Stewart et al v. American Homestead Mortgage, LLC et al

Filing 11

ORDER denying 9 Motion for Preliminary Injunction and Hearing; denying 10 Motion for Permanent Injunction. Signed by Judge Donald W. Molloy on 4/2/2014. (TAG, )

FILED
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION

RONALD STEWART and LYDIA
STEWART,

APR 022014
Clerk, u.s District Court
District Of Montana
Missoula

CV 14--45-M-DWM

Plaintiffs,

ORDER

vs.
AMERICAN HOMESTEAD
MORTGAGE, LLC; FLAGSTAR BANK,
FSB; SELENE FINANCE, LP;
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC, and
FIRST AMERICAN TITLE OF
MONTANA, INC., and all other parties
known or unknown thereof
Defendants.
The Stewarts, proceeding pro se, allege the defendants are attempting to
wrongfully foreclose on the Stewarts' property at 119 Rimrock Court in Kalispell,
Montana. The Stewarts apply for a second time for a preliminary injunction and
request a hearing. (Doc. 9.) They have also moved for a permanent injunction
barring the sale of their home. (Doc. 10.) The defendants have not filed any
opposition with the Court thus far. Having considered the pleadings and
arguments offered by the Stewarts, their requests are denied.

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The Ninth Circuit has set forth two separate sets of criteria for determining
whether to grant preliminary injunctive relief:
Under the traditional test, a plaintiff must show: (1) a strong likelihood
of success on the merits, (2) the possibility of irreparable injury to
plaintiff if preliminary relief is not granted, (3) a balance of hardships
favoring the plaintiff, and (4) advancement of the public interest (in
certain cases). The alternative test requires that a plaintiff demonstrate
either a combination of probable success on the merits and the
possibility of irreparable injury or that serious questions are raised and
the balance of hardships tips sharply in his favor.

Taylor v. Westly, 488 F.3d 1197, 1200 (9th Cir. 2007). "These two formulations
represent two points on a sliding scale in which the required degree of irreparable
harm increases as the probability of success decreases." Id. Serious questions on
the merits are apparent only when a plaintiff shows a "substantial case for relief on
the merits." Leiva-Perez v. Holder, 640 F.3d 962, 968 (9th Cir. 2011).
A plaintiff seeking a permanent injunction must demonstrate: "(1) that it has
suffered an irreparable injury; (2) that remedies available at law, such as monetary
damages, are inadequate to compensate for that injury; (3) that, considering the
balance of hardships between the plaintiff and defendant, a remedy in equity is
warranted; and (4) that the public interest would not be disserved by a permanent
injunction." eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006). The
standard for issuing a permanent injunction is substantially the same as that

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applied to a request for preliminary injunctive relief. After considering the
foregoing analyses in the present case, the Stewarts' requests are denied.
This Court has previously addressed the Stewarts' likelihood of success
based on the arguments presented in their Complaint, determining that preliminary
injunctive relief was not warranted. (Doc. 8 (denying the Stewarts' first motion
for a preliminary injunction and request for a temporary restraining order).) In
their filings on the current motions, the Stewarts reassert their position that the
defendants do not have the legal rights to sell the property. As previously
discussed, to the extent the Stewards are arguing that the defendants do not have
the power to foreclose their property because the mortgage has been transferred,
that argument will likely fail: "The fact that transfers of a promissory note and an
associated deed of trust result in different entities holding those interests does not
cloud title to the property and does not provide a basis on which to quiet title in
the mortgagor." Heffnerv. Banko!Am., 2012 WL 1636815, *4 (D. Mont. May 8,
2012) (collecting cases). As to the Stewarts' proof of claim argument, they fail to
show why the defendants are required to provide the Stewarts with a "proof of
claim." A "proof of claim," as the term is commonly used, is a "written statement
setting forth a creditor's claim" that must sometimes be filed in bankruptcy
proceedings. See e.g. 11 U.S.C. § 501; Fed. R. Bankr. P. 3001-3002. The
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Stewarts cite no authority requiring the defendants to file a proof of claim in the
foreclosure context.
The Stewarts further contend they are likely to succeed on the merits on the
grounds that they are entitled to default judgment because the defendants have
failed to file an answer. However, the Stewarts have not requested entry of a
default judgment, Fed. R. Civ. P. 55(b), or provided proof of service to the Court,
Fed. R. Civ. P. 4(1). The possibility of default judgment is insufficient to grant
their request for a permanent injunction.
Ultimately, the Stewarts' fail to meet the burden for imposing injunctive
relief. Even if the Court were to find the Stewarts' claims for were likely to
succeed on the merits, the Stewarts have failed to present any argument or
evidence to support the proposition that an injunction would be in the interest of
the public or that the balance of equities are tipped in their favor other than to
contend that if the defendants successfully defended this suit they would still be
able to foreclose. Moreover, the Stewarts have failed to identifY when the trustee
sale is scheduled to occur.
Accordingly, IT IS ORDERED that the Stewarts' motion for a preliminary
injunction and hearing (Doc. 9) is DENIED.
IT IS FURTHER ORDERED that the Stewarts' application for a permanent
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injunction (Doc. 10) is DENIED.

Dated this

~day of April, 2014.

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