Lemoss et al v. Metlife Bank, N.A. et al
Filing
8
Temporary Restraining Order. The Court GRANTS Plaintiffs' Motion 3 for a Temporary Restraining Order and hereby RESTRAINS Defendants from proceeding with the August 14, 2012, foreclosure sale of Plaintiffs' property. The Court DIRECTS Plaintiffs to post a $750 bond with the Clerk of Court by 12:00 p.m., August 20, 2012. This Order expires on August 20, 2012, at 1:30 p.m., unless extended by order of the Court. Signed on 08/10/2012 by Judge Anna J. Brown. (bb)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION
VAUGHN M. LEMOSS and KAMI R.
LEMOSS,
Plaintiffs,
1:12-CV-1405-BR
TEMPORARY RESTRAINING
ORDER
v.
METLIFE BANK N.A., and
QUALITY LOAN SERVICE
CORPORATION,
Defendants.
RICHARD L. BILLIN
P.O. Box 279
Medford, OR 97501
(541) 776-9900
Attorney for Plaintiffs
BROWN, Judge.
This matter came before the Court on August 8, 2012, on
Plaintiffs' ex parte Motion (#3) for Temporary Restraining Order
pursuant to Federal Rule of Civil Procedure 65 seeking to halt a
foreclosure and sale of their home scheduled for August 14, 2012.
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The Court held a telephone conference on August 10, 2012, at
which counsel for Plaintiffs appeared ex parte.
For the reasons
that follow, the Court GRANTS Plaintiffs' Motion and temporarily
RESTRAINS Defendants from proceeding with the August 14, 2012,
foreclosure sale of Plaintiffs' property at 820 and 822 N.W. 8 th
Street, Grants Pass, Oregon.
BACKGROUND
The following facts are taken from Plaintiff's filings:
Plaintiffs allege they are owners of real property in Grants
Pass, Oregon, and the property is encumbered by a mortgage loan
consummated on September 9, 2005, which is secured by a Deed of
Trust.
On the Deed of Trust First Horizon Home Loan Corporation
is designated as the lender and Mortgage Electronic Registration
System (MERS) is designated as both a nominee of First Horizon
and as the beneficiary of the Deed of Trust.
Ticor Title
Insurance Company is listed as the Trustee.
Plaintiffs allege "it is claimed"
that Plaintiffs became
delinquent on their mortgage in June 2010.
In September 2010
MERS assigned the Deed of Trust to Defendant Metlife Bank N.A.,
and the assignment was recorded in the Josephine County records.
Metlife, in turn, appointed a new Trustee, First American Title
Insurance Company.
In October 2010 First American issued and
recorded a Notice of Default on Plaintiffs' mortgage and moved to
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foreclose.
The parties agreed to cancel the sale after the
issuance of a preliminary injunction by a state-court judge in
Josephine County in early 2011.
In December 2011 Metlife appointed a successor Trustee,
Defendant Quality Loan Service Corporation of Washington, and
recorded that appointment.
Quality Loan issued a second Notice
of Default in March 2012 scheduled a sale for August 14, 2012.
On August 3, 2012, Plaintiffs filed their Complaint (#1) in
this Court in which they assert a single state-law claim against
Defendants for wrongful foreclosure for failure to record
transfers of Deed of Trust in violation of the Oregon Trust Deed
Act, Oregon Revised Statute
§
86.375.
Plaintiffs generally
allege there have been unrecorded assignments of the beneficial
interest in the Deed of Trust as a part of a securitized pool of
mortgages.
Plaintiffs also specifically allege there are
unrecorded assignments of the deed of trust:
"[T]here is no
recorded assignment of the loan and deed of trust from First
Horizon Home Loan Corporation to First Tennessee Bank National
Association, nor is there a recorded assignment to Federal
National Mortgage Association MBS Express, the current
beneficiary of the loan and deed of trust."
3 - TEMPORARY RESTRAINING ORDER
STANDARDS
A party seeking a temporary restraining order or preliminary
injunction must demonstrate (1) it is likely to succeed on the
merits,
(2) it is likely to suffer irreparable harm in the
absence of preliminary relief,
(3)
the balance of equities tips
in its favor, and (4) an injunction is in the public interest.
Winter v. Natural Res. Def. Council,
129 S. Ct. 365, 374
(2008).
"The elements of [this] test are balanced, so that a stronger
showing of one element may offset a weaker showing of another.
For example, a stronger showing of irreparable harm to plaintiff
might offset a lesser showing of likelihood of success on the
merits."
Alliance For The Wild Rockies v. Cottrell,
No. 09-35756, 2011 WL 208360, at *4
2011) (citing Winter,
129 S.
ct.
(9 th Cir. Jan. 25,
at 392).
Accordingly, the Ninth
Circuit has held "'serious questions going to the merits' and a
balance of hardships that tips sharply towards the plaintiff can
support issuance of a preliminary injunction, so long as the
plaintiff also shows that there is a likelihood of irreparable
injury and that the injunction is in the public interest."
Id.,
at *7.
"An injunction is a matter of equitable discretion" and is
"an extraordinary remedy that may only be awarded upon a clear
showing that the plaintiff is entitled to such relief."
129 S. Ct. at 376, 381.
4 - TEMPORARY RESTRAINING ORDER
Winter,
DISCUSSION
I.
Merits
Plaintiff seeks an order preventing Defendants from
proceeding with the proposed foreclosure sale of Plaintiffs'
property as scheduled.
Plaintiffs allege violations of the
Oregon Trust Deed Act and contend the various alleged assignments
of the mortgage were unlawful and, accordingly, contend
Defendants may not rely on a nonjudicial foreclosure.
On the basis of the July 18, 2012, Oregon Court of Appeals
decision in Niday v. GMAC Mortgage LLC, 251 Or. App. 278
(2012),
Plaintiffs also contend MERS is not the actual beneficiary of the
Deed of Trust and did not have the power to assign the mortgage.
Without recounting the significant legal disputes among
Oregon and federal trial courts over the meaning of
§
86.375, the
Court notes the Oregon Supreme Court has recently accepted this
Court's certification of questions under
§
86.375 concerning,
inter alia, the role of MERS as a beneficiary in Oregon deeds of
trust, the nature of transfers of the beneficial interests in
deeds of trust, and the recording requirements for any such
transfers.
Thus, notwithstanding the Niday decision, there
remains a significant question as to whether MERS could assign
Plaintiffs' Deed of Trust and whether the numerous assignments
Plaintiffs have alleged were required to be recorded before
Defendants could resort to nonjudicial foreclosure.
5 - TEMPORARY RESTRAINING ORDER
Moreover, it is not yet clear whether all of the assignments
of Plaintiffs' mortgage have, in fact, been recorded.
In light
of the legal footing of this matter, Plaintiffs have demonstrated
a sufficient likelihood of success on the merits.
Plaintiff also has established they will likely experience
irreparable harm (i.e., the loss of their home) if the scheduled
foreclosure proceeds unabated, and that hardship outweighs any
short delay suffered by Defendants in executing a sale.
The
Court, therefore, concludes the balance of hardships tips sharply
in Plaintiffs' favor at this time, and there are at the least
legitimate questions raised on this record as to the merits of
Plaintiffs' claim.
Accordingly, the Court GRANTS Plaintiffs' Motion for a
Temporary Restraining Order and hereby RESTRAINS Defendants from
proceeding with the August 14, 2012, foreclosure sale of
Plaintiffs' property at 820 and 822 N.W. 8th Street, Grants Pass,
Oregon.
II.
Notice under Federal Rule of Civil Procedure 65
Federal Rule of Civil Procedure 65(b) provides in pertinent
part:
(1) Issuing Without Notice.
The court may issue a
temporary restraining order without written or
oral notice to the adverse party or its attorney
only if:
(A) specific facts in an affidavit or a
verified complaint clearly show that
immediate and irreparable injury, loss, or
6 - TEMPORARY RESTRAINING ORDER
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.
Here the Court issues the order temporarily restraining
Defendants from proceeding with the proposed foreclosure sale of
Plaintiffs' property without notice to Defendants because there
is insufficient time before the scheduled foreclosure sale to
compel Defendants to appear and to respond to the Motion.
The
Court concludes the risk of irreparable harm to Plaintiffs is
significant when weighed against the temporary delay authorized
by this Order.
III. Security
Pursuant to Rule 65(c), the Court requires Plaintiffs to
post a $750 bond with the Clerk of Court by 12:00 p.m.,
August 20, 2012, as a reasonable security for any costs or
damages sustained by any party found to have been wrongfully
restrained.
CONCLUSION
For these reasons, the Court GRANTS Plaintiffs' Motion (#3)
for a Temporary Restraining Order and hereby RESTRAINS Defendants
from proceeding with the August 14, 2012, foreclosure sale of
Plaintiffs' property.
The Court DIRECTS Plaintiffs to post a
7 - TEMPORARY RESTRAINING ORDER
$750 bond with the Clerk of Court by 12:00 p.m., August 20, 2012.
IT IS SO ORDERED.
DATED this 10th day of August, 2012.
This order is issued on August 10, 2012, at 4:00 p.m., and
expires on August 20, 2012, at 1:30 p.m., unless extended by
order of the Court.
A~
United States District Judge
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