Magana v. Wells Fargo Bank, N.A et al

Filing 19

ORDER by Judge Claudia Wilken GRANTING 12 Plaintiff's Ex Parte Application for a Temporary Restraining Order, Directing Defendants to Show Cause Why a Preliminary Injunction Should Not Enter and Referring Case to Alternative Dispute Resolution Unit (cwlc2, COURT STAFF) (Filed on 8/29/2011)

1

IN THE UNITED STATES DISTRICT COURT

2

FOR THE NORTHERN DISTRICT OF CALIFORNIA

3
4
5

VICTORIA P. MAGANA, an
individual,
Plaintiff,

6
7
8
9

United States District Court
For the Northern District of California

10
11

v.
WELLS FARGO BANK, N.A.; LSI TITLE
COMPANY, a California
Corporation; and NDEX WEST LLC, a
Delaware limited liability
corporation,
Defendants.
________________________________/

12
13

No. C 11-03993 CW
ORDER GRANTING
PLAINTIFF‟S EX
PARTE APPLICATION
FOR A TEMPORARY
RESTRAINING ORDER,
DIRECTING
DEFENDANTS TO SHOW
CAUSE WHY A
PRELIMINARY
INJUNCTION SHOULD
NOT ENTER AND
REFERRING CASE TO
ALTERNATIVE
DISPUTE RESOLUTION
UNIT
(Docket No. 12)

14
15

In this foreclosure-related action, Plaintiff Victoria P.

16

Magana applies ex parte for a temporary restraining order.

17

seeks to enjoin Defendants Wells Fargo Bank, N.A., and NDEx West

18

LLC from proceeding with a trustee‟s sale of property located at

19

1113 Remington Court in Sunnyvale, California, which she contends

20

is scheduled for September 1, 2011.1

21

declaration, stating that Defendants have not contacted her as

22

required by California Civil Code section 2923.5.

23

She

Plaintiff has filed a

A temporary restraining order may be issued without providing

24

the opposing party an opportunity to be heard only if “specific

25

facts in an affidavit or a verified complaint clearly show that

26
27
28

Plaintiff has voluntarily dismissed her claims against
Defendant LSI Title Company. (Docket No. 14.)
1

1

immediate and irreparable injury, loss, or damage will result to

2

the movant before the adverse party can be heard in opposition.”

3

Fed. R. Civ. P. 65(b)(1)(A).

4

temporary restraining order is the same as that for issuance of a

5

preliminary injunction.”

6

(N.D. Cal.).

7

must “establish that he is likely to succeed on the merits, that

8

he is likely to suffer irreparable harm in the absence of

9

preliminary relief, that the balance of equities tips in his

“The standard for issuance of a

Burgess v. Forbes, 2009 WL 416843, at *2

To obtain a preliminary injunction, the moving party

United States District Court
For the Northern District of California

10

favor, and that an injunction is in the public interest.”

11

v. Natural Res. Def. Council, Inc., 129 S. Ct. 365, 374 (2008).

12

Alternatively, preliminary injunctive relief could be granted when

13

“the likelihood of success is such that serious questions going to

14

the merits were raised and the balance of hardships tips sharply

15

in plaintiff‟s favor,” so long as the plaintiff demonstrates a

16

likelihood of irreparable harm and shows that the injunction is in

17

the public interest.

18

632 F.3d 1127, 1131 (9th Cir. 2011) (citation and internal

19

quotation and editing marks omitted).

20

courts employ a “sliding scale” approach, under which “a stronger

21

showing of one element may offset a weaker showing of another.”

22

Id.

23

plaintiff might offset a lesser showing of likelihood of success

24

on the merits.”

25

Winter

Alliance for the Wild Rockies v. Cottrell,

In the Ninth Circuit,

For instance, “a stronger showing of irreparable harm to

Id.

California Civil Code section 2923.5 “concerns the crucial

26

first step in the foreclosure process: The recording of a notice

27

of default as required by section 2924.”

28

185 Cal. App. 4th 208, 221 (2010).
2

Mabry v. Superior Court,

Under section 2923.5, a lender

1

may not file a notice of default until thirty days after it has

2

contacted “the borrower by phone or in person to „assess the

3

borrower‟s financial situation and explore options for the

4

borrower to avoid foreclosure.‟”2

5

§ 2923.5(a)(2)).

6

there is no valid notice of default, and without a valid notice of

7

default, a foreclosure sale cannot proceed.”

8

remedy for a failure to comply with section 2923.5 is “to postpone

9

the sale until there has been compliance with” the statute.

United States District Court
For the Northern District of California

10
11

Id. (quoting Cal. Civ. Code

“If section 2923.5 is not complied with, then

Id. at 223.

The

Id.

(citing Cal. Civ. Code § 2924g(c)(1)(A)).
Plaintiff‟s declaration is sufficient to demonstrate she is

12

likely to succeed on the merits of her claim under section 2923.5.

13

Further, because the Remington Court property is likely to be sold

14

at the foreclosure sale, Plaintiff has demonstrated that she is

15

likely to suffer irreparable harm.

16

in Plaintiff‟s favor because, in the absence of preliminary

17

injunctive relief, she faces the sale of the Remington Court

18

property; in contrast, as explained above, preliminary injunctive

19

relief provided under section 2923.5 will only delay the

20

foreclosure sale to permit compliance with the statute.

21

the public interest favors vindicating the Legislature‟s intent

22

“to have individual borrowers and lenders „assess‟ and „explore‟

23

alternatives to foreclosure.”

24
25
26
27
28

The balance of equities tips

Finally,

Mabry, 185 Cal. App. 4th at 223.

Accordingly, the Court GRANTS Plaintiff‟s ex parte
application for a temporary restraining order.

(Docket No. 12.)

Alternatively, a lender may comply with section 2923.5 by
completing the due diligence requirements of subdivision (g) of
the statute. Mabry, 185 Cal. App. 4th at 221.
2

3

1

A temporary restraining order will be entered as a separate

2

document.

3

Defendants are ordered to show cause why a preliminary

4

injunction should not enter concerning Plaintiff‟s section 2923.5

5

claim.

6

Plaintiff‟s reply, if necessary, shall be due September 6, 2011.

7

A hearing on whether a preliminary injunction shall enter will be

8

held on September 8, 2011 at 2:00 p.m.

Defendants‟ response shall be due September 2, 2011.

Pursuant to Civil L.R. 16-8 and ADR L.R. 2-3, the Court

10
United States District Court
For the Northern District of California

9

refers this foreclosure-related action to the Alternative Dispute

11

Resolution (ADR) Unit to assess this case‟s suitability for

12

mediation or a settlement conference.

13

Defendants‟ counsel shall participate in a telephone conference,

14

to be scheduled by the ADR Unit on a date before September 16,

15

2011.
Plaintiff, her counsel and Defendants‟ counsel shall be

16
17

Plaintiff, her counsel and

prepared to discuss the following subjects:

18

(1)

Identification and description of claims and
alleged defects in loan documents.

(2)

Prospects for loan modification.

(3)

Prospects for settlement.

(4)

Any other matters that may be conducive to the
just, efficient and economical determination of the
action.

19
20
21
22
23

The parties need not submit written materials to the ADR Unit

24
25

for the telephone conference.

26

//

27

//

28

//
4

1
2
3

In preparation for the telephone conference, Plaintiff and
her counsel shall do the following:
(1)

Review relevant loan documents and conduct a brief
investigation of claims to determine whether the
claims in this action have merit.

(2)

If Plaintiff is seeking a loan modification to
resolve all or some of her claims, she shall
prepare a current, accurate financial statement and
gather all of the information and documents
customarily needed to support a loan modification
request. Further, Plaintiff shall immediately
notify Defendants‟ counsel of her request for a
loan modification.

(3)

Provide counsel for Defendants with information
necessary to evaluate the prospects for loan
modification. The general and financial
information provided to Defendants may be in the
form of a financial statement, worksheet or
application customarily used by financial
institutions.

4
5
6
7
8
9

United States District Court
For the Northern District of California

10
11
12
13
14
15
16

In preparation for the telephone conference, counsel for
Defendants shall do the following.
(1)

If Defendants are unable or unwilling to do a loan
modification after receiving notice of Plaintiff‟s
request, counsel for Defendants shall promptly
notify Plaintiff and her counsel to that effect.

(2)

Arrange for a representative of each Defendant with
full settlement authority to participate in the
telephone conference.

17
18
19
20
21

The ADR Unit will provide the parties with additional

22

information regarding the telephone conference, including the date

23

it will be held.

24

the ADR Unit will advise the Court of its recommendation for

25

further ADR proceedings.

26
27
28

After the telephone conference has been held,

IT IS SO ORDERED.
Dated:

August 29, 2011

CLAUDIA WILKEN
United States District Judge
5