Feathers v. Bank of America , N.A. et al

Filing 23

ORDER granting 8 Ex Parte Application for Temporary Restraining Order. Defendants are ordered to appear before the undersigned at 9:00 a.m. on 1/29/2016 to show cause why a preliminary injunction incorporating the temporary restraining order specified above should not issue. Signed by Judge Edward J. Davila on 1/19/2016. (ejdlc1S, COURT STAFF) (Filed on 1/19/2016) (Additional attachment(s) added on 1/19/2016: # 1 Certificate/Proof of Service) (ecg, COURT STAFF).

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 MARK FEATHERS, Case No. 5:16-cv-00086-EJD Plaintiff, 9 ORDER GRANTING PLAINTIFF’S EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER v. 10 11 BANK OF AMERICA, N.A., et al., Re: Dkt. No. 8 United States District Court Northern District of California Defendants. 12 13 On or about February 27, 2006, Plaintiff Mark Feathers (“Plaintiff”) and non-party Natalie 14 Feathers executed a Deed of Trust secured by a promissory note for $1.875 million dollars in favor 15 of Wells Fargo Bank, N.A. in order to purchase certain real property located in Los Altos, 16 California. See “Addenda to Amended Complaint,” Docket Item No. 16, at Ex. A. Plaintiff 17 alleges in a “Verified Amended Complaint for Damages” (the “AC”) that he stopped making 18 payments required by the Deed of Trust in July, 2012, and since then has unsuccessfully attempted 19 at various times and through various ways to obtain a modification of the underlying loan. More 20 recently, a Notice of Trustee’s Sale was recorded against the Los Altos property on December 30, 21 2015, which notified Plaintiff that a trustee’s sale was scheduled for January 21, 2016. See AC, 22 Docket Item No. 13, at Ex. 1. 23 In response, Plaintiff initiated this action on January 7, 2016, against Defendants Bank of 24 America, N.A, “Wells Fargo Bank through its wholly owned subsidiary Wells Fargo Home 25 Mortgage,” and NBS Default Services, LLC (collectively, “Defendants”) - which are alleged to be 26 the current noteholder, loan servicer, and trustee in the order named - and asserts eleven causes of 27 28 1 Case No.: 5:16-cv-00086-EJD ORDER GRANTING PLAINTIFF’S EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER 1 action. Under the current state of the pleadings, federal jurisdiction arises pursuant to 28 U.S.C. § 2 1331.1 Presently before the court is Plaintiff’s ex parte application for a temporary restraining 3 4 order (“TRO”) through which Plaintiff seeks to enjoin the January 21st trustee’s sale. See Docket 5 Item No. 8. Having reviewed the relevant pleadings, the court finds, concludes and orders as 6 follows: 1. 7 The standard for issuing a TRO is the same as that for the issuance of preliminary injunction. See New Motor Vehicle Bd. of Cal. v. Orrin W. Fox Co., 434 U.S. 1345, 1347 n.2 9 (1977). A preliminary injunction is “an extraordinary remedy that may only be awarded upon a 10 clear showing that the plaintiff is entitled to such relief.” Winter v. NRDC, Inc., 555 U.S. 7, 22 11 United States District Court Northern District of California 8 (2008). “The proper legal standard for preliminary injunctive relief requires a party to 12 demonstrate ‘that he is likely to succeed on the merits, that he is likely to suffer irreparable harm 13 in the absence of preliminary relief, that the balance of equities tips in his favor, and that an 14 injunction is in the public interest.’” Stormans, Inc. v. Selecky, 586 F.3d 1109, 1127 (9th Cir. 15 2009). A preliminary injunction may also issue if “serious questions going to the merits were 16 raised and the balance of the hardships tips sharply in the plaintiff’s favor,” thereby allowing 17 preservation of the status quo where complex legal questions require further inspection or 18 deliberation. Alliance for the Wild Rockies v. Cottrell, 622 F.3d 1045, 1049 (9th Cir. 2010). 2. 19 Where, as here, pleadings are filed by a plaintiff proceeding pro se, they must be 20 construed liberally. Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). In doing so, the court 21 “need not give a plaintiff the benefit of every conceivable doubt” but “is required only to draw 22 23 24 25 26 27 28 1 Although Plaintiff contends that federal jurisdiction arises on the basis of diversity, his allegations are insufficient to invoke such jurisdiction because he does not identify any of the defendants’ principal places of business. See Davis v. HSBC Bank Nev., N.A., 557 F.3d 1026, 1028 (9th Cir. 2008) (“A corporation is a citizen of (1) the state under whose laws it is organized or incorporated; and (2) the state of its ‘principal place of business.’”); see also Kanter v. WarnerLambert Co., 265 F.3d 853, 857 (9th Cir. 2001) (“[A] party seeking to invoke diversity jurisdiction should be able to allege affirmatively the actual citizenship of the relevant parties” in order to confirm that all parties are diverse.”). 2 Case No.: 5:16-cv-00086-EJD ORDER GRANTING PLAINTIFF’S EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER 1 every reasonable or warranted factual inference in the plaintiff's favor.” McKinney v. De Bord, 2 507 F.2d 501, 504 (9th Cir. 1974). The court “should use common sense in interpreting the 3 frequently diffuse pleadings of pro se complainants.” Id. 3. 4 As an initial matter, an ex parte TRO application must satisfy Federal Rule of Civil 5 Procedure 65(b)(1), which demands notice to the opposing party or parties. Plaintiff avers that he 6 notified Defendants of his intent to seek injunctive relief and sent copies of the TRO application to 7 Defendants on January 12, 2016. The court therefore proceeds to an analysis of the Winter 8 factors. 9 4. Plaintiff focuses on two issues in an effort to demonstrate a likelihood of success: (1) Defendants’ alleged violation of an injunction issued in another federal action involving 11 United States District Court Northern District of California 10 Plaintiff, and (2) alleged violations of the California Homeowner’s Bill of Rights and related 12 requirements. Liberally construing Plaintiff’s pleadings, the court finds the second argument 13 persuasive for the purposes of this application. 14 5. The AC contains a cause of action for violation of California Civil Code § 15 2923.55. Under subsection (a)(1) of that statute, “[a] mortgage servicer, mortgagee, trustee, 16 beneficiary, or authorized agent may not record a notice of default . . . until . . . [t]he mortgage 17 servicer has satisfied the requirements of paragraph (1) of subdivision (b).” Subdivision (b)(1) 18 requires a mortgage servicer to “send the following information in writing” to the borrower: 19 22 (A) A statement that if the borrower is a servicemember or a dependent of a servicemember, he or she may be entitled to certain protections under the federal Servicemembers Civil Relief Act (50 U.S.C. Appen. Sec. 501 et seq.) regarding the servicemember's interest rate and the risk of foreclosure, and counseling for covered servicemembers that is available at agencies such as Military OneSource and Armed Forces Legal Assistance. 23 (B) A statement that the borrower may request the following: 24 (i) A copy of the borrower’s promissory note or other evidence of indebtedness. 20 21 25 26 27 28 (ii) A copy of the borrower’s deed of trust or mortgage. (iii) A copy of any assignment, if applicable, of the borrower’s 3 Case No.: 5:16-cv-00086-EJD ORDER GRANTING PLAINTIFF’S EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER mortgage or deed of trust required to demonstrate the right of the mortgage servicer to foreclose. 1 2 (iv) A copy of the borrower’s payment history since the borrower was last less than 60 days past due. 3 4 “[T]he only remedy for a violation of section 2923.55, when no trustee’s sale has occurred 5 yet, is to delay foreclosure until the statute has been complied with.” Aguirre v. Wells Fargo 6 Bank, N.A., No. CV 15-1816-GHK (MRWx), 2015 U.S. Dist. LEXIS 86717, at *10, 2015 WL 7 4065245 (C.D. Cal. July 2, 2015). 8 6. In California, a notice of default is important because it is the recording of that document by “[t]he trustee, mortgagee, or beneficiary, or any of their authorized agents” that 10 commences the nonjudicial foreclosure process. Cal. Civ. Code § 2924(a)(1). Only after the 11 United States District Court Northern District of California 9 notice of default is filed may a notice of trustee’s sale be recorded. Cal. Civ. Code § 2924(a)(1). 12 7. Here, the present record does not reveal when, or if, Defendants recorded a notice 13 of default against the Los Altos property. Assuming one was recorded, it is equally unclear from 14 the record whether Defendants complied with § 2923.55(a)(1) by sending Plaintiff the written 15 notice described in § 2923.55(b)(1) before commencing the foreclosure process. Indeed, Plaintiff 16 alleges that Wells Fargo did not contact him between June, 2015, and December, 2015, when he 17 received notification of a newly appointed “home preservation specialist” and then, one week 18 later, received the Notice of Trustee’s Sale. See AC, at ¶ 22(h). Moreover, Plaintiff alleges he 19 was never informed of the “loan being placed into default by Wells Fargo” or of information 20 seemingly required by § 2923.55(b)(1) - that the loan was sold to Bank of America but that Wells 21 Fargo retained servicing rights and the right to foreclose. From these allegations, it can be 22 reasonably inferred that Defendants recorded the Notice of Trustee’s Sale without complying with 23 § 2923.55’s pre-foreclosure written notice requirements. And on that basis, the court finds that 24 Plaintiff has demonstrated a likelihood of success on the cause of action asserting a violation § 25 2923.55. 26 8. 27 28 The court further finds that Plaintiff has satisfied the remaining elements necessary 4 Case No.: 5:16-cv-00086-EJD ORDER GRANTING PLAINTIFF’S EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER 1 for the issuance of a TRO. “Courts have repeatedly concluded that the loss of one’s home is 2 sufficient to satisfy the element of irreparable injury.” Castellanos v. Countrywide Bank NA, No. 3 15-cv-00896-BLF, 2015 U.S. Dist. LEXIS 25030, at *4, 2015 WL 914436 (N.D. Cal. Feb. 27, 4 2015). Plaintiff has submitted a declaration explaining that he and his family reside at the Los 5 Altos property and will experience significant hardship if they are displaced by a foreclosure sale. 6 See Decl. of Mark Feathers Re: Irreparable Harm. In addition, the balance of hardships tips to 7 Plaintiff because, on the one hand, Plaintiff risks a loss of his home, while on the other, “it is hard 8 to conceive of a serious hardship to Defendants [from a TRO] . . . because any security they have 9 in the real property would still remain,” assuming the security is valid. Tamburri v. Suntrust Mortg., Inc., No. C-11-2899 EMC, 2011 U.S. Dist. LEXIS 72202, at *4, 2011 WL 2654093 (N.D. 11 United States District Court Northern District of California 10 Cal. July 6, 2011). Finally, “[i]t is in the public interest to allow homeowners an opportunity to 12 pursue what appear to be valid claims before being displaced from their homes.” Sencion v. 13 Saxon Mortg. Servs., LLC, No. 5:10-cv-3108 JF, 2011 U.S. Dist. LEXIS 41022, at *8-9, 2011 WL 14 1364007 (N.D. Cal. Apr. 11, 2011). Accordingly, Plaintiff’s TRO application is GRANTED. 15 9. 16 Commencing upon the filing of this order, Defendants are enjoined and shall not proceed 17 with any trustee’s sale of the real property commonly known as 1520 Grant Road, Los Altos, 18 California, 94024, which sale is currently scheduled to occur on January 21, 2016, at 11:00 a.m., 19 until further order of the court. 20 21 22 This order was issued on an ex parte basis because time is of the essence, given the imminent trustee’s sale. Plaintiff shall immediately, and no later than 12:00 p.m. on January 21, 2016, serve on all 23 Defendants copies of: (1) this order, (2) the TRO Application and all related documents and 24 attachments, and (3) the AC and all related documents and attachments. Plaintiff shall thereafter 25 file a certificate of service on or before 4:00 p.m. on January 21, 2016. Plaintiff is advised that 26 failure to complete service as required by Federal Rule of Civil Procedure 65(d)(2) and this order, 27 28 5 Case No.: 5:16-cv-00086-EJD ORDER GRANTING PLAINTIFF’S EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER 1 or failure to file a certificate of service by the deadline provided, may result in the dissolution of 2 the TRO. 3 The posting of a bond will not be required under Federal Rule of Civil Procedure 65(c) 4 because “there is no realistic likelihood of harm to the defendant[s]” from enjoining the trustee’s 5 sale. Johnson v. Couturier, 572 F.3d 1067, 1086 (9th Cir. 2009). 6 Defendants are ordered to appear before the undersigned at 9:00 a.m. on January 29, 2016, to show cause why a preliminary injunction incorporating the temporary restraining order 8 specified above should not issue. Any memorandum in opposition to the order to show cause shall 9 not exceed 10 pages in length and shall be filed and served on or before 4:00 p.m. on January 25, 10 2016. Any reply to the opposition shall not exceed 6 pages in length and shall be filed and served 11 United States District Court Northern District of California 7 on or before 4:00 p.m. on January 27, 2016. 12 13 The TRO shall remain in effect until 11:40 a.m. on February 2, 2016, unless the court orders otherwise. 14 15 IT IS SO ORDERED. 16 Dated: January 19, 2016 at 11:40 a.m. 17 18 ______________________________________ EDWARD J. DAVILA United States District Judge 19 20 21 22 23 24 25 26 27 28 6 Case No.: 5:16-cv-00086-EJD ORDER GRANTING PLAINTIFF’S EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER

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