Volcano Developers LLC et al v. Bonneville Mortgage et al

Filing 30

ORDER Denying 20 Motion for a Temporary Restraining Order; and Denying 19 Motion for a Preliminary Injunction. Signed by Judge Gloria M. Navarro on 8/1/11. (Copies have been distributed pursuant to the NEF - MMM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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VOLCANO DEVELOPERS, LLC, et al., )
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Plaintiffs,
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vs.
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BONNEVILLE MORTGAGE
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COMPANY, et al.,
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Defendants.
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Case No.: 2:11-cv-00504-GMN-PAL
ORDER

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Pending before the Court is Plaintiffs‟ Application for a Temporary Restraining Order

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(ECF No. 20) and Motion for a Preliminary Injunction (ECF No. 19). Defendants have filed

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Responses (ECF Nos. 22, 23, & 24), to which Plaintiffs have filed Replies (ECF Nos. 26 & 27).

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For the reasons that follow, both Plaintiffs‟ Application (ECF No. 20) and its Motion (ECF No.

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19) will be DENIED.

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I.

Standard for Granting a TRO or Preliminary Injunction

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Temporary restraining orders (“TROs”) are governed by the same standards applicable

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to preliminary injunctions. See Cal. Indep. Sys. Operator Corp. v. Reliant Energy Servs., Inc.,

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181 F. Supp. 2d 1111, 1126 (E.D. Cal. 2001). A TRO or preliminary injunction may be issued

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if a plaintiff establishes: (1) that he is likely to succeed on the merits; (2) that he is likely to

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suffer irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips

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in his favor; and (4) that an injunction is in the public interest. Winter v. Natural Resources

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Defense Council, Inc., 555 U.S. 7, 20 (2008). Alternatively, “„serious questions going to the

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merits‟ and a balance of hardships that tips sharply towards the plaintiff can support issuance of

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a preliminary injunction, so long as the plaintiff also shows that there is a likelihood of

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irreparable injury and that the injunction is in the public interest.” Alliance for the Wild Rockies

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v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011).
“It frequently is observed that a preliminary injunction is an extraordinary and drastic

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remedy, one that should not be granted unless the movant, by a clear showing, carries the

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burden of persuasion.” Mazurek v. Armstrong, 520 U.S. 968, 973 (1997) (quoting 11 C. Wright,

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A. Miller, & M. Kane, Federal Practice and Procedure § 2948 (2d ed. 1995)).

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II.

Analysis
Plaintiffs seek to enjoin Defendants from foreclosing on the real property located at

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5439 South Decatur Blvd., Las Vegas, Nevada, 89118. They bring their request for a TRO or

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preliminary injunction on three separate grounds. First, they contend that the Notice of Default

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is deficient under Nev. Rev. Stat. § 107.080 because it “does not even specify the amount of the

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Default.” (Mot. 11:1, ECF Nos. 19 & 20.) Second, they argue, somewhat confusingly, that

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“Plaintiffs made a payment on May 5 2011 so as to the amount for which is allegedly owing,

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Defendants do not know of.” (Mot. 11:2-3, ECF Nos. 19 & 20.) Third, they explain that “it

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seems that said Notice of Default was done in retaliation of Plaintiffs [sic] initiation of said

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proceedings against Defendants collectively.” (Mot. 11:3-4, ECF Nos. 19 & 20.) All three of

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these grounds are insufficient to warrant injunctive relief.1
First, Nev. Rev. Stat. § 107.080 does not require that a Notice of Default explicitly state

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the exact amount of the default. Instead, Nev. Rev. Stat. § 107.080(3)(a) merely requires that

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the Notice of Default “[d]escribe the deficiency in performance or payment . . . .” Here, the

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Notice of Default adequately describes the deficiency in performance, stating:

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Plaintiffs also briefly argue that “Plaintiffs‟ Application and Motion for a Preliminary Injunction should be granted since
Plaintiff is very likely to succeed on the merits of their claims for the failure to have the Loan Assumption Agreement
transferred from WOLFE to ELEZRA.” (Mot. 13:3-6, ECF Nos. 19 & 20). However, Plaintiffs fail to explain how the
likelihood of success on the merits with regard to that claim is relevant to the foreclosure proceedings that were initiated in
May of 2011. As Defendants accurately observe in their Response, “Plaintiffs also fail to provide this Court with any
evidence that the failure to consummate the assumption caused the financial issues which led to the default and
commencement of trustee‟s sale proceedings by [Defendants].” (Resp. 7:18-20, ECF No. 23.) Plaintiffs do not rebut this
observation in their Reply, nor do they provide any other basis for finding that the resolution of their claims related the Loan
Assumption Agreement is relevant to the instant motions. Thus, this argument fails to establish that Plaintiffs are entitled to
the “extraordinary and drastic remedy” of injunctive relief.

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That a breach of the obligations for which said Deed of Trust is
security has occurred in that payment has not been made of:
INSTALLMENT OF PRINCIPAL AND INTEREST PLUS
IMPOUNDS AND / OR ADVANCES WHICH BECAME DUE ON
05/01/2011 PLUS LATE CHARGES, AND ALL SUBSEQUENT
INSTALLMENTS OF PRINCIPAL, INTEREST, BALLOON
PAYMENTS, PLUS IMPOUNDS AND / OR ADVANCES AND
LATE CHARGES THAT BECOME PAYABLE.

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(Ex. B, Resp., ECF No. 23.) Further, the Notice provides Plaintiffs with the requisite contact

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information to allow them “[t]o find out the amount you must pay” or “to arrange for payment

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to stop foreclosure.” (Id.) Because this Notice complies with the statutory requirements,

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Plaintiffs are not likely to succeed on the merits of this argument, nor do they raise a serious

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issue going to the merits.

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Plaintiffs‟ second argument is a bit more difficult to decipher, but it appears that

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Plaintiffs are contending that it was inappropriate for Defendants to file a Notice of Default in

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light of the fact that Plaintiffs made a payment on May 5, 2011. In support of this line of

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argument, Plaintiff Danny Itzhaki declared that he “made a payment to Defendants in the

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amount of $4,000.00 for the month of May, which was cashed by Defendants.” (Mot. 16:14-15,

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ECF Nos. 19 & 20.) However, noticeably absent from Plaintiffs‟ Motion or Mr. Itzhaki‟s

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declaration is any allegation that the $4,000.00 payment effectively cured the default. As this

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Court has previously explained, “[i]n Nevada, a wrongful foreclosure claim is properly pled

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only if the plaintiff alleges that she was not in default.” Rupe v. First Franklin Financial Corp.,

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No. 2:11-cv-00166-GMN, 2011 WL 2559623, at *2 (D. Nev. June 27, 2011). Here, Plaintiffs

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do not argue that they are no longer in default, nor does the evidence support that position.

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Indeed, the letter from Defendants to Plaintiffs dated May 17, 2011--to which Plaintiffs do not

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object--clearly states that the amount due on May 1, 2011 was $5,754.00. (See Ex. C, Resp.,

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ECF No. 23.) $4,000.00 would therefore have been inadequate to cure Plaintiffs‟ default.

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Because Plaintiffs have failed to show that they were not in default at the time Defendants

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commenced foreclosure proceedings, Plaintiffs are not likely to succeed on the merits of this

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claim, nor do they raise a serious issue going to the merits.

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Lastly, Plaintiffs ask the Court to enjoin the foreclosure proceedings because they

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believe that the proceedings were commenced in retaliation for Plaintiffs instituting this

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lawsuit. Plaintiffs claim that retaliatory intent can be gleaned from Defendants‟ activities

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because “[c]ommon practice is generally to issue some kind of communication notifying

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Plaintiffs that the amount is late or due, and then follow through with alternative measures. In

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this case, after cashing the mortgage payment, Defendants filed the notice of Default.” (Mot.

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11:8-11, ECF Nos. 19 & 20.) Common practice or not, the May 17, 2011 letter from

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Defendants to Plaintiffs--which Plaintiffs do not contest--demonstrates that Defendants did, in

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fact, provide Plaintiffs with informal notice of the amount due more than a week before filing

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the Notice of Default. (See Ex. C, Resp., ECF No. 23.) Further, the June 3, 2011 letter from

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Defendants to Plaintiffs--which Plaintiffs also do not contest--demonstrates that Defendants

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actually returned the $4,000.00 payment to Plaintiffs, as it was insufficient to remedy the

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amount of the default. (See Ex. D, Resp., ECF No. 23.) Thus, even if a court may enjoin

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foreclosure proceedings when it finds that the proceedings were undertaken with retaliatory

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intent (Plaintiffs cite no authority indicating that courts have the ability to do so), Plaintiffs are

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not likely to succeed on the merits of such a claim, nor do they raise a serious issue going to the

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merits.

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Because all three of Plaintiffs‟ arguments in support of injunctive relief fail, their

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Application for a Temporary Restraining Order (ECF No. 20) and Motion for a Preliminary

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Injunction (ECF No. 19) will be denied.
CONCLUSION

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IT IS HEREBY ORDERED that Plaintiffs‟ Application for a Temporary Restraining
Order (ECF No. 20) is DENIED.

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IT IS FURTHER ORDERED that Plaintiffs‟ Motion for a Preliminary Injunction
(ECF No. 19) is DENIED.
DATED this 1st day of August, 2011.

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________________________________
Gloria M. Navarro
United States District Judge

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