McMahon v. JPMorgan Chase Bank, N.A. et al

Filing 65

ORDER signed by District Judge John A. Mendez on 08/24/17 ORDERING that the 47 Motion to Dissolve the 17 Preliminary Injunction is GRANTED. (Benson, A.)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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GORDON MCMAHON, an
individual;

No.

2:16-cv-1459-JAM-KJN

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Plaintiff,
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ORDER GRANTING DEFENDANT’S
MOTION TO DISSOLVE PRELIMINARY
INJUNCTION

v.
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JPMORGAN CHASE BANK, N.A.;
SELECT PORTFOLIO SERVICING,
INC.; and DOES 1 through 10
inclusive,

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Defendants.

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On August 23, 2016, this Court enjoined Defendant Select

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Portfolio Servicing (“SPS”) from conducting a foreclosure sale of

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304 Seawind Drive in Vallejo, California.

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No. 17.

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to Dissolve Prelim. Inj. (“Mot.”), ECF No. 47.

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McMahon (“McMahon”) opposes the motion.

8/23/2016 Order, ECF

SPS now asks the Court to dissolve the injunction.

Mot.

Plaintiff Gordon

Opp’n, ECF No. 60. 1

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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 11, 2017.
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I.

FACTS AND PROCEDURAL BACKGROUND

McMahon defaulted on his mortgage in 2007.

First Amended

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Complaint (“FAC”) ¶ 1, ECF No. 26.

McMahon applied for a loan

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modification several times.

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servicer, denied McMahon’s applications.

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86, 99, 101, 103.

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including his first cause of action for violation of the

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Homeowners Bill of Rights (“HBOR”) under California Civil Code

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Section 2924.12.

FAC ¶ 1.

SPS, McMahon’s loan
FAC ¶¶ 60, 61, 70, 81,

McMahon sued SPS, alleging six claims,

FAC at 19.

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McMahon moved for a preliminary injunction under Section

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2924.12 of the HBOR, which states that “[i]f a trustee’s deed

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upon sale has not been recorded, a borrower may bring an action

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for injunctive relief to enjoin a material violation of Section

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. . . 2923.6.”

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oppose the motion.

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Court enjoined SPS from proceeding with foreclosure “until there

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has been compliance with California Civil Code section[s] 2923.6

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and 2924.12.”

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Cal. Civ. Code § 2924.12(a)(1).

SPS did not

See Adviento Decl. ¶ 4, ECF No. 13.

The

8/23/2016 Order at 1.

On November 25, 2016, McMahon submitted another loan

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modification application, which SPS denied.

FAC ¶¶ 102, 103.

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SPS then moved to dismiss McMahon’s claims.

Mot. to Dismiss, ECF

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No. 30.

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4/26/2017 Order at 4-6, 13.

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reconsider that ruling, which the Court denied.

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at 6, ECF No. 64.

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The Court dismissed McMahon’s HBOR claim with prejudice.

II.

McMahon moved the Court to
8/24/2017 Order

OPINION

A district court has ‘wide discretion’ to dissolve, modify,
or reconsider a preliminary injunction based on a change in
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factual or legal circumstances.

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Inc., 284 F.3d 1091, 1098 (9th Cir. 2002).

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an injunction under Section 2924.12(a)(1), the “enjoined entity

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may move to dissolve [the] injunction based on a showing that the

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material violation has been corrected and remedied.”

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Code § 2924.12(a)(2).

A&M Records, Inc. v. Napster,
If a court has issued

Cal. Civ.

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A.

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The Court has dismissed with prejudice McMahon’s HBOR

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claims.

Change in Legal Circumstances

4/26/2017 Order at 4-6, 13.

The preliminary injunction

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was issued pursuant to Section 2924.12(a)(1) and conditioned

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upon SPS’s compliance with Section 2923.6.

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1-2.

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under which McMahon moved for the preliminary injunction, the

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injunction can no longer stand.

8/23/2016 Order at

Because the Court has dismissed with prejudice the claim

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B.

Remedy of Alleged Violation

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SPS has also submitted evidence demonstrating that “the

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loan modification process has been completed twice during the

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pendency of the litigation.”

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subsequent loan modification reviews complied with 2923.6 and

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2924.12, therefore warranting dissolution of the injunction.

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Mot. at 5.

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mumerous documents that clearly demonstrate that it has

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considered and denied two additional applications from McMahon.

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Adelman Decl., ECF No. 47-2.

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Mot. at 6.

SPS argues these two

SPS supports this argument with a declaration and

McMahon responds that the Court should not dissolve the

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injunction because SPS has not complied with Section

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2923.6(f)(2), which requires that a servicer denying a loan

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modification “based on investor disallowance” provide “the
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specific reasons for the investor disallowance.”

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§ 2923.6(f)(2).

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sufficient to show that SPS did not comply with Section 2923.6

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because any failure to provide specific reasons for investor

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denial was immaterial in light of the many other reasons SPS

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denied McMahon’s application.

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Cal. Civ. Code

SPS responds that McMahon’s argument is not

Mot. at 6.

Under the HBOR, a borrower is entitled to an injunction

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only for a “material” violation.

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§ 2924.12(a)(1).

Cal. Civ. Code

An HBOR violation is material if “any such

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violation prejudiced [the plaintiff’s] ability to obtain a loan

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modification.”

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2353 MMC, 2015 WL 13425101, at *1 (N.D. Cal. Jul. 17, 2015).

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McMahon’s only argument for materiality is that “based on the

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U.S. Treasury online NPV calculator, Plaintiff qualifies for a

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HAMP modification.”

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cites to support this contention, however, explicitly states

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“you may be eligible for a HAMP modification” and

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“CheckMyNPV.com provides only an estimate of a servicer’s NPV

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evaluation.”

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added).

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motion for reconsideration, ECF No. 64, McMahon cannot show

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materiality by citing to a website that explicitly indicates its

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results are an estimate and may differ from the lender’s

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results.

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Castillo v. Wells Fargo Bank, N.A., No. C-15-

Opp’n at 10.

The exhibit that McMahon

McMahon Decl., Exh. 6 at 1, ECF 33-2 (emphasis

As discussed in the Court’s order denying McMahon’s

McMahon has no remaining HBOR claims that entitle him to

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injunctive relief and SPS has shown that it has materially

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complied with the HBOR.

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and dissolves the preliminary injunction issued on August 23,

The Court therefore grants SPS’s motion

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2016.

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III.

ORDER

For the reasons set forth above, the Court GRANTS SPS’s
motion to dissolve the August 23, 2016 preliminary injunction.

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IT IS SO ORDERED.

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Dated: August 24, 2017

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