Sellers et al v. Moynihan et al

Filing 18

ORDER: Denying Plaintiffs' Motion for a Temporary Restraining Order 17 . Signed on 1/7/2013 by Chief Judge Ann L. Aiken. (lg)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

DONALD H. SELLERS, and GABRIELLE
LEGUALT,
No. 6:12-cv-1654-AA

Plaintiffs,

ORDER

v.

BRIAN T. MOYNIHAN, and/or his
successor, individually and in his
official capacity as President/CEO
of BAC HOME LOANS SERVICING, LP,
en legis being used to conceal
fraud; JAMES F. TAYLOR, and/or his
successor, individually and in his
official capacity as President of
Finance & Administration RECONTRUST)
COMPANY, N.A., en legis being used)
to conceal fraud;
)
BRIAN T. MOYNIHAN, and/or his
)
successor, individually and in his )
official capacity as President/CEO )
of BANK OF AMERICA, en legis being )
used to conceal fraud; ANGELO
)
MAZILO, and/or his successor,
)
individually and in his official
)
capacity as President/CEO of
)
COUNTRYWIDE HOME LOANS, INC., en
)
legis being used to conceal fraud; )
R.K. ARNOLD and/or his successor,
)
individually and in his official
)
capacity as President/CEO of
)
MORTGAGE ELECTRONIC REGISTRATION
)
SYSTEMS, INC., en legis being used)
to conceal fraud; JOHN AND JANE
)
DOES (Investors) 1-10,000 and XYZ
)
CORPORATIONS 1-10,
)

)
Defendants.

)
)
____________________________________ )
1 - ORDER

AIKEN, Chief Judge:
Plaintiffs

initiated

this

suit

injunctive relief on September 13,

seeking

2012,

declaratory

and

attempting to halt

a

foreclosure sale scheduled about one hour after the filing of the
complaint.
§

4

At that time, plaintiffs sought relief under 18 U.S.C.

(misprision

violations

of

a

of

felony)

variety

of

and

42

criminal

U.S.C.

1983,

§

statutes

and

alleging

the

Uniform

Commercial Code.

The court construed the complaint as alleging

violation of the

Oregon Trust

Deed Act,

O.R.S.

86.735,

via

unrecorded assignments in the interest in the mortgage note.

The

§

court also assumed allegations of a failure to timely respond to a
request

for

loan modification under O.R.S.

§

affidavits submitted along with the complaint.
the

plaintiffs'

preliminary

motion

injunction

for

a

because

temporary
the

86.737,

The court denied

restraining

complaint

based on

and

order

supporting

materials
fail to provide any evidence or even appropriate
allegations of unrecorded transfers of the deed or
underlying mortgage or adequate requests for modification
and subsequent failure to respond.
Indeed, plaintiffs
provide no discussion of the creation of the deed of
trust, the mortgage,- and any subsequent transfers.
The
court has no basis for determining whether any violations
of the Oregon Trust Deed Act have occurred. Plaintiff's
provide insufficient information regarding any agreement
resulting in the granting of a deed of trust or mortgage,
any default or lack thereof, any notice of default and
notice of sale, or any of possible violations of the
procedures for a non-judicial foreclosure. The court is
mindful of the pitfalls
awaiting mortgage lenders and
servicers who utilize the system instituted by defendant
2 - ORDER

and

Mortgage Electronic Registration Systems, Inc.
(MERS) ,
when availing themselves of non-judicial foreclosure
process.
See Niday v. GMAC Mortgage, LLC., 251 Or.App.
278 (2012).
However, simply naming MERS as a defendant
is insufficient to demonstrate a fair chance of success
in a suit to enjoin a non-judicial foreclosure.
Order (#6) dated September 13, 2012.
On December 3, 2012, the court granted a motion to dismiss,
without prejudice, because no plausible cause of action could be
discerned from the then operative complaint.

Plaintiffs have now

filed an amended complaint against Bank of America, Bank of America
Home

Loans,

Recontrust

Company,

MERS,

and

all

other

entities

asserting interest in the subject property.
Plaintiffs still assert their claims under 18 U.S.C.
42

U.S. C.

1983,

§

specifically.

but now refer to the Oregon Trust

Nonetheless,

plaintiffs

rely on

§

4 and

Deed Act

speculation and

assert that their "concern is that under MERS and CountryWide's
fraudulent practices, our property may have been sold, assigned or
otherwise become security for any number of unidentified investors
whose

subsequent

recorded."

monetary

interest

in

our

First Amended Complaint (#16) at

property
<JI

was

never

2.

Plaintiffs obtained a mortgage and executed a deed of trust in
favor of MERS, as nominal beneficiary for Guaranty Bank on or about
July 10, 2008.

Plaintiffs subsequently refinanced the mortgage and

executed a deed of trust in favor of MERS, as nominal beneficiary
for CountryWide, on or about May 20, 2009.

The materials submitted

demonstrate that the latter deed of trust was assigned to Bank Of
3·- ORDER

America after a merger with CountryWide and such assignment was
recorded on October 5, 2011.
was

On May 7, 2012, a notice of default

recorded with the Lane County Clerk,

above,
fraud

was scheduled for September 13,
in

connection with

this

notice

and a

as noted

Plaintiffs allege

2012.
of

sale,

default,

asserting forged signatures on the part of MERS.

specifically
The materials

submitted in connection with the motion to dismiss indicated that
Plaintiffs do also

the foreclosure sale, however, was canceled.

allege that they submitted applications for modification, but it is
unclear if they are asserting failure to timely respond to the
applications.
In addition to submitting the amended complaint, plaintiffs
renew

their

preliminary

application

for

a

temporary

restraining order

and

~njunction.

In seeking a temporary injunctive relief, plaintiffs must show
either

(1)

a

likelihood

of

success

on

the

merits

and

the

possibility of irreparable injury, or (2) the existence of serious
questions going to the merits and the balance of hardships tipping
in their favor.

The critical element in determining the test to be

applied is the relative hardship to the parties.

If the balance of

harm tips decidedly toward the plaintiffs, then the plaintiffs need
not show as robust a likelihood of success on the merits as when
the balance tips less decidedly.
F.2d 417, 422 (9th Cir. 1991).

4 - ORDER

Gilder v.

PGA Tour,

Inc.,

936

For purposes of injunctive relief,

serious questions refers to questions which cannot be resolved one
way or the other at the hearing on the injunction and as to which
the court perceives a need to preserve the status quo lest one side
prevent resolution of the questions or execution of any judgment by
altering the status quo.

Id.

difficult

as

and

doubtful,

Serious questions are substantial,
to

make

them

a

fair

ground

litigation and thus for more deliberative investigation.

for

Serious

questions need not promise a certainty of success, nor even present
a

probability

of

success,

success on the merits.

but

must

involve

a

fair

chance

of

Id.

Even if the balance of hardships tips sharply in plaintiffs'
favor,
there

however,
is

a

fair

it must be shown as an irreducible minimum that
chance

of

success

on the merits.

Stanley v.

University of Southern California, 13 F.3d at 1313, 1319.
Although plaintiffs'

(1994).

amended complaint does provide a more

plausible cause of action, it fails to demonstrate what action must
be enjoined pending litigation. As noted above,
sale has been canceled.

the foreclosure

Moreover, attached to the complaint is a

rescission of notice of default recorded in Lane County on October
5, 2012.

Ex. M (attached to First Amended Complaint (#16).

that plaintiffs can only speculate, at this time,
of

the

Oregon

Trust

Deed

Act

has

occurred,

demonstration a strong likelihood of success.

th~t

they

Given

a violation
have

not

In addition,

the

lack of a notice of default and pending foreclosure sale prevent a

5 - ORDER

finding of irreparable harm.

Accordingly, the motion for temporary

injunctive relief is denied.

CONCLUSION
For

the

reasons

stated

above,

plaintiffs'

Motion

temporary restraining order (#17) is denied.
DATED this

~day

;

6 - ORDER

of January, 2013.

aMA!lk

Ann Aiken
United States District Judge

for

a