Owens et al v. Bank of America et al

Filing 12

ORDER by Judge Edward M. Chen granting 2 Plaintiffs' Motion for TRO (emclc1, COURT STAFF) (Filed on 9/16/2011)

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1 2 3 4 5 UNITED STATES DISTRICT COURT 6 NORTHERN DISTRICT OF CALIFORNIA 7 8 JOANN R. OWENS, et al., 9 Plaintiffs, For the Northern District of California United States District Court 10 11 No. C-11-4580 EMC v. ORDER GRANTING PLAINTIFFS’ MOTION FOR TEMPORARY RESTRAINING ORDER; AND ORDER TO SHOW CAUSE BANK OF AMERICA, et al., 12 Defendants. (Docket No. 2) 13 ___________________________________/ 14 15 Plaintiffs Joann R. Owens and Larry M. Owens have filed suit against Defendants Bank of 16 America, Matrix Servicing, LLC, and J.P. Morgan Mortgage Acquisition Corp., asserting claims for, 17 inter alia, breach of contract and fraud. Currently pending before the Court is Plaintiffs’ motion for 18 a temporary restraining order, in which they seek to enjoin a foreclosure sale of their home, 19 scheduled for September 19, 2011. Having considered the papers submitted, the Court hereby 20 GRANTS Plaintiffs’ motion. 21 22 23 I. A. DISCUSSION Notice As a preliminary matter, the Court must address whether notice of Plaintiffs’ motion was 24 given to Defendants. Having reviewed the Hochhausen declaration and the supplemental 25 Hochhausen declaration, the Court finds that oral notice was given to Defendants. See Fed. R. Civ. 26 P. 65(b)(1) (referring to issuance of a TRO without written or oral notice). Moreover, both oral and 27 written notice were given to Quality Loan Services Corp., which appears to be an agent for at least 28 1 some of the defendants.1 In spite of the notice, no Defendant has indicated to Plaintiffs, either 2 directly or through Quality Loan, that they intend to oppose the request for relief. Nor has any 3 Defendant made an appearance in this action to respond to Plaintiffs’ request for a TRO. 4 B. 5 TRO Factors Preliminary injunctive relief may be issued where (1) irreparable harm is likely to result in 6 the absence of such relief, (2) serious questions going to the merits are raised, (3) the balance of 7 hardships tips sharply in the plaintiff’s favor, and (4) an injunction is in the public interest. See 8 Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1132 (9th Cir. 2011). 9 In the instant case, each of the above factors has been satisfied. As indicated above, Plaintiffs will suffer irreparable harm without a TRO because, without a TRO, their home will be 11 For the Northern District of California United States District Court 10 sold. In addition, there are serious questions going to the merits on the claim for breach of contract. 12 Although Plaintiffs appear to have returned the modification agreement in an untimely manner, see 13 Owens Decl., Ex. 1 (letter) (indicating that return within seven days from the date of the letter is 14 required or the offer “will expire automatically without further notice”), Defendants arguably 15 waived their right to challenge Plaintiffs’ late acceptance by accepting in turn – and without any 16 objection – the initial check that Plaintiffs sent as the “mortgagor contribution” as well as 17 subsequent checks that Plaintiffs sent in the amount of the modified monthly mortgage. See Owens 18 Decl. ¶¶ 11-12. Alternatively, Plaintiffs’ return of the modification agreement with their signatures 19 plausibly constituted a new offer which Defendants accepted by accepting the “mortgagor 20 contribution” check described above. Third, the balance of hardships tips sharply in Plaintiffs’ favor 21 because they face the prospect of losing their home. In contrast, Defendants contemplate only 22 monetary loss (resulting from a mere delay in sale), which can be ameliorated with the posting of an 23 undertaking. Finally, a TRO is in the public interest precisely because of the serious questions 24 raised which make the foreclosure sale questionable. 25 /// 26 /// 27 1 28 Quality Loan was listed as the entity requesting the recording of the notice of trustee’s sale. See Owens Decl., Ex. 4 (notice). 2 1 C. 2 Terms of TRO Because the above factors have been satisfied, the Court shall issue a TRO. The TRO bars 3 Defendants, as well as their agents, assigns, and those acting in concert with Defendants, from 4 selling or attempting to sell the real property owned by Plaintiffs commonly known as 220 5 Johnstone, San Rafael, California 94903. 6 The TRO is effective upon the filing of this order. By September 19, 2011, Plaintiffs shall 7 post an undertaking in the amount of $2,727.12. See Owens Decl. ¶ 12 (stating that this amount was 8 the monthly mortgage agreed upon by the parties in the October 2009 modification agreement). no later than September 20, 2011. Plaintiffs shall serve Defendants directly, and not simply through 11 For the Northern District of California The TRO, as well as Plaintiffs’ papers in support of the TRO, shall be served on Defendants 10 United States District Court 9 another entity such as Quality Loan. A proof(s) of service shall be filed by September 21, 2011. 12 13 The TRO shall expire on September 30, 2011. D. 14 Order to Show Cause Finally, Defendants are hereby ordered to show cause why a preliminary injunction should 15 not be ordered enjoining Defendants, as well as their agents, assigns, and those acting in concert 16 with Defendants, from selling or attempting to sell the real property owned by Plaintiffs commonly 17 known as 220 Johnstone, San Rafael, California 94903. 18 19 20 21 Defendants’ response to this order to show cause must be filed and served by September 26, 2011. A hearing on the order to show cause shall be held on September 30, 2011, at 1:30 p.m. in Courtroom 5, 17th floor, 450 Golden Gate Avenue, San Francisco, California 94102. 22 This order disposes of Docket No. 2. 23 IT IS SO ORDERED. 24 25 Dated: September 16, 2011 26 27 _________________________ EDWARD M. CHEN United States District Judge 28 3

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