Aniel et al v. Aurora Loan Services LLC et al, No. 3:2010cv01042 - Document 8 (N.D. Cal. 2010)
Court Description: ORDER DENYING APPLICATION FOR TEMPORARY RESTRAINING ORDER. Signed by Judge Jeffrey S. White on 3/16/10. (jjo, COURT STAFF) (Filed on 3/16/2010)
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Aniel et al v. Aurora Loan Services LLC et al Doc. 8 1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 FERMIN SOLIS ANIEL, et al., Plaintiffs, 11 For the Northern District of California United States District Court 10 No. C 10-01042 JSW v. 12 AURORA LOAN SERVICES LLC, et al., 13 Defendants. ORDER DENYING APPLICATION FOR TEMPORARY RESTRAINING ORDER / 14 15 Now before the Court for consideration is the request for a temporary restraining order 16 filed by Plaintiffs, Fermin Solis Aniel and Erlinda Abibas Aniel (“Plaintiffs”).1 Having 17 considered the parties’ papers, relevant legal authority, the Court finds the matter suitable for 18 disposition without oral argument and VACATES the hearing set for March 17, 2010. The 19 Court HEREBY DENIES Plaintiffs’ request. 20 BACKGROUND 21 On November 2, 2005, Plaintiff Fermin Aniel (“Aniel”) executed a Promissory Note and 22 Deed of Trust relating to property located at 833 Clearfield Drive, Millbrae, California, 94030 23 (“the Property”). The Property is rental property and is not Plaintiffs’ primary residence. 24 (Compl. ¶¶ 1, 77-78.) Aniel obtained the loan for the Property from Bayporte Enterprises, Inc. 25 (Compl. ¶¶ 1, 7, 12-13, Exs. A, B.) The original servicer for the loan was Homecomings 26 Financial, LLC, however it transferred its servicing rights to Aurora Loan Services, LLC 27 28 Plaintiffs have not filed a formal application for a temporary restraining order. Rather, their request was included in their Complaint, which alleges that an auction of Plaintiffs’ rental property is scheduled for March 18, 2010. 1 Dockets.Justia.com 1 (“Aurora”) on or about April 1, 2008. (Id. ¶ 14, Ex. C.) In August 2008, Plaintiffs defaulted on 2 the loan and attempted, but failed, to obtain a loan modification. (See id. ¶¶ 16-21.) For the Northern District of California United States District Court 3 In February 2009, Plaintiffs filed a voluntary bankruptcy petition. (Id. ¶ 26.) Aurora, 4 through its counsel defendant McCarthy and Holthus, LLP (“McCarthy & Holthus”), filed a 5 motion for relief from the automatic stay. (Id. ¶¶ 28-31, Exs. P-S.) On January 15, 2010, the 6 Bankruptcy Court issued continued the stay on the condition that Plaintiffs make certain 7 payments to Aurora (the “Adequate Protection Order”). The Bankruptcy Court further ordered 8 that if the Plaintiffs defaulted on those obligations, Aurora would be entitled to lodge a 9 Declaration of Default and an Order Terminating the Automatic Stay. (See id. ¶¶ 34-36; see 10 also Aurora’s Request for Judicial Notice, Ex. 5.) Plaintiffs refused to make the payments to 11 Aurora, because they believe it is not the true owner of the note. (Compl. ¶ 36.) On or about 12 February 4, 2010, Aurora submitted a declaration of default to the Bankruptcy Court. (Id. ¶ 38.) 13 At some point thereafter, Plaintiffs received a Notice of Trustee’s Sale, which states that the 14 Property will be auctioned on March 18, 2010 at 1:00 p.m. (Id. ¶ 43, Ex. Z.) 15 On March 11, 2010, Plaintiffs filed the Complaint in this action against Defendants 16 Aurora, Mortgage Electronic Registration Systems, Inc. (“MERS”), Quality Loan Services 17 Corp. (“Quality”), and McCarthy & Holthus. Plaintiffs assert the following claims for relief: 18 (1) Violations of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692 et seq., 19 against Aurora, McCarthy & Holthus, and Quality; (2) Violations of California’s Rosenthal Fair 20 Debt Collection Practices Act, California Civil Code §§ 1788 et seq. (“Rosenthal Act”) against 21 Aurora, McCarthy & Holthus, and Quality; (3) Fraud against all Defendants; (4) Wrongful 22 Foreclosure against Aurora, McCarthy & Holthus, and Quality; (5) Request for Immediate 23 Injunctive Relief against all Defendants; (6) Declaratory Relief against all Defendants; and (7) 24 Quiet Title against all Defendants. 25 26 ANALYSIS A. Applicable Legal Standard. 27 In order to obtain a temporary restraining order, as with a preliminary injunction, 28 Plaintiffs “must establish that [they are] likely to succeed on the merits, that [they are] likely to 2 For the Northern District of California United States District Court 1 suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in 2 [their] favor, and that an injunction is in the public interest.” Winter v. Natural Resources 3 Defense Council, 129 S. Ct. 365, 374 (2008) (citations omitted). The Winter court also noted 4 that because injunctive relief is “an extraordinary remedy” it “may only be awarded upon a 5 clear showing that the plaintiff is entitled to such relief.” Id. at 375-76 (citing Mazurek v. 6 Armstrong, 520 U.S. 968, 972 (1997) (per curiam)). Thus “[i]n each case, courts ‘must balance 7 the competing claims of injury and must consider the effect on each party of the granting or 8 withholding of the requested relief.’ Id. at 376 (citing Amoco Production Co. v. Gambell, 480 9 U.S. 531, 542 (1987)). “‘In exercising their sound discretion, courts of equity should pay 10 particular regard for the public consequences in employing the extraordinary remedy of 11 injunction.’” Id. at 376-77 (citing Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 (1982)). 12 B. 13 Discussion. 1. Plaintiffs Have Not Met Their Burden To Show A Likelihood of Success on the Merits. 14 15 With respect to their wrongful foreclosure claim, Plaintiffs allege that Defendants 16 Aurora and Quality do not hold the note and, therefore, are not entitled to enforce the note or 17 institute foreclosure proceedings. (See generally Compl. ¶¶ 53, 57, 59-60, 66-71, 90.) Courts 18 that have addressed this issue have held that California law does not require that the trustee be 19 in possession of an original promissory note before it institutes a non-judicial foreclosure sale. 20 See, e.g., Hafiz v. Greenpoint Mortgage, Inc., 652 F. Supp. 2d 1039, 1043 (N.D. Cal. 2009); 21 Pantoja v. Countrywide Home Loan, Inc., 640 F. Supp. 2d 1177, 1186 (N.D. Cal. 2009); see 22 also Cilluffo v. Washington Mutual, 2010 WL 431896 at *3 (N.D. Cal. Feb. 2, 2010) (citing 23 cases). The record in this case demonstrates that the promissory note for Plaintiffs’ loan has 24 been endorsed to Aurora, that Aurora has obtained the beneficial interest in the Deed of Trust, 25 and that Quality is the Trustee. (See Compl. ¶¶ 18, 29, 33. Exs. E, N, S.) In light of these facts, 26 the Court concludes that Plaintiffs have not met their burden to show a likelihood of success on 27 the merits of the wrongful foreclosure claim. 28 3 In order to maintain a claim for quiet title, Plaintiffs must show that “they are the 1 2 rightful owners of the property, i.e. that they have satisfied their obligations under the Deed of 3 Trust.” See Kelley v. Mortgage Electronic Registration Systems, Inc., 642 F. Supp. 2d 1048, 4 1057 (N.D. Cal. 2009); Hafiz, 652 F. Supp. 2d at 1049-50; Gaitan v. Mortgage Electronic 5 Registration Systems, Inc., 2009 WL 2344729 at *12 (C.D. Cal. Oct. 5, 2009). Plaintiffs admit 6 that they have defaulted on the loan and have refused to comply with the Bankruptcy Court’s 7 Adequate Protection Order. Therefore, they have not met their burden to show a likelihood of 8 success on the merits on the claim for quiet title. 2. 9 Plaintiffs Have Not Met Their Burden to Show the Probability of Irreparable Harm. Plaintiffs allege that, if the Court fails to grant injunctive relief, it “would cause the 11 For the Northern District of California United States District Court 10 12 Plaintiffs to lose rental income from the property which would be used in Plaintiffs’ Chapter 11 13 Bankruptcy reorganization plan, and prevent Plaintiffs the opportunity to adjudicate the issues 14 raised” in the complaint and “would cause the Plaintiffs irreparable harm of public humiliation 15 and loss of reputation in the community.” (Compl. ¶¶ 78-79.)2 16 “[F]oreclosure under certain circumstances may constitute irreparable harm.” 17 Mandrigues v. World Savings, Inc., 2009 WL 160213 at *3 (N.D. Cal. Jan. 20, 2009). For 18 example, a court has found that a plaintiff made a showing of irreparable harm where the 19 defendants intended to foreclose upon his primary residence, his father was severely ill and 20 resided with him, and where foreclosure would eliminate his right to rescind the loan 21 transaction. See Nichols v. Deutsche Bank Nat. Trust Co., 2007 WL 4181111 at *2 (S.D. Cal. 22 Nov. 7, 2007) (citing Sundance Land Corp. v. Comty First Fed. Sav. & Loan Ass’n, 840 F.2d 23 653, 661 (9th Cir. 1988)). In contrast, other courts have concluded that a plaintiff could not 24 show irreparable harm where the “record suggests that [the plaintiff] sought a loan beyond her 25 financial means and expectation of job loss,” Alcaraz v. Wachovia Mortgage FSB, 2009 WL 26 30297 at *4 (E.D. Cal. Jan. 6, 2009), or where a plaintiff has not taken the opportunity to 27 28 Plaintiffs also allege that their tenants would be forced to vacate the premises, although they offer no factual support for those allegations. (Id. ¶ 78.) 2 4 1 mitigate the risk of foreclosure by accepting remedies offered by the lender. See Parker v. U.S. 2 Dep’t of Agriculture, 879 F.2d 1362, 1367-68 (6th Cir. 1989). For the Northern District of California United States District Court 3 In this case, the Property is not Plaintiffs’ primary residence. Indeed, according to the 4 record it is one of several rental properties that Plaintiffs own. (See Aurora’s Request for 5 Judicial Notice, Exs. 3, 4.) Thus, although the Property may be unique, Plaintiffs are not in 6 jeopardy of being evicted from their home. Moreover, the Bankruptcy Court provided Plaintiffs 7 with an opportunity to prevent foreclosure and to maintain the automatic stay. Plaintiffs, 8 however, “refused” the relief offered because of their belief that Aurora is not the true owner of 9 the note. (Compl. ¶ 36.) A temporary restraining order is not only an extraordinary remedy, it 10 is an equitable one. Under the facts of this case, the Court concludes that Plaintiffs have not 11 met their burden of demonstrating that they will suffer irreparable harm if the Trustee sale goes 12 forward. 13 14 15 Accordingly, for the foregoing reasons, Plaintiff’s request for a Temporary Restraining Order is DENIED. IT IS SO ORDERED. 16 17 Dated: March 16, 2010 JEFFREY S. WHITE UNITED STATES DISTRICT JUDGE 18 19 20 21 22 23 24 25 26 27 28 5 1 UNITED STATES DISTRICT COURT 2 FOR THE 3 NORTHERN DISTRICT OF CALIFORNIA 4 5 FERMIN SOLIS ANIEL et al, Case Number: CV10-01042 JSW 6 Plaintiff, CERTIFICATE OF SERVICE 7 v. 8 AURORA LOAN SERVICES LLC et al, 9 Defendant. 11 For the Northern District of California United States District Court 10 12 13 14 / I, the undersigned, hereby certify that I am an employee in the Office of the Clerk, U.S. District Court, Northern District of California. That on March 16, 2010, I SERVED a true and correct copy(ies) of the attached, by placing said copy(ies) in a postage paid envelope addressed to the person(s) hereinafter listed, by depositing said envelope in the U.S. Mail, or by placing said copy(ies) into an inter-office delivery receptacle located in the Clerk's office. 15 16 17 18 19 20 Erlinda Abibas Aniel 75 Tobin Clark Drive Hillsborough, CA 94010 Fermin Solis Aniel 75 Tobin Clark Drive Hillsborough, CA 94010 21 22 23 24 25 26 27 28 Dated: March 16, 2010 Richard W. Wieking, Clerk By: Jennifer Ottolini, Deputy Clerk
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