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