Estrada v. Servis One, Inc. et al

Filing 5

ORDER Denying Plaintiff's 2 Ex Parte Motion for TRO. Signed by Judge Roger T. Benitez on 4/13/2016. (knb)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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LAURA L. ESTRADA,

Case No.: 16-cv-853-BEN (BGS)
Plaintiff,

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ORDER DENYING PLAINTIFF’S EX
PARTE MOTION FOR
TEMPORARY RESTRAINING
ORDER

v.
SERVIS ONE, INC. d/b/a BSI
FINANCIAL SERVICES,

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Defendant.

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Before this Court is an Ex Parte Motion for a Temporary Restraining Order, filed

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by Plaintiff Laura L. Estrada. (Docket No. 2.) Plaintiff seeks to enjoin Defendant from

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proceeding with the trustee’s sale scheduled for April 14, 2016. Defendant filed an

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Opposition. (Docket No. 4.) For the reasons stated below, the Motion is DENIED.

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BACKGROUND

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Plaintiff Laura L. Estrada, formerly Laura L. Valdivia, obtained a mortgage to

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purchase her real property in Spring Valley, California. Her mortgage was serviced by

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Carrington Mortgage Services (“CMS”). Plaintiff transferred her interest in the Spring

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Valley property to a third party by grant deed, which was recorded on August 1, 2011.1

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(Def.’s Req. for Judicial Notice, Ex. 1.)

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The Court grants Defendant’s request for judicial notice. (Docket No. 4-1.)
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On August 28, 2015, CMS offered to enter into a Trial Period Plan (“TPP”) with

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Plaintiff. Under the TPP, Plaintiff agrees that “[i]f [she is] in compliance with this [TPP]

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and [her] representations in Section 1 continue to be true and correct in all material

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respects, CMS will provide [her] with a Home Affordable Modification Agreement. . . .”

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(Mot. Ex. A (emphasis added).) In Section 1, Plaintiff represented that “[t]here has been

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no change in the ownership of the Property since I signed the Loan Documents.” (Id.)

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The TPP further states, “If . . . CMS determines that [the borrower has] submitted any

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false or misleading information or [that the borrower’s] representations in Section 1 were

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not, or are no longer, true and correct, the Loan Documents will not be modified and this

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Plan will terminate.” (Id.) The TPP reiterates that it “is not a modification of the Loan

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Documents and that the Loan Documents will not be modified unless and until [the

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borrower] meet[s] all of the conditions required for modification.” (Id.)

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On September 16, 2015, the servicing of Plaintiff’s mortgage was transferred from

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CMS to Defendant Servis One, Inc. On September 26, 2015, Plaintiff made the first

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payment of $1,985 under the TPP. On October 15, 2015, Defendant sent notice to

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Plaintiff that she was not eligible for the loan modification. Plaintiff made the second

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payment on November 1, which Defendant rejected. Plaintiff attests that Defendant

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would not accept the third payment. Defendant then issued a Notice of Trustee’s Sale.

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(Mot. Ex. B.)

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Plaintiff initiated this action alleging breach of contract, promissory estoppel, and

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violations of the California Homeowner Bill of Rights and the Unfair Competition Law.

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(Docket No. 1.)

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LEGAL STANDARD

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A temporary restraining order (“TRO”) is a form of preliminary injunctive relief

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limited to “preserving the status quo and preventing irreparable harm just so long as is

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necessary to hold a hearing, and no longer.” Granny Goose Foods, Inc. v. Bd. of

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Teamsters, 415 U.S. 423, 439 (1974). It is “an extraordinary remedy that may only be

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awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter v.
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Natural Res. Def. Council, 555 U.S. 7, 24 (2008).
Federal Rule of Civil Procedure 65(b) empowers a court to grant a TRO without
written or oral notice to the adverse party “only if”:
(A) specific facts in an affidavit or a verified complaint clearly show that
immediate and irreparable injury, loss, or damage will result to the movant
before the adverse party can be heard in opposition; and
(B) the movant’s attorney certifies in writing any efforts made to give notice
and the reasons why it should not be required.
The Court’s substantive analysis on a motion for a TRO is substantially identical to

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that on a motion for a preliminary injunction. See Stuhlbarg Int’l Sales Co. v. John D.

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Brush & Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001). Plaintiff must demonstrate: (1) a

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likelihood of success on the merits; (2) a likelihood of suffering irreparable harm absent

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injunctive relief; (3) the balance of equities tips in favor of injunctive relief; and (4)

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injunctive relief is in the public interest. Winter, 555 U.S. at 20. In the Ninth Circuit,

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“serious questions going to the merits and a hardship balance that tips sharply toward the

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plaintiff can support issuance of an injunction, assuming the other two elements of the

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Winter test are also met.” Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1132

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(9th Cir. 2011) (internal quotation marks omitted).

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DISCUSSION

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Ordinarily before issuing a TRO, the Court must hold a hearing or otherwise

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provide the opposing party with an opportunity to respond. In this case, the Court gave

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Defendant time to file an opposition, which it did. (Docket Nos. 3, 4.) Therefore, the

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notice requirement is satisfied.

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As for the likelihood of success on the merits, Plaintiff failed to demonstrate

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standing. The plaintiff bringing an action in the federal court has the burden to show that

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Article III standing exists. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992);

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Snake River Farmers’ Ass’n, Inc. v. Dep’t of Lab., 9 F.3d 792, 795 (9th Cir. 1993).

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Specifically, the plaintiff must show (1) an injury in fact; (2) traceable to the challenged

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action of the defendant; and (3) likely to be redressed by a favorable decision. Lujan, 504
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U.S. at 560. A standing inquiry accordingly focuses on whether the plaintiff is the proper

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party to bring the lawsuit. Raines v. Byrd, 521 U.S. 811, 818 (1997). Under Federal Rule

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of Civil Procedure 17(a), “[a]n action must be prosecuted in the name of the real party in

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interest,” such as the trustee of an express trust. “In general, it is the person holding title

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to the claim or property involved” who is the real part in interest. U-Haul Int’l, Inc. v.

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Jartran, Inc., 793 F.2d 1034, 1038 (9th Cir. 1986).

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Plaintiff claims that the Spring Valley property is held in a trust. The trustee is

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Leopolda Tellechea. (Def. Req. for Judicial Notice, Ex. 1.) “As a general rule, the

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trustee is the real party in interest with standing to sue and defend on the trust’s behalf.”

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Aguirre v. Cal-Western Reconveyance Corp., 2012 WL 273753, at *4 (C.D. Cal. Jan. 30,

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2012) (citing In re Estate of Bowles, 169 Cal. App. 4th 684, 691 (2d Dist. 2008). As

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Plaintiff has not shown that she is the trustee or that she has legal title to the property, it

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appears that she lacks standing and is not the real party in interest.

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In addition, Plaintiff’s Complaint is based upon her compliance with the TPP.

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Plaintiff asserts that all of her representations in the TPP were true and that Defendant

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breached the agreement by unilaterally terminating the Plan. However, as evidenced by

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the grant deed recorded in 2011, Plaintiff transferred her interest in the property to

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“Princesa Lorena 1210, Trustee Leopolda Tellechea.” (Def. Req. for Judicial Notice, Ex.

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1.) As such, Plaintiff’s representation to CMS that there had been no change in

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ownership of the property since Plaintiff signed the loan documents was not true or

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correct.

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Because Plaintiff does not have legal title to the property and because she did not

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comply with the terms of the TPP, she cannot establish a likelihood of success on her

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claims. Plaintiff’s Motion is therefore DENIED.

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IT IS SO ORDERED.

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Dated: April 13, 2016

______________________________
HON. ROGER T. BENITEZ
United States District Judge
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