Salvador v. National Default Servicing Corporation et al

Filing 7

ORDER that 1 , exhibit C Plaintiff's Motion for Temporary Restraining Order is DENIED. Signed by Judge James C. Mahan on 6/13/13. (Copies have been distributed pursuant to the NEF - EDS)

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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LEODEGARIO SALVADOR,

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2:13-CV-1011 JCM (GWF)

Plaintiff(s),

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v.

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NATIONAL DEFAULT SERVICING
CORPORATION, et al.,

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Defendant(s).

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ORDER
Presently before the court is pro se plaintiff Leodegario Salvador’s motion for a temporary

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restraining order. (Doc. # 1, Exh. C).

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Plaintiff originally filed this action in state court on or about May 9, 2013. (See doc. # 1,

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Exh. A, compl.). Plaintiff filed the instant motion for a temporary restraining order ex parte on or

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about May 23, 2013. (Doc. # 1, Exh. C).

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Defendant Wells Fargo removed to this court on June 6, 2013. At the time of removal, the

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state court had yet to decide the motion for a temporary restraining order. After reviewing the

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complaint, the motion, and all other attached documents, the court declines to grant injunctive relief

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for the reasons stated infra.

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I.

Background

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This is a mortgage and foreclosure related lawsuit regarding properly located at 4228

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Rollingstone Drive, Las Vegas, Nevada, 89103. The previous owner of the subject property was

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James C. Mahan
U.S. District Judge

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Gregory Comstock. (Compl. at ¶ 2). Comstock eventually became delinquent on his homeowner

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association (“HOA”) fees and/or dues. (Id. at ¶ 6). Plaintiff alleges that he acquired the property

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on or about September 26, 2012, by successfully bidding on the property at an HOA foreclosure sale

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pursuant to NRS 116.3116 et seq.

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In addition to becoming delinquent on HOA fees and/or dues, Comstock also defaulted on

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his mortgage payments. A notice of default and election to sell under the deed of trust was recorded

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on or about December 14, 2012. A trustee sale is currently scheduled for June 20, 2013.

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Plaintiff has filed the instant motion for a temporary restraining order to enjoin certain
defendants from conducting the scheduled trustee sale.
II.

Legal Standard

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According to Federal Rule of Civil Procedure 65, a court may issue a temporary restraining

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order when the moving party provides specific facts showing that immediate and irreparable injury,

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loss, or damage will result before the adverse party’s opposition to a motion for preliminary

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injunction can be heard. Fed. R. Civ. P.65. “The purpose of a temporary restraining order is to

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preserve the status quo before a preliminary injunction hearing may be held; its provisional remedial

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nature is designed merely to prevent irreparable loss of rights prior to judgment.” Estes v. Gaston

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et al, no. 2:12-cv-1853-JCM-VCF, 2012 WL 5839490, at *2 (D. Nev. Nov. 16., 2012) (citing Sierra

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On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1422 (9th Cir. 1984). “Thus, in seeking a

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temporary restraining order, the movant must demonstrate that the denial of relief will expose him

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to some significant risk of irreparable injury.” Id. (quoting Associated Gen. Contractors of

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California v. Coalition of Economic Equity, 950 F.2d 1401, 1410 (9th Cir. 1991).

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“Issuance of a temporary restraining order, as a form of preliminary injunctive relief, is an

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extraordinary remedy, and plaintiffs have the burden of proving the propriety of such a remedy by

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clear and convincing evidence.” Id.; Winter v. N.R.D.C., 555 U.S. 7, 24 (2008) (“A preliminary

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injunction is an extraordinary remedy never awarded as a right.”). The Supreme Court has stated

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that a plaintiff must establish each of the following to secure an injunction: (1) a likelihood of

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success on the merits; (2) likelihood of irreparable injury if preliminary relief is not granted; (3)

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James C. Mahan
U.S. District Judge

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balance of hardships; and (4) advancement of the public interest. Winter, 555 U.S. at 20-24 (2008).

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Plaintiff must “make a showing on all four prongs.” Alliance for the Wild Rockies v. Cottrell, 632

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F.3d 1127, 1135 (9th Cir. 2011).

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III.

Discussion

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Plaintiff must establish each of the four Winter elements, as it is a four-part conjunctive test.

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Plaintiff’s motion for a temporary restraining order fails because he cannot show a likelihood of

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success on the merits.

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A.

Likelihood of Success on the Merits

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Plaintiff cannot show a likelihood of success for two reasons.1 First, “plaintiff is required

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to (1) produce a copy of the assessment lien upon which the foreclosure was based and (2) allege that

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the assessment lien chronologically precedes the deed of trust.” Weeping Hollow Ave. Trust v.

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Spencer, no. 2:13-cv-00544-JCM-VCF, 2013 WL 2296313, at *5 (D. Nev. May 24, 2013) (citing

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Centeno v. Mortg. Elec. Registration Sys., no. 2:11-cv-02105-GMN-RJJ, 2012 WL 3730528 (D.

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Nev. Aug. 28, 2012)).

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In this case, the complaint does not allege that the assessment lien by the HOA

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chronologically predates the recordation of the deed of trust. The complaint could not allege such

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a fact in good faith because the deed of trust was recorded on or about October 9, 2008, while the

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first delinquent assessment lien for failure to pay HOA fees and/or dues was recorded on or about

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April 20, 2009. The deed of trust was recorded more than six months before the first recordation of

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the first delinquent assessment lien by the HOA.

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The second reason plaintiff cannot establish a likelihood of success on the merits is because

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he misreads NRS 116.3116(2)(b) and ©. This court has held that “NRS 116.3116(2)© creates a

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limited super priority lien for 9 months of HOA assessments leading up to the foreclosure of the first

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mortgage, but it does not eliminate the first security interest.” Weeping Hollow, 2013 WL 2296313,

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at *6 (quoting Diakonos Holdings, LLC v. Countrywide Home Loans, Inc., no. 2:13-cv-00949-KJD-

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James C. Mahan
U.S. District Judge

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The motion actually fails for more than two reasons. However, the court need not discuss each of them. Two
suffice to sufficiently foreclose a likelihood of success on the merits.

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RJJ, 2013 WL 531092, at *3 (D. Nev. Feb. 11, 2013)); see also First 100, LLC v. Wells Fargo Bank,

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N.A. et al, 2:13-cv-00431-JCM-PAL, order, document number 29. Plaintiff’s purchase of the subject

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property at an HOA foreclosure did not eliminate the first security interest. This holding has become

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well-established both in Nevada state and federal courts. See Weeping Hollow, 2013 WL 2296313,

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at *4-7 (reviewing state and federal cases on this issue in addition to the legislative history).

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Accordingly,

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that plaintiff’s motion for a

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temporary restraining order (doc. # 1, Exh. C) be, and the same hereby, is DENIED.
DATED June 13, 2013.

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UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge

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