Castellanos v. Countrywide Bank NA et al

Filing 6

Order by Hon. Beth Labson Freeman granting 2 Ex Parte Application for Temporary Restraining Order. (blflc3S, COURT STAFF) (Filed on 2/27/2015)

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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 MARIA CASTELLANOS, Case No. 15-cv-00896-BLF Plaintiff, 8 v. 9 10 COUNTRYWIDE BANK NA, et al., Defendants. ORDER GRANTING PLAINTIFF'S MOTION FOR A TEMPORARY RESTRAINING ORDER [Re: ECF 2] United States District Court Northern District of California 11 12 Plaintiff Maria Castellanos, represented in this litigation by counsel, brings suit against 13 14 Defendant alleging several causes of action, including violations of the Fair Debt Collection 15 Practices Act (“FDCPA”) and Rosenthal Act, as well as for wrongful foreclosure and quiet title. 16 ECF 1. Before the Court is Plaintiff’s Ex Parte Motion for an Emergency Temporary Restraining 17 Order (“TRO Application”) requiring Defendant to cancel a foreclosure sale of her property 18 presently scheduled for Monday, March 2, 2015 at 1:30 p.m. See TRO App. at p. 2. Based on 19 Plaintiff’s application and supporting materials, the Court GRANTS her TRO Application. 20 21 I. BACKGROUND Plaintiff filed this action today, February 27, 2015. She asserts that in 2006 she engaged in 22 a transaction with Countrywide Bank, N.A., in which she refinanced her debt on real property 23 located at 23 Meghan Court in Watsonville, California. Compl. ¶ 21. She claims that Countrywide 24 was not the source of funds for the transaction, and “denies any loan or debt being owed to any 25 party, specifically the Defendants.” Compl. ¶ 22. On July 18, 2014, Plaintiff sent Defendants 26 Select Portfolio Servicing (“SPS”) and National Default Servicing Corp. (“NDSC”) a Notice of 27 Dispute, pursuant to 15 U.S.C. § 1692g, to which SPS responded by serving Plaintiff with a 28 dunning notice. Compl. ¶¶ 24-25. Plaintiff further alleges that an Assignment of Deed of Trust, 1 dated May 11, 2011, was filed in the Santa Cruz County Recorder’s Office, stating that the Deed 2 of Trust and Promissory Note were assigned from Mortgage Electronic Registration Systems, Inc. 3 to Bank of New York Mellon. Compl. ¶ 26. Plaintiff alleges this document to be false and 4 fraudulent. Id. Plaintiff also filed her ex parte TRO Application today, February 27, 2015. Plaintiff states 5 that she had been informed that any foreclosure sale of her property had been put on hold “while 7 the parties were discussing possible solutions.” TRO App. at ¶ 1. Defendants had previously 8 continued the sale dates for foreclosure sales of the property for thirty to forty-five days as the 9 parties have attempted to resolve their dispute, but on Wednesday, February 25, 2015, Plaintiff 10 contacted NDSC and was informed that a sale date had been set for March 2, 2015, and that the 11 United States District Court Northern District of California 6 sale “would be going forward unless restrained by Court order.” TRO App. at ¶¶ 2, 3. Plaintiff seeks a TRO that would “immediately cancel the currently scheduled foreclosure 12 13 sale . . .until the Court can consider Plaintiff[’s] Complaint,” and direct Defendants to “appear and 14 show cause . . . that this Court should not issue a preliminary injunction against all further 15 foreclosure activity by defendant’s (sic) . . . until the Court rules on the merits of the relief 16 requested in the Complaint.” TRO App. at p. 2. 17 II. LEGAL STANDARD 18 The substantive standard for issuing a temporary restraining order is identical to the 19 standard for issuing a preliminary injunction. See Stuhlbarg Int’l Sales Co., Inc. v. John D. Brush 20 & Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001); Lockheed Missile & Space Co. v. Hughes Aircraft, 21 887 F. Supp. 1320, 1323 (N.D. Cal. 1995). An injunction is a matter of equitable discretion and is 22 “an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is 23 entitled to such relief.” Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 22 (2008). 24 A plaintiff seeking preliminary injunctive relief must establish “[1] that he is likely to 25 succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary 26 relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public 27 interest.” Id. at 20. Alternatively, an injunction can issue where “the likelihood of success is such 28 that serious questions going to the merits were raised and the balance of hardships tips sharply in 2 1 plaintiff’s favor,” provided that the plaintiff can also demonstrate the other Winter factors. 2 Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011) (citation and 3 internal quotation marks omitted). Under either standard, the plaintiff bears the burden of making 4 a clear showing on these elements and on entitlement to this extraordinary remedy. Earth Island 5 Inst. v. Carlton, 626 F.3d 462, 469 (9th Cir. 2010). III. 6 DISCUSSION An ex parte TRO Application must first satisfy Federal Rule of Civil Procedure 65(b)(1), 7 8 which demands that the opposing party or parties have been given notice. Plaintiff’s TRO 9 Application avers that her counsel contacted Defendants’ attorneys on February 26, 2015 to give notice that she would be seeking a TRO. See TRO App. at ¶ 5. The Court therefore considers 11 United States District Court Northern District of California 10 whether Plaintiff has made a sufficient showing pursuant to the four Winter factors. 12 A. Likelihood of Irreparable Injury 13 Courts have repeatedly concluded that the loss of one’s home is sufficient to satisfy the 14 element of irreparable injury. See, e.g., Vazquez v. Select Portfolio Serv’g, 2013 WL 5401888, at 15 *2 (N.D. Cal. Sept. 26, 2013); Tamburri v. Suntrust Mortg., Inc., 2011 WL 2654093, at *2 (N.D. 16 Cal. July 6, 2011). Here, if the foreclosure sale is successful, Plaintiff could lose her property, 17 originally purchased in 2003. 1 This loss is more than sufficient to show a likelihood of irreparable 18 injury. 19 B. Balance of Hardships 20 The balance of hardships tips decisively to Plaintiff. As the court noted in Tamburri, “it is 21 hard to conceive of a serious hardship to Defendants [were a TRO to issue] . . . because any 22 security they have in the real property would still remain,” provided the security is valid. 23 Tamburri, 2011 WL 2654093, at *2. In contrast, were the foreclosure sale to go forward following 24 the Court’s denial of the TRO Application, Plaintiff could lose her property. Such a balance 25 between the interests of the homeowner and the party seeking to foreclose augurs strongly in favor 26 of the homeowner. See Vazquez, 2013 WL 5401888, at *2; see also Cottrell, 632 F.3d at 1131. 27 1 28 Plaintiff does not specifically plead or allege that the property is her residence, merely that she is the owner of the property. See Compl. ¶ 2; Castellanos Decl. ¶ 2. 3 1 C. Likelihood of Success on the Merits 2 Plaintiff does not in either declaration provide the Court reasons why she is likely to 3 prevail were this suit to be tried. See, e.g., Maines Decl., ECF 2-2. However, Plaintiff has alleged 4 that Defendants are not legally entitled to foreclose in the subject property. See, e.g., Compl. at ¶ 5 26. Under the standard outlined in Cottrell, at least one court in this district has found with regard 6 to a similar wrongful foreclosure TRO application that “[g]iven that the balance of hardships tips 7 sharply in Plaintiff’s favor, Plaintiff need only show that there are serious questions going to the 8 merits in order to obtain a temporary restraining order.” Vazquez, 2013 WL 5401888, at *3. 9 Plaintiff has done so. D. 11 United States District Court Northern District of California 10 Public Interest “[I]t is in the public interest to allow homeowners an opportunity to pursue what appear to 12 be valid claims before being displaced from their homes.” Sencion v. Saxon Mortg. Servs., LLC, 13 2011 WL 1364007, at *1 (N.D. Cal. Apr. 11, 2011). Plaintiff has met this fourth Winter factor. 14 15 IV. ORDER Plaintiff has established three of the four Winter factors, and given how heavily the balance 16 of hardships tip in her favor, has shown that there are serious questions going to the merits such 17 that the fourth Winter factor, likelihood of success on the merits, is also established. See Cottrell, 18 632 F.3d at 1131. The Court hereby GRANTS Plaintiff’s ex parte TRO Application, and orders as 19 follows: 20 1. Plaintiff shall immediately serve her Application and Order upon Defendants, and 21 file a certificate of service thereafter. This Order shall have no effect unless Plaintiff files a 22 certificate of service by 10 a.m. on March 2, 2015. 23 2. The Court HEREBY PROHIBITS Defendants from proceeding with the sale of 23 24 Meghan Court, Watsonville, CA 95076, currently scheduled to take place at 701 Ocean Street, 25 Santa Cruz, CA on March 2, 2015 at 1:30 p.m., until further order by the Court. 26 3. The Court finds, pursuant to Rule 65(c), that there is no likelihood that Defendants 27 will be wrongfully enjoined or restrained by the issuance of this TRO, and therefore does not 28 require Plaintiff to give security. 4 1 4. To provide Defendants adequate time to prepare a response to Plaintiff’s TRO 2 Application, and so the Court has adequate time to review that response, the Court finds pursuant 3 to Rule 65(b)(2) that good cause exists to extend the expiration date of this Order to Thursday, 4 March 12, 2015, at the time of the conclusions of the hearing on this order. 5 5. Defendants are HEREBY ORDERED TO SHOW CAUSE in writing why a 6 preliminary injunction should not issue, no later than March 9, 2015. The Court will hold a 7 hearing on this Order to Show Cause on Thursday, March 12, 2015 at 9:00 a.m., in Courtroom 8 3, 5th Floor, 280 South 1st St., San Jose, CA 95113. 9 10 United States District Court Northern District of California 11 12 IT IS SO ORDERED. Dated: February 27, 2015 ______________________________________ EDWARD J. DAVILA United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5

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