pending.

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Accordingly, Plaintiff has adequately shown he is likely to succeed on the merits

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in light of California’s new Homeowners’ Bill of Rights. Plaintiff has also met the

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remaining factors of the TRO standard. Plaintiff has demonstrated that Plaintiff will

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suffer “irreparable harm” if he loses his home because “[he] and [his] family will have

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nowhere to go and nowhere to stay. . . [his] children will need to leave their schools.”

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(ECF No. 5-2.)
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Further, the balance of equities tips in Plaintiffs’ favor as a TRO merely delays

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Defendant’s right to foreclose. Finally, an injunction is in the public’s interest as it

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enforces a recently enacted law designed to protect the public.

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CONCLUSION

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Accordingly, to preserve the status quo until the hearing on Plaintiff’s Motion for

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Preliminary Injunction can be had, the Court now orders Defendant to cancel the sale

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scheduled to take place on April 22, 2013. A hearing on Plaintiff’s Motion for Preliminary

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Injunction is hereby scheduled at 10:00 AM on Monday, April 29, 2013, in Courtroom 7

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before Chief Judge Morrison C. England, Jr. Plaintiff’s Motion shall not be filed later than

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April 24, 2013 and Defendant’s Opposition shall be filed not later than April 25, 2013.

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Any reply shall be filed not later than April 26, 2013.

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IT IS SO ORDERED.
DATE: April 24, 2013

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MORRISON C. ENGLAND, JR., CHIEF JUDGE
UNITED STATES DISTRICT COURT

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