Rencher et al v. Wells Fargo Bank NA et al

Filing 16

MEMORANDUM DECISION AND ORDER denying 9 Motion for Temporary Restraining Order. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjs)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
TAMLA RENCHER; RENCHER/ARCADIA
APARTMENTS, L.L.C.; and
RENCHER/SUNDOWN, L.L.C.,

Case No. 4:14-cv-00341-BLW
MEMORANDUM DECISION AND
ORDER

Plaintiffs,
v.
WELLS FARGO BANK, N.A., individually;
HSBC BANK USA, NATIONAL
ASSOCIATION, individually; WELLS
FARGO MORTGAGE BACKED
SECURITIES 2008-AR2 TRUST,
individually; and JOHN DOES 1-20,
individually,
Defendants.

INTRODUCTION
Plaintiffs Tamla Rencher, Rencher/Arcadia Apartments LLC (“Arcadia”), and
Rencher/Sundown LLC (“Sundown”) (collectively, “Rencher”) filed a verified complaint
against Wells Fargo Bank, N.A., and other banking defendants (collectively “Wells
Fargo”), alleging several claims arising from the attempted foreclosure of two apartment
complexes known as the Arcadia property and Sundown property. Rencher then filed a
motion for a temporary restraining order to delay the scheduled foreclosure sale of the
Sundown property, currently set for February 26, 2015.

MEMORANDUM DECISION AND ORDER - 1

BACKGROUND
On February 1, 2008, Wells Fargo, N.A. loaned Tamla Rencher approximately
$900,000 to purchase two commercial properties as part of a Business Lending loan.
Arcadia and Sundown guaranteed payment of the debt. Def’s SOF ¶ 72, Dkt. 13. The
commercial properties (“Arcadia” in Madison County and “Sundown” in Bonneville
County) are apartment complexes generating rental income from tenants and are not
residential properties. Id. ¶ 22. Wells Fargo Bank, N.A. filed a judicial foreclosure action
on the properties in Idaho state court and received an uncontested Judgment of
Foreclosure on July 29, 2011. Id. ¶¶ 26-28. Rencher, Arcadia, and Sundown appealed the
Judgment, which they lost, and an Amended Judgment and Decree of Foreclosure was
entered against them and recorded on November 10, 2011. Id. ¶¶ 28-31. The Judgment of
Foreclosure, with amendments, totals over a million dollars. A foreclosure sale of the
property located at 2001 West Broadway, Idaho Falls 83402 – the Sundown property – is
scheduled for February 26, 2015.
Rencher seeks to enjoin the foreclosure sale. Rencher maintains that the Wells
Fargo, N.A. loan was transferred to Wells Fargo Mortgage Backed Securities 2008-AR2
as part of the trust corpus of residential mortgage notes. Verified Compl. ¶ 6. At this
point, the note was apparently separated from the deed of trust. Rencher therefore argues
that Wells Fargo has no standing to foreclose because the notes on the properties were
securitized and sold, and therefore Wells Fargo no longer has any interest in the property.

MEMORANDUM DECISION AND ORDER - 2

LEGAL STANDARD
The standard for issuing a preliminary injunction is well established, and mirrors
that for a temporary restraining order. Stuhlberg Int'l Sales Co., Inc. v. John D. Brush &
Co., Inc., 240 F.3d 832, 839 n. 7 (9th Cir. 2001). “[I]njunctive relieve [is] an
extraordinary remedy that may only be awarded upon a clear showing that the [movant]
is entitled to such relief.” Winter v. Natural Res. Defense Council, Inc., 555 U.S. 7, 22
(2008). The party seeking relief must demonstrate that: (1) it is likely to succeed on the
merits; (2) it is likely to suffer irreparable harm absent relief; (3) the balance of equities
tips in its favor; and (4) the requested relief is in the public interest. Id. at 20. Under the
Ninth Circuit's “sliding scale” approach, the first and third elements can be balanced such
that “serious questions” going to the merits and a balance of hardships that “tips sharply”
towards the movant is sufficient so long as the other two elements are met. Alliance for
the Wild Rockies v. Cottrell, 632 F.3d 1127, 1134–35 (9th Cir. 2011).
ANALYSIS
Rencher fails to raise serious questions on the merits, or to demonstrate a
likelihood of irreparable harm. She therefore fails to meet the requirements of a
temporary restraining order.
Rencher’s main argument for why the foreclosure cannot go forward is that the
loan was securitized and, therefore, Wells Fargo does not have authority to foreclose.
But Rencher cites no case law to support this argument. Indeed, the Idaho Supreme Court
has held that “a trustee may initiate nonjudicial foreclosure proceedings on a deed of trust
MEMORANDUM DECISION AND ORDER - 3

without first proving ownership of the underlying note....” Trotter v. Bank of New York
Mellon, 275 P.3d 857 (Idaho 2012). And the Ninth Circuit has held that the splitting of
the note from the deed of trust does not extinguish the right to foreclose. Cervantes v.
Countrywide Home Loans, Inc., 656 F.3d 1034 (9th Cir. 2011). Finally, the Ninth Circuit
Bankruptcy Appellate Panel observed, the borrower (the maker of the note) “should be
indifferent as to who owns or has an interest in the note so long as it does not affect the
maker's ability to make payments on the note.” Veal v. Am. Home Mortgaging Serv., Inc.,
450 B.R. 897, 912 (9th Cir. BAP2011). All of these cases suggest that securitization of
the note does not affect the right to foreclose. Therefore, even accepting Rencher’s
allegation that the loan was securitized as true, Rencher fails to demonstrate a likelihood
of success on the merits.
Moreover, Rencher fails to demonstrate irreparable harm. Wells Fargo recorded
the foreclosure decree in November 2011. This is over 3 years before Rencher first filed
for emergency relief. Delay in seeking injunctive relief can imply a lack of urgency and
irreparable harm, and weighs against the propriety of such relief. Miller ex rel. NLRB v.
Cal. Pac. Med. Ctr., 991 F.2d 536, 544 (9th Cir. 1993); Lydo Enters. v. City of Las
Vegas, 745 F.2d 1211, 1213 (9th Cir. 1984).
ORDER
Plaintiffs Tamla Rencher, Rencher/Arcadia Apartments LLC, and
Rencher/Sundown LLC’s Motion for Temporary Restraining Order (Dkt. 9) is DENIED.

MEMORANDUM DECISION AND ORDER - 4

DAT
TED: Febru
uary 25, 20
015

__________
__________
_____
___
B. L
Lynn Winm
mill
Chief Judge
ited
District Cou
urt
Uni States D

MEMORA
ANDUM DECIS
SION AND ORDER - 5