Wells v. CAM XI Trust et al

Filing 9

ORDER GRANTING SECOND APPLICATION FOR TEMPORARY RESTRAINING ORDER AND SETTING SCHEDULE by Hon. Jon S. Tigar granting 8 Ex Parte Application.Response due by 1/5/2017 at 5:00 p.m. Reply due by 1/9/2017 at 5:00 p.m. Motion Hearing set for 1/11/2017 08:30 AM in Courtroom 7, 19th Floor, San Francisco before Hon. Jon S. Tigar.(whalc1, COURT STAFF) (Filed on 12/30/2016)

Download PDF
1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 ROBERT N. WELLS, 11 For the Northern District of California United States District Court 10 12 13 Case No. 16-cv-07380 JST Plaintiff, ORDER GRANTING SECOND APPLICATION FOR TEMPORARY RESTRAINING ORDER AND SETTING SCHEDULE v. CAM XI TRUST, et al., 14 Defendants. Re: ECF No. 8 / 15 16 17 Plaintiff has filed an application for an ex parte temporary restraining order. ECF No. 8. For the reasons stated below, the application is GRANTED. 18 I. BACKGROUND 19 A. Factual History 20 Plaintiff Robert N. Wells is the mortgagor and resident of a home located at 151 21 Northcreek Circle, Walnut Creek, CA 94598. Non-party American Brokers Conduit was the 22 original lender on Wells’ mortgage loan, and defendant CAM XI Trust purports to have 23 acquired an interest in the loan based on a chain of assignments that began in June 2011. 24 American Brokers Conduit, however, ceased operations and closed on or before November 30, 25 2010. 26 In August 2016, CAM XI recorded a notice of default, which stated Wells owed 27 $213,453.17. Wells acknowledges that he stopped paying his mortgage in June 2015, and he 28 admits that he was “in arrears for approximately $29,400.00” but denies he owes the full amount of $213,453.17. ECF No. 8-4 ¶ 9. 1 2 In December 2016, Wells received a notice of trustee’s sale, which set the date of sale for January 3, 2017, at 9:00 a.m. Id., Exh. A. 3 4 B. Procedural History On December 29, 2016, Wells filed a complaint against CAM XI and another defendant, 5 BSI Financial Services, which is the purported servicer of his loan, alleging wrongful 6 foreclosure, breach of contract, and related claims, and seeking cancellation of the loan against 7 his home and related relief. Wells asserts that American Brokers Conduit lacked authority to 8 assign his loan in June 2011, which assignment began the chain of assignments ending with 9 CAM XI, inasmuch as American Brokers Conduit had ceased operations prior to that date. Thus, he argues, the initial purported assignment and each subsequent assignment, was void, 11 For the Northern District of California United States District Court 10 depriving defendants of authority to foreclose. ECF. No. 1. 12 The same day, Wells also filed an Ex Parte Application for Temporary Restraining 13 Order to enjoin the pending foreclosure of his home, with a trustee’s sale scheduled for 14 January 3. An order denied that first application because Wells failed to allege any effort to 15 give defendants notice of his TRO application or any reason why notice should not be required, 16 pursuant to Rule 65(b)(1) and Civil Local Rule 65-1(b). That denial was without prejudice to a 17 renewed motion that satisfied those requirements. ECF No. 7. 18 On December 30, Wells filed the instant second motion for a TRO, in which he alleged 19 his counsel had faxed and emailed a letter to defendants containing the TRO papers. ECF 20 No. 8-2. 21 22 23 24 For the reasons stated below, Wells’s motion is GRANTED. Defendants are temporarily enjoined from conducting a trustee’s sale of Wells’s home. II. LEGAL STANDARD The same legal standard applies to a motion for a temporary restraining order and a 25 motion for a preliminary injunction. See Stuhlbarg Int’l Sales Co. v. John D. Brush & Co., 240 26 F.3d 832, 839 n.7 (9th Cir. 2001). A plaintiff seeking either remedy “must establish that he is 27 likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of 28 preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the 2 1 public interest.” Am. Trucking Associations, Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 2 (9th Cir. 2009) (quoting Winter v. Nat. Resources Defense Council, 555 U.S. 7, 20 (2008)). The 3 purpose of such a temporary restraining order is to preserve the status quo and to prevent 4 irreparable harm “just so long as is necessary to hold a hearing, and no longer.” Granny Goose 5 Foods, Inc. v. Bhd. of Teamsters, 415 U.S. 423, 439 (1974). 6 7 III. DISCUSSION This order finds that Wells has met his burden in requesting a temporary restraining 8 order. On the present record, Wells is likely to succeed on the merits of his claim that the initial 9 assignment from American Brokers Conduit was void, he is likely to suffer irreparable harm, and the balance of equities and the public interest favor granting a temporary restraining order, 11 For the Northern District of California United States District Court 10 at least where a bond is posted. 12 13 This order first takes judicial notice of certain facts that are necessary to Wells’s motion, but absent from the sworn record. It then addresses the Winter factors. 14 A. Judicial Notice 15 Wells did not submit a sworn statement supporting his contention that American 16 Brokers Conduit, the original lender for the mortgage at issue here, ceased all operations and 17 closed on November 30, 2010. Nevertheless, the undersigned takes judicial notice of the fact 18 that American Home Mortgage Corporation did business as American Brokers Conduit, and 19 that American Home Mortgage Corporation was liquidated on or before November 30, 2010 20 pursuant to a plan of bankruptcy. See In re American Home Mortgage Holdings, Inc., et al., 21 No. 07-11047 (Bankr. D.Del. Feb. 23, 2009) (Dkt. No. 7042); id. (Bankr. D.Del. Nov. 30, 2010) 22 (Dkt. No. 9519). 23 24 B. Success on the Merits The present record supports Wells’s contention that CAM XI never acquired a valid 25 interest in his mortgage and thus lacks authority to foreclose, inasmuch as the first assignment 26 in that sequence occurred after the initial lender, American Brokers Conduit, had ceased 27 operations and shut down. Under Yvanova v. New Century Mortgage Corporation, a mortgagor 28 may challenge a foreclosure based on allegations that assignments of the loan were void. 62 3 1 Cal. 4th 919, 939 (2016). Although Yvanova was limited to post-foreclosure claims, the 2 undersigned has previously concluded that the California Supreme Court will likely extend 3 Yvanova to pre-foreclosure claims. See Lundy v. Selene Fin., LP, 15-CV-05676-JST, 2016 WL 4 1059423, at *10 (N.D. Cal. Mar. 17, 2016). This order likewise assumes, solely for the sake of 5 assessing the likelihood of success on the merits on this application for a temporary restraining 6 order, that the California Supreme Court would extend Yvanova to pre-foreclosure challenges. 7 For the avoidance of any doubt, this issue may be revisited at subsequent proceedings, including 8 at the hearing following this order. 9 Accordingly, Wells has demonstrated a sufficient likelihood of success on the merits that the initial assignment of his loan was void. This order declines to address the merits of the 11 For the Northern District of California United States District Court 10 balance of Wells’s causes of action. 12 C. Irreparable Harm 13 Wells has provided a declaration stating that he will suffer irreparable harm if an 14 injunction is not granted. He avers that absent a temporary restraining order, he will lose his 15 home. Although Wells has not stated that he would be homeless if forced out of this particular 16 home, “[i]t is well-established that the loss of an interest in real property constitutes an 17 irreparable injury.” Park Village Apt. Tenants Ass’n v. Mortimer Howard Trust, 636 F.3d 1150, 18 1159 (9th Cir. 2011). Wells has satisfied this factor. 19 20 D. Balance of the Equities and the Public Interest This temporary restraining order will delay the trustee sale of the property for a short 21 period of time, until the court can hold a hearing on a motion for a preliminary injunction, 22 which will occur in less than two weeks. This brief delay of the sale for the purpose of allowing 23 consideration of the issues herein with the benefit of full briefing does not overcome the 24 irreparable harm that will occur if Wells loses his home. 25 This order acknowledges, however, that Wells filed his initial motion without giving 26 notice to defendants on Thursday, December 29, and he filed the instant motion on Friday, 27 December 30, effectively guaranteeing that defendants could not be heard either in writing or at 28 a noticed hearing before the scheduled trustee’s sale on Tuesday, January 3 (particularly given 4 1 that January 2 is a court holiday). Wells knew of the trustee’s sale, however, weeks earlier. 2 Ordinarily, a “long delay before seeking a preliminary injunction implies a lack of urgency and 3 irreparable harm.” Oakland Tribune, Inc. v. Chronicle Publ’g Co., 762 F.2d 1374, 1377 (9th 4 Cir. 1985). To offset any imbalance, this order will require Wells to post a bond in the amount 5 of $29,400, which is the amount he admits is owed on his loan. 6 CONCLUSION 7 For the reasons stated above and to the extent stated above, Wells’s application for a 8 temporary restraining order is GRANTED. The order will not take effect unless and until a bond 9 in the amount of $29,400 is posted with the Court registry by January 3, 2017 at 11:00 a.m. This order sets the following briefing schedule. Defendants shall respond to Wells’s 11 For the Northern District of California United States District Court 10 opening brief by January 5, 2017 at 5:00 p.m. Wells may reply by January 9, 2017 at 5:00 12 p.m The motion will be heard in Courtroom 7 on the 19th Floor at the Federal Courthouse at 13 450 Golden Gate Ave., San Francisco, on January 11, 2017 at 8:30 a.m. 14 IT IS SO ORDERED. 15 16 Dated: December 30, 2016 JON S. TIGAR UNITED STATES DISTRICT JUDGE 17 18 19 20 21 22 23 24 25 26 27 28 5

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?