Thomas v. Deutsche Bank National Trust as Trustee for Securitized Trust et al

Filing 9

ORDER by Judge Charles R. Breyer denying 3 Motion for TRO. (crblc2, COURT STAFF) (Filed on 3/9/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

United States District Court
For the Northern District of California

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JEFFREY THOMAS,

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Plaintiff,

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DEUTSCHE BANK NATIONAL TRUST, et
al.,
Defendants.

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ORDER DENYING EX PARTE
APPLICATION FOR TEMPORARY
RESTRAINING ORDER

v.

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No. C 12-00472 CRB

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Plaintiff Jeffrey Thomas filed a complaint against Deutsche Bank National Trust and
other banking defendants (“Defendants”) alleging several claims arising out of the attempted
foreclosure of his home. Dkt. 1. He then filed an ex parte application for a temporary
restraining order enjoining defendants from going ahead with the scheduled Trustee’s sale of
his home, set for March 16, 2012. Dkt. 3. Plaintiff argues that his Note was securitized and
sold, and Wells Fargo Bank, N.A. no longer has any legal relationship to the loan or the
Plaintiff. Mot. at 2. Since Defendants providing documentation refuting this point, while
Plaintiff provided no evidence, along with Plaintiff’s long delay in seeking injunctive relief,
the Court DENIES the motion for a temporary restraining order.
I.

FACTUAL BACKGROUND
In 2007, Plaintiff obtained a $472,500.00 mortgage loan from World Savings Bank,

FSB (“World Savings”), evidenced by a Note and secured by a Deed of Trust to Plaintiff’s
property located at 31306 San Andreas Drive, Union City, California 94587 (the “Property”).

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Compl. (dkt. 1) ¶¶ 11, 16, 17; Defendants’ Request for Judicial Notice (dkt. 7-1) Ex. A.1

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World Savings was the original beneficiary under the Deed of Trust. RJN Ex. A. Plaintiff

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alleges World Savings sold the Note on April 3, 2007, to the World Savings Bank REMIC,

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of which Deutsche Bank National Trust is the Trustee. In support of this allegation, Plaintiff

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cites to World Savings’ parent corporation’s 10-K, which Plaintiff alleges states generally

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“We often securitized our portfolio loans into mortgage-backed securities . . . . Securitization

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activity for the year . . . amount to $34.3 billion . . . .”2 The recorded documents with respect

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to the Property do not contain any assignment of the Deed of Trust from World Savings to

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any other entity. Hasenkampf Decl. ¶¶ 2-3; RJN Ex. A.

United States District Court
For the Northern District of California

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On January 1, 2008, World Savings Bank, FSB changed its name to Wachovia

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Mortgage, FSB. Dolan Decl. ¶ 3. On November 1, 2009, Wachovia Mortgage, FSB changed

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its name to Wells Fargo Bank Southwest, N.A., and then merged into and became a division

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of Wells Fargo. Id. Thus, it appears from the document that Wells Fargo is the current

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beneficiary under the Deed of Trust.

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On February 4, 2010, ETS Services, LLC (“ETS”), as agent for beneficiary Wells

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Fargo, recorded a Notice of Default with respect to the Property. RJN Ex. B. The Notice of

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Default was based on Plaintiff’s failure to make his loan payment due on July 15, 2009, and

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all subsequent payments thereafter. Id. On May 7, 2010, Wells Fargo recorded a

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Substitution of Trustee substituting ETS as Trustee under the Deed of Trust. RJN Ex. C.

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Subsequently, also on May 7, 2010, ETS recorded a Notice of Trustee’s Sale with respect to

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The Court GRANTS Defendants’ Request for Judicial Notice because the documents are public
records “capable of accurate and ready determination by resort to sources whose accuracy cannot be
reasonably questioned.” Fed. R. Evid. 201(b)(2).
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This statement comes from the only evidence Plaintiff attached to his application, a declaration
of Plaintiff’s counsel that attaches “the Securitization Audit performed on Thomas’ loan.” Yesk Decl.
(dkt. 3-1). This attachment is the affidavit of Teri L. Petit, a “Forensic Loan Auditor” in Illinois. Yesk
Decl. Ex. A. It does not appear from the affidavit that Ms. Petit has personal knowledge of the facts
attested to, as required by Federal Rule of Evidence 602 (“A witness may testify to a matter only if
evidence is introduced sufficient to support a finding that the witness has personal knowledge of the
matter.”). Thus, the Court does not give weight to this affidavit. This is aside from the fact that
Plaintiff’s counsel failed to file the actual supporting exhibits to the affidavit with his declaration, and
the fact that the “supporting documents” do not relate to the specific loan at issue (e.g., the general
statement regarding securitization in the 10-K), and are not even currently available (e.g., a dead link
to a Reuters article).
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the property. RJN Ex. D. A second Notice of Trustee’s Sale was recorded with respect to

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the Property on June 16, 2011. RJN Ex. E. Plaintiff did not appear to raise any objections to

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these notices, or the rights of Wells Fargo with respect thereto, until filing his Complaint on

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January 30, 2012. He then moved for an ex parte temporary restraining order on February

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29, 2012.

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II.

LEGAL STANDARD
The standard for issuing a preliminary injunction is well established, and mirrors that

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for a temporary restraining order. Stuhlberg Int’l Sales Co., Inc. v. John D. Brush & Co.,

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Inc., 240 F.3d 832, 839 n.7 (9th Cir. 2001). “[I]njunctive relieve [is] an extraordinary

United States District Court
For the Northern District of California

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remedy that may only be awarded upon a clear showing that the [movant] is entitled to such

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relief.” Winter v. Natural Res. Defense Council, Inc., 555 U.S. 7, 22 (2008). The party

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seeking relief must demonstrate that: (1) it is likely to succeed on the merits; (2) it is likely to

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suffer irreparable harm absent relief; (3) the balance of equities tips in its favor; and (4) the

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requested relief is in the public interest. Id. at 20. Under the Ninth Circuit’s “sliding scale”

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approach, the first and third elements can be balanced such that “serious questions” going to

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the merits and a balance of hardships that “tips sharply” towards the movant is sufficient so

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long as the other two elements are met. Alliance for the Wild Rockies v. Cottrell, 632 F.3d

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1127, 1134-35 (9th Cir. 2011).

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III.

DISCUSSION

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Plaintiff fails to raise serious questions on the merits, nor to demonstrate a likelihood

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of irreparable harm, thus he fails to meet the requirements for a temporary restraining order.

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Plaintiff’s main argument for why the foreclosure cannot go forward is that the loan

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was securitized, and therefore, Wells Fargo does not have authority to foreclose. California

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Civil Code section 2924, et seq. create a framework for regulation of non-judicial

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foreclosure, and these “provisions cover every aspect of exercise of the power of sale

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contained in a deed of trust.” Gomes v. Country Wide Home Loans, Inc., 192 Cal. App. 4th

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1149, 1154 (2011) (citations omitted). Section 2924(a)(1) permits a trustee, mortgagee, or

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beneficiary, or any of their authorized agents to initiate the foreclosure procedure. Id. at

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1155.
Wells Fargo’s predecessor, World Savings, was the beneficiary under the Deed of

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Trust associated with Plaintiff’s loan, and Wells Fargo is the current beneficiary according to

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the documents associated with the loan. RJN Ex. A; Hasenkampf Decl. ¶¶ 2-3. Therefore,

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under California law, it had the authority to appoint a trustee and initiate foreclosure

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proceedings. Gomes, 192 Cal. App. 4th at 1155. This is what happened on February 4,

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2010, when ETS, Wells Fargo’s agent, recorded the Notice of Default as authorized by

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Section 2924(a)(1). RJN Ex. B. ETS was then substituted in as trustee by the beneficiary of

United States District Court
For the Northern District of California

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record, as authorized by Section 2934a. RJN Ex. C. After three months had elapsed (as

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required by Section 2924(a)(2)), on May 7, 2010, ETS recorded a Notice of Trustee's Sale.

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RJN, Ex. D. On June 16, 2011, ETS recorded a subsequent Notice of Trustee's Sale so as not

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to run afoul of the requirement in Section 2924g(c)(1) that postponement of the sale “not []

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exceed a total of 365 days from the date set forth in the notice of sale.”
Thus, at least at this point, the evidence demonstrates that Wells Fargo has always

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been the beneficiary under the Deed of Trust, is authorized to initiate the foreclosure, and did

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so in compliance with California law. Therefore, Plaintiff fails to demonstrate a likelihood

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of success on the merits.
Moreover, Plaintiff fails to demonstrate irreparable harm. Wells Fargo initiated the

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foreclosure process in February 2010. This is over two years before Plaintiff filed for

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emergency relief. RJN Exs. B, D. Delay in seeking injunctive relief can imply a lack of

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urgency and irreparable harm, and weighs against the propriety of such relief. Miller ex rel.

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NLRB v. Cal. Pac. Med. Ctr., 991 F.2d 536, 544 (9th Cir. 1993); Lydo Enters. v. City of Las

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Vegas, 745 F.2d 1211, 1213 (9th Cir. 1984).

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IV.

CONCLUSION
For the foregoing reasons, the Court DENIES the ex parte application for a temporary

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restraining order.

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IT IS SO ORDERED.

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Dated: March 9, 2012

CHARLES R. BREYER
UNITED STATES DISTRICT JUDGE

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United States District Court
For the Northern District of California

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