Andrews et al v. Countrywide Bank, NA et al

Filing 15

ORDER denying 13 Plaintiffs Motion for Temporary Restraining Order, by Judge James L. Robart.(MD, cc to pltfs, called plaintiff, e-mail plaintiff)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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DAVID C. ANDREWS, et al.,

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Plaintiffs,

COUNTRYWIDE BANK, NA, et al.,
Defendants.

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ORDER DENYING PLAINTIFFS’
MOTION FOR A TEMPORARY
RESTRAINING ORDER

v.

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CASE NO. C15-0428JLR

I.

INTRODUCTION

This matter comes before the court on pro se Plaintiffs David C. and Melinda C.

17 Andrews’ (“the Andrews”) motion for a temporary restraining order (Mot. (Dkt. # 13))
18 and Defendants’ 1 opposition thereto (Resp. (Dkt. # 14)). The Andrews seek to prevent
19 the non-judicial sale of their property on April 10, 2015. (See id. at 1-2.) The court has
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Defendant Countywide Bank, NA, has not joined in the opposition. (See Resp. (Dkt.
# 14).) For ease of reference, however, the court will refer to the opponents of the motion as
22 “Defendants.”
ORDER- 1

1 reviewed the Andrews’ motion, Defendants’ opposition, the complaint, and the governing
2 law. Being fully advised, the court DENIES the Andrews’ motion for a temporary
3 restraining order. 2
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II.

BACKGROUND

On March 2, 2015, the Andrews filed this lawsuit in the Superior Court for King

6 County, Washington, against Defendants Countrywide Bank, NA (“Countrywide”);
7 Mortgage Electronic Registration Services, Inc. (“MERS”); Nationstar Mortgage, LLC
8 (“Nationstar”); DB Structured Products, Inc. (“DBSP”); Deutsche Alt-A Securities, Inc.
9 (“DAAS”); HSBC Bank USA, NA (“HSBC”); and Does 1-10. (Not. of Rem. (Dkt. # 1)
10 Ex. A (Dkt. # 1-1) at 2-98 (“Compl.”) at 1.) Their complaint alleges that their home loan
11 was paid off when their lender, Countrywide, sold the loan during securitzation, and that
12 the deed of trust securing the loan therefore should have been released at that time. (See
13 id. ¶¶ 14-16.) The complaint further alleges defective transfers of the promissory note
14 (see id. ¶¶ 17-24), and improper assignments of the deed of trust (see id. ¶¶ 26-38). On
15 the basis of these allegations, the complaint asserts claims for breach of contract (id.
16 ¶¶ 41-44); slander of title (id. ¶¶ 45-57); violation of the Fair Debt Collection Practices
17 Act (“FDCPA”), 15 U.S.C. § 1692, et seq. (id. ¶¶ 58-70); and declaratory relief (id.
18 ¶¶ 71-85).
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On March 19, 2015, MERS and Nationstar removed the lawsuit to this court. (See

20 Not. of Rem. at 1.) At the time of removal, the Andrews had a motion for a temporary
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22 7(b)(4).

The court finds that oral argument is unnecessary. See Local Rules W.D. Wash. LCR

ORDER- 2

1 restraining order pending in state court. (See Ver. of State Ct. Rec. (Dkt. # 2) Ex. A (Dkt.
2 # 2-1) at 123-30.) The Clerk noted the motion on this court’s calendar on March 27,
3 2015. (See Mot.) The motion seeks to restrain a trustee’s sale of the Andrews’ property
4 until a hearing can be held to determine whether Defendants should be enjoined from
5 foreclosing on the property. (See id. at 6.) In addition, the Andrews attach a completed
6 application to proceed in forma pauperis which details their present lack of financial
7 means and resulting inability to pay filing fees and court costs. 3 (See id. Ex. 1 (Dkt. # 138 1) at 1-2.)
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III.

DISCUSSION

A plaintiff seeking a temporary restraining order in federal court must meet the

11 standards for issuing a preliminary injunction. See Stuhlbarg Int’l Sales Co. v. John D.
12 Brush & Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001). Accordingly, the plaintiff must
13 establish (1) that he is likely to succeed on the merits, (2) that he is likely to suffer
14 irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips
15 in his favor, and (4) that an injunction is in the public interest. Winter v. Natural Res.
16 Def. Council, Inc., 555 U.S. 7, 20 (2008). In addition, a “preliminary injunction is
17 appropriate when a plaintiff demonstrates that serious questions going to the merits were
18 raised and the balance of hardships tips sharply in the plaintiff’s favor,” provided the
19 plaintiff also demonstrates that irreparable harm is likely and that the injunction is in the
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Because the Andrews did not remove this case from state court, they are not responsible

22 for paying the filing fees associated with commencing a new case in this court.
ORDER- 3

1 public interest. Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1134-35 (9th
2 Cir. 2011).
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Non-judicial foreclosures in Washington are governed by the Deed of Trust Act

4 (“DTA”), RCW ch. 61.24. Cox v. Helenius, 693 P.2d 683, 685 (Wash. 1985); see also
5 Vawter v. Quality Loan Serv. Corp. of Wash., 707 F. Supp. 2d 1115, 1121-22 (W.D.
6 Wash. 2010) (explaining the operation of the DTA), disagreed with on other grounds by
7 Walker v. Quality Loan Serv. Corp. of Wash., 308 P.3d 716, 720-24 (Wash. Ct. App.
8 2013). The procedure set forth in RCW 61.24.130 for restraining a trustee’s sale initiated
9 pursuant to the DTA is “the only means by which a grantor may preclude a sale once
10 foreclosure has begun with receipt of the notice of sale and foreclosure.” Cox, 693 P.2d
11 at 686. Specifically, under RCW 61.24.130(1), a court must “require as a condition of
12 granting the restraining order or injunction that the applicant pay to the clerk of the court
13 the sums that would be due on the obligation secured by the deed of trust if the deed of
14 trust was not being foreclosed.” RCW 61.24.130(1).
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The court does not question that the Andrews are likely to suffer irreparable harm

16 in the absence of a temporary restraining order. Indeed, they are at risk of losing their
17 home in an April 10, 2015, trustee’s sale. (See Mot. at 1-2.) The court cannot, however,
18 find serious questions, let alone a likelihood of success, on the merits of the Andrews’
19 claims as required to support a temporary restraining order. See Winter, 555 U.S. at 20;
20 Alliance for the Wild Rockies, 632 F.3d at 1134-35.
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First, a key allegation in the Andrews’ complaint rests on illogical and

22 unsupported assumptions about their home loan. In particular, the Andrews allege that
ORDER- 4

1 their loan was paid off when their lender, Countrywide, sold the loan on the secondary
2 market. (See Compl. ¶¶ 14-15 (“[Countrywide] being paid all sums due upon the
3 Andrews Note sold the Andrews Note to [DBSP] . . . .”).) The assumption underlying
4 this allegation appears to be that any payment a lender accepts in relation to a loan is a
5 payment of the sums due on the loan.
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The Andrews’ assumption misapprehends both the legal effect of a secondary

7 market loan sale and the Andrews’ obligations under their promissory note and deed of
8 trust. In a secondary market loan sale the buyer purchases the lender’s rights. See
9 Cashmere Valley Bank v. Dep’t of Rev., 334 P.3d 1100, 1102 (Wash. 2014) (“The
10 secondary market buyer acquires the right to receive the borrower’s principal and interest
11 payments on the home loan and also the right to foreclose on the home if the borrower
12 fails to make timely payments.”) No buyer would pay for those rights, however, if the
13 purchase discharged the borrower’s obligation and thereby rendered the rights valueless.
14 More importantly, the Andrews’ promissory note and deed of trust place the duty to
15 repay the loan on the Andrews and provide no indication that sale of the loan will
16 discharge that duty. 4 (See Compl. at 38-42 (“Promissory Note”) ¶ 1 (reciting the
17 Andrews’ promise to repay the principal plus interest as well as their understanding that
18 the lender may transfer the promissory note); Compl. at 45-56 (“Deed of Trust”) at 2, 919 10.)
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In addition, the Andrews have not provided the court with any documentation of the

22 alleged sale between Countrywide and DBSP.
ORDER- 5

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Furthermore, the allegation that sale discharged the loan is critical to the Andrews’

2 claims. It forms the foundation of the Andrews’ breach of contract claim (see id. ¶¶ 413 44), and is essential to at least their slander of title and FDCPA claims as well (see id.
4 ¶¶ 48(d)-(e), 51(d)(e), 53(d)-(e), 55(d)-(e), 64-65). (See also Mot. at 6 (“At the very basis
5 of Plaintiff’s Complaint . . . Plaintiff has alleged and can demonstrate at trial that
6 Defendants breached their contract . . . .”).) Thus, given this allegation’s flaws and its
7 importance to the Andrews’ complaint, the court cannot conclude that the Andrews have
8 demonstrated serious questions or a likelihood of success on the merits of their breach of
9 contract, slander of title, or FDCPA claims. 5
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Second, the Andrews also have not demonstrated serious questions or a likelihood

11 of success on the merits of their declaratory claims. Most of those claims merely ask the
12 court to make declarations out of the factual allegations underlying the Andrews’ other
13 causes of action. (Compare Compl. ¶¶ 71-85 with id. ¶¶ 41-70.) Such claims are
14 redundant and cannot support an independent declaratory cause of action. See Avirez,
15 Ltd. v. Resolution Trust Corp., 876 F. Supp. 1135, 1143 (C.D. Cal. 1995). Instead, these
16 claims must succeed or fail along with the causes of action to which they relate. See id.;
17 Ballard v. Chase Bank USA, NA, No. 10CV790 L(POR), 2010 WL 5114952, at *8 (S.D.
18 Cal. Dec. 9, 2010).
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In any event, the FDCPA claim is irrelevant for purposes of this motion, as the FDCPA
does not provide for injunctive relief. See 15 U.S.C. § 1692k; Taylor v. Quall, 471 F. Supp. 2d
1053, 1059 (C.D. Cal. 2007) (citing Weiss v. Regal Collections, 385 F.3d 337, 341 (3d Cir.
22 2004)).

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ORDER- 6

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To the extent that the complaint makes independent declaratory claims challenging

2 assignments of the promissory note and deed of trust, those claims also do not merit a
3 temporary restraining order. As an initial matter, a borrower generally lacks standing to
4 challenge the assignment of its loan documents unless the borrower shows that it is at a
5 genuine risk of paying the same debt twice. See, e.g., Borokowski v. BNC Mortgage,
6 Inc., No. C12-5867 RJB, 2013 WL 4522253, at *5 (W.D. Wash. Aug. 27, 2013); Brodie
7 v. Nw. Trustee Servs., Inc., No. 12-CV-0469-TOR, 2012 WL 6192723, at *2-3 (E.D.
8 Wash. Dec. 12, 2012). The Andrews have not alleged that they are subject to such a risk.
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In addition, the Andrews have not demonstrated any basis for their challenge to

10 MERS’s eligibility to assign the deed of trust. (See Compl. ¶¶ 26-28, 48-50.) Although
11 MERS is not an eligible beneficiary under the DTA, MERS may act as an agent of the
12 note-holder. See Bain v. Metropolitan Mortg. Grp., Inc., 285 P.3d 34, 47 (Wash. 2012).
13 Here, the deed of trust designates MERS as a beneficiary “acting solely as a nominee for
14 Lender and Lender’s successors and assigns.” (Deed of Trust at 2.) The Andrews cite no
15 authority for their contention that MERS is incapable of transferring its interest in a deed
16 of trust. Moreover, this court has twice rejected conclusory allegations that MERS lacks
17 the authority to transfer a deed of trust in cases similar to this one. See Zhong v. Quality
18 Loan Serv. Corp. of Wash., No. C13-0814JLR, 2013 WL 5530583, at *3 (W.D. Wash.
19 Oct. 7, 2013); Wilson v. Bank of Am., N.A., No. C12-1532JLR, 2013 WL 275018, at *8
20 (W.D. Wash. Jan. 24, 2013).
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The Andrews likewise fail to justify a temporary restraining order with their

22 allegations challenging the transfers and securitization of their promissory note. (See
ORDER- 7

1 Compl. ¶¶ 17-25; see also id. ¶¶ 72-77.) These allegations are difficult to comprehend, 6
2 and the Andrews have not explained them in their motion or provided any supporting
3 case authority. Even construing these allegations liberally, 7 the court cannot find in them
4 a valid legal claim, let alone a claim that presents serious questions or is likely to succeed
5 on the merits. See Winter, 555 U.S. at 20; Alliance for the Wild Rockies, 632 F.3d at
6 1134-35.
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Finally, even if the court could find serious questions or a likelihood of success on

8 the merits, the DTA would prevent the court from issuing a temporary restraining order.
9 The Andrews do not allege that they have deposited or are capable of depositing with the
10 clerk of the court the sums required under RCW 61.24.130(1). (See generally Compl.;
11 Mot.) Moreover, the Andrews’ application to proceed in forma pauperis indicates that
12 the Andrews are unable to deposit those sums. (See Mot. Ex. 1 at 1-2.) The inability to
13 comply with RCW 61.24.130(1) is fatal to the Andrews’ motion because, as the
14 Washington Supreme Court has made clear, the DTA provides the only means by which
15 one can seek to enjoin a trustee’s sale. Cox, 693 P.2d at 686. 8
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For example, the Andrews claim that “Defendant [DBSP] by bifurcating the payment
stream intangible obligation as a(transferable record) [sic] pursuant to RCW 62A.8-102
18 negotiating – selling (conveying) outside of negotiation – selling (conveying) the Andrews Note
to Defendant [DAAS], Defendant [DBSP] became the account debtor for the payment stream
19 (transferable record) intangible obligation sold to the Defendant [DAAS].” (Compl. ¶ 72.)

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See Bernhardt v. L.A. Cnty., 339 F.3d 920, 925 (9th Cir. 2003) (“Courts have a duty to
construe pro se pleadings liberally, including pro se motions[.]”).
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According to Defendants, the Andrews have discharged their personal liability in
bankruptcy. (See Resp. at 4 n.1.) That discharge does not affect the court’s ruling, however,
22 because discharge in bankruptcy generally “extinguishes only one mode of enforcing a claim—
ORDER- 8

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IV.

CONCLUSION

For the foregoing reasons, the court DENIES the Andrews’ motion for a

3 temporary restraining order (Dkt. # 13).
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Dated this 1st day of April, 2015.

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JAMES L. ROBART
United States District Judge

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namely, an action against the debtor in personam—while leaving intact another—namely, an
21 action against the debtor in rem.” Rhodes v. HSBC Bank USA N.A., No. C11-5303RJB, 2011
WL 3159100, at *4 (W.D. Wash. July 26, 2011) (emphasis in original) (quoting Dewsnup v.
Timm, 502 U.S. 410, 418 (1992)) (internal quotation marks omitted). Discharge in bankruptcy
22 also does not alter the deposit requirement of RCW 61.24.130(1). See id. at *5.
ORDER- 9