Bhandari et al v. Capital One, N.A. et al, No. 5:2012cv04533 - Document 36 (N.D. Cal. 2012)

Court Description: ORDER DENYING PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION re 6 Ex Parte MOTION for Temporary Restraining Order filed by Narpat Bhandari. Signed by Judge Paul S. Grewal on November 21, 2012. (psglc1, COURT STAFF) (Filed on 11/26/2012)
Download PDF
Bhandari et al v. Capital One, N.A. et al Doc. 36 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 United States District Court For the Northern District of California 8 SAN JOSE DIVISION 11 12 13 14 15 NARPAT BHANDARI AND CHANDRA BHANDARI, Plaintiffs, v. CAPITAL ONE, N.A., et al., Defendants. 16 ) ) ) ) ) ) ) ) ) ) Case No.: C 12-04533 PSG ORDER DENYING PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION (Re: Docket No. 6) 17 In this mortgage foreclosure action, Plaintiffs Narpat Bhandari and Chandra Bhandari 18 (collectively, “Plaintiffs”) seek to prevent foreclosure of their home and move for preliminary 19 injunction. Defendants Capital One, N.A. (“Capital One”), Chevy Chase Bank FSB (“CCB”), and 20 Mortgage Electronic Registration Systems, Inc. (collectively, “Defendants”) oppose the motion. On 21 October 16, 2012, the parties appeared for hearing. After considering the parties’ briefing and 22 arguments, the court is not persuaded that a preliminary injunction is warranted. For the reasons 23 discussed below, the motion for preliminary injunction is DENIED. 24 25 26 27 I. BACKGROUND A. Factual History In 1996, Plaintiffs obtained a loan from Bank of America on real property located at 14530 Deer Park Court, Los Gatos, California (the “Property”). Plaintiffs signed a Deed of Trust against 28 1 Case No.: C 12-04533 PSG ORDER Dockets.Justia.com 1 the Property to secure a Promissory Note in the amount of $1 million.1 Between December 27, 2 1997 and July 28, 2004, Plaintiffs refinanced their loan with six first mortgages and three second 3 mortgages. 2 4 On November 14, 2005, Plaintiffs refinanced their home loan and signed a Deed of Trust 5 against the Property to secure a Promissory Note in the amount of $4,570,200. 3 Plaintiffs also 6 signed a Subordination Agreement against the Property in the amount of $950,000. 4 7 In April 2008, CCB, Capital One’s predecessor-in-interest, granted Plaintiffs a loan 8 modification. 5 In July 2008, November 2008, and April 2009, Plaintiffs again sought loan 9 modifications but CCB denied all of their requests. 6 United States District Court For the Northern District of California 10 11 Plaintiffs failed to make the monthly minimum payments and as a result, a Notice of Default was recorded on June 3, 2009. 7 Plaintiffs owed CCB $134,315. 12 In 2009, Capital One acquired CCB. In July 2009, Plaintiffs requested a new loan 13 modification and were advised by Bill Callahan of Capital One that consideration of their request 14 would not occur until they stopped making monthly payments. 8 On September 12, 2009, Plaintiffs recorded a loan modification agreement. 9 The loan 15 16 modification occurred when the loan was set to become a fully amortizing one because the unpaid 17 principal balance had reached the maximum allowed. The new loan modification agreement 18 1 See Request for Judicial Notice (“Request”), ¶ 1, Exh. A. 19 2 See id., ¶ 2, Exh. B. 20 3 See id., ¶ 3, Exh. C. 21 4 See id., ¶ 4, Exh. D. 22 5 23 Declaration of Alissia Brunson-Matthews in Support of Defendants Capital One, Chevy Chase and MERs’ Opposition to Plaintiffs’ Request for Preliminary Injunction (“Brunson-Matthews Decl.”), ¶ 4. 24 6 See Brunson-Matthews Decl. ¶¶ 4-6. 25 7 See Request, ¶ 6, Exh. F. 26 8 27 Declaration of Narpat Bhandari in Support of Ex Parte Application for Temporary Restraining Order and Order to Show Cause re Preliminary Injunction (“Bhandari Decl.”), ¶ 5. 9 28 See Request, ¶ 5, Exh. E. 2 Case No.: C 12-04533 PSG ORDER 1 allowed for a new maximum – 115 percent of the original loan amount totaling $5,255,730. Under 2 the loan modification agreement, Plaintiffs agreed to make minimum monthly payments of 3 $16,749.65. 4 On July 8, 2009, a Substitution of Trustee was recorded, substituting TD Service 5 Company. 10 In November 2009, Capital One advised Plaintiffs that they did not qualify for a new 6 loan modification. 11 On December 9, 2009, a Notice of Trustee’s Sale was recorded. 12 Plaintiffs 7 owed Capital One $5,394,589. 13 A trustee’s sale of the Property was scheduled to be held on 8 December 29, 2009. 14 9 In December 2009, Plaintiffs paid Capital One $175,000 pursuant to a forbearance United States District Court For the Northern District of California 10 agreement. 15 At that time, Plaintiffs also tendered a document entitled, “RESPA, Qualified Written 11 Request (“QWR”), Complaint, Dispute of Debt and Validation of Debt Letter.” 16 On January 21, 12 2010, Capital One responded to Plaintiffs’ QWR. 17 13 In February 2010, Plaintiffs requested a new loan modification and provided Capital One 14 with all of the requested documents. 18 Narpat Bhandari spoke with Lubeena Khan of Capital One 15 who advised him that “you do not need to worry, you will be approved for modification.” 19 16 17 18 10 See Request, ¶ 7, Exh. G. 19 11 See Bhandari Decl., ¶ 7. 20 12 See Request, ¶ 8, Exh. H. 21 13 See id. 22 14 See Bhandari Decl., ¶ 7. 23 15 See id. at ¶ 8. 24 16 25 See Supplemental Declaration of Alissia Brunson-Matthews (“Brunson-Matthews Suppl. Decl.”), ¶ 10. 17 See id. 18 See Bhandari Decl., at ¶¶ 9-10. 19 See id. at ¶ 11. 26 27 28 3 Case No.: C 12-04533 PSG ORDER 1 On April 26, 2010, Capital One denied Plaintiffs’ request for a new loan modification 2 because they did not meet the requisite income criteria. 20 A trustee’s sale of the Property was 3 scheduled to be held on May 17, 2010. 21 4 To avoid foreclosure, Plaintiffs agreed to pay Capital One $93,000 before May 15, 2010 5 and to make monthly payments of $28,240.17 for fifteen months pursuant to another forbearance 6 agreement. 22 Plaintiffs believed that the forbearance agreement reflected an understanding that 7 Capital One would modify their loan and re-set the monthly payments. 23 Carl Locke of Capital One 8 confirmed to Plaintiffs that pursuant to the forbearance agreement Capital One would (1) modify 9 the loan and waive any default existing prior to the forbearance agreement; (2) reinstate the loan on United States District Court For the Northern District of California 10 its original terms; (3) remove the Notice of Sale on the Property; and (4) after August 2011, their 11 monthly payments would be $6,000 -7,000. 24 12 From May 2010 to August 2011, Jennifer Matthews, Tracey Thompson, and Karen 13 Gustavson from Capital One all provided assurances to Plaintiffs that after the term of the 14 forbearance agreement ended, the monthly payments of $12,667.34 would be reduced by half 15 based on a new interest rate of three percent. 25 16 In October 2010, Plaintiffs’ next request for a loan modification was denied on the grounds 17 that Plaintiffs’ liquid assets exceeded the maximum allowable amount under any modification 18 plan. 26 On October 22, 2010, a Rescission of Notice of Default was recorded. 27 19 20 20 See Brunson-Matthews Decl., ¶ 10, Exh. 3. 21 See Bhandari Decl., ¶ 14. 22 See id. 23 See Bhandari Decl., ¶ 14. 24 See id. 25 See id. at ¶ 15. 26 See Brunson-Matthews Decl., ¶ 11. 27 See Request, ¶ 9, Exh. I. 21 22 23 24 25 26 27 28 4 Case No.: C 12-04533 PSG ORDER 1 2 On November 22, 2010, Capital One sent Plaintiffs a letter explaining how the bank had calculated their mortgage payments and principal. 28 3 Following Plaintiffs’ next request for a loan modification in May 2011, Capital One denied 4 it because Plantiffs’ liquid assets exceeded the maximum allowable amount for any modification 5 plan. 29 Plaintiffs’ request for an exception was similarly denied. 30 In October 2011, Capital One offered Plaintiffs a new repayment plan. 31 Plaintiffs, 6 7 however, did not make any payments under it. 32 8 9 United States District Court For the Northern District of California 10 In December 2011, Capital One offered Plaintiffs a new repayment plan but Plaintiffs later advised Capital One they could not afford the proposed payments under the repayment plan; instead, they requested a new loan modification. 33 11 12 In March 2012, Plaintiffs requested a new loan modification and Capital One sent them a new package. 34 13 In April 2012, Plaintiffs advised Capital One that they wanted to proceed with a short sale 14 of the Property and sought to postpone a trustee’s sale. 35 Capital One advised Plaintiffs that the 15 trustee’s sale would not be postponed until a short sale offer had been made and accepted. 36 16 17 On May 11, 2012, an Assignment of the Deed of Trust and a Notice of Default was recorded. 37 18 28 See Brunson-Matthews Decl., ¶ 12, Exh. 4. 29 See Brunson-Matthews Decl., ¶ 13. 30 See id. 31 See Brunson-Matthews Suppl. Decl., ¶ 13. 32 See id. 33 See Brunson-Matthews Decl., ¶ 14. 34 See id. at ¶ 15. 35 See id. at ¶ 16. 36 See id. 37 See Request, ¶¶ 10-11, Exhs. J, K. 19 20 21 22 23 24 25 26 27 28 5 Case No.: C 12-04533 PSG ORDER 1 2 On July 2, 2012, Plaintiffs provided Capital One with a new loan modification package, including all requested documents. 38 On July 5, 2012, a Substitution of Trustee was recorded. 39 On August 7, 2012, The Notice 3 4 of Trustee’s Sale was recorded. 40 5 6 On July 27, 2012, Plaintiffs’ counsel, Mahesh Bajoria (“Bajoria”), requested on behalf of his clients a breakdown of monthly mortgage payments. 41 7 8 On August 29, 2012, Capital One denied Plaintiffs’ request for a new loan modification because their liquid assets exceeded the maximum allowable amount for any modification plan. 42 A trustee’s sale was scheduled to be held on September 4, 2012. 43 9 United States District Court For the Northern District of California 10 11 On September 20, 2012, Capital One denied Plaintiffs’ request for a new loan modification because their liquid assets exceeded the maximum allowable amount for any modification plan. 44 As of October 4, 2012, Plaintiffs owe $362,520.32 on their home loan. 45 12 13 B. Procedural History 14 Plaintiffs filed this action on August 24, 2012 in Santa Clara Superior Court. The complaint 15 alleges claims for: (1) Holder in Due Course; (2) Fraud; (3) Breach of Oral and Written Contracts; 16 (4) Civil Conspiracy; (5) RESPA; (6) violation of Equal Credit Opportunity Act; (7) Breach of the 17 Implied Warranty of Good Faith and Fair Dealing; (8) Rescission/Cancellation; (9) UCL; (10) 18 Breach of Fiduciary Duty; (11) Quiet Title; (12) Promissory Estoppel; (13) Declaratory or 19 38 See Brunson-Matthews Decl., ¶ 17. 20 39 See Request, ¶ 12, Exh. L. 21 40 See Request, ¶ 13, Exh. M. 22 41 23 See Declaration of Mahesh Bajoria in Support of Ex Parte Application for Temporary Restraining Order (“Bajoria Decl.”), ¶ 7. 42 24 See Brunson-Matthews Decl., ¶ 17, Exh. 5 (Capital One’s letter confirming denial of Plaintiffs’ request for a new loan modification dated August 31, 2012). 25 43 26 44 27 See Brunson-Matthews Decl., ¶ 18, Exh. 6 (Capital One’s letter confirming denial of Plaintiffs’ request for a new loan modification dated October 4, 2012). 45 28 See Bhandari Decl., ¶ 25. See Brunson-Matthews Decl., ¶ 19. 6 Case No.: C 12-04533 PSG ORDER 1 Injunctive Relief; and (14) Accounting. On August 29, 2012, Defendants removed the case to 2 federal court. 3 On August 31, 2012, Plaintiffs moved for, and the court granted, a temporary restraining 4 order. 46 On September 7, 2012, the parties stipulated to continue the hearing on Plaintiffs’ motion 5 for preliminary injunction explaining that they were exploring loan modification. 47 6 Notwithstanding those efforts, however, Defendants filed an opposition to Plaintiffs’ motion for 7 preliminary injunction. 48 On October 9, 2012, Plaintiffs filed their reply defending only the 8 following claims: (1) Promissory Estoppel; (2) Breach of the Covenant of Good Faith and Fair 9 Dealing; and (3) RESPA. 49 Based on Plaintiffs’ reply, the court assumes that Plaintiffs are no United States District Court For the Northern District of California 10 longer pursuing the balance of their claims. 11 II. LEGAL STANDARDS 12 The issuance of a preliminary injunction is committed to the discretion of the district 13 court. 50 A preliminary injunction is “an extraordinary remedy that may only be awarded upon a 14 clear showing that the plaintiff is entitled to such relief.” 51 “The proper legal standard for 15 preliminary injunctive relief requires a party to demonstrate (1) ‘that he is likely to succeed on the 16 merits, (2) that he is likely to suffer irreparable harm in the absence of preliminary relief, (3) that 17 the balance of equities tips in his favor, and (4) that an injunction is in the public interest.’” 52 18 Following Winter, the Ninth Circuit made clear that “to the extent [its] cases have suggested a 19 lesser standard, they are no longer controlling or even viable.” 53 20 46 See Docket No. 11. 47 See Docket No. 13. 48 See Docket No. 20. 49 See Docket No. 26. 50 See Indep. Living Ctr. of S. Cal., Inc. v. Maxwell-Jolly, 572 F.3d 644, 651 (9th Cir. 2009). 51 Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 22 (2008). 52 Stormans, Inc. v. Selecky, 586 F.3d 1109, 1127 (9th Cir. 2009 (citing Winter, 555 U.S. at 20). 53 Am. Trucking Ass’ns, Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009). 21 22 23 24 25 26 27 28 7 Case No.: C 12-04533 PSG ORDER 1 III. DISCUSSION 2 A. Request for Judicial Notice 3 4 Defendants request judicial notice of the following: foreclosure-related documents recorded in the Santa Clara County Recorder’s Office (Exhs. A-M). Plaintiffs do not object. 5 Defendants have not requested that the court take notice of disputed facts within the 6 documents, and the court will not rely on facts contained therein that reasonably may be subject to 7 dispute. 54 The authenticity of the foreclosure-related documents is not in dispute and may be 8 verified by resort to the public record. 55 Defendants’ request for judicial notice is GRANTED as to 9 all of those documents. United States District Court For the Northern District of California 10 B. Motion for Preliminary Injunction 11 1. Likelihood of Success on the Merits 12 a. Promissory Estoppel 13 Plaintiffs contend that the forbearance agreement evidences Capital One’s promise to them 14 to suspend further foreclosure proceedings as long as Plaintiffs complied with the terms of the 15 agreement and the agreement remained in effect. Plaintiffs also contend that on May 12, 2010, 16 Capital One confirmed to them that completion of the forbearance agreement would reinstate the 17 loan and that an adjustment of it would not be necessary during the effective term of the agreement. 18 Defendants also promised that Plaintiffs’ compliance with the agreement would be reported 19 favorably on their credit report. After the effective term of the forbearance agreement ended, 20 Defendants nevertheless proceeded with foreclosure proceedings against the Property. 21 22 Defendants first respond that Plaintiffs’ inability to tender full payment on the loan is fatal to their motion. Under well-established California law, debtors must make a valid and viable tender 23 24 25 54 26 27 See Lee v. City of Los Angeles, 250 F.3d 668, 689 (finding the district court erred in relying on disputed facts contained within documents that otherwise were the proper subject of judicial notice). See also Fed. R. Evid. 201(b). 55 28 See Fed. R. Evid. 201(b)(2). 8 Case No.: C 12-04533 PSG ORDER 1 of their full outstanding indebtedness. 56 By failing to make such a tender, Plaintiffs lack standing to 2 ask for relief in equity when they themselves have not acted equitably. 3 As for the promissory estoppel claim, Defendants argue that it fails for many reasons. Plaintiffs are unable to establish that Capital One made them a promise not to foreclose on the 5 Property. And even if they could establish such a promise was even made, the claim nevertheless 6 fails because under California law, the statute of frauds requires that any agreement for a purchaser 7 of real property to pay an indebtedness secured by a mortgage or deed of trust upon property must 8 be in writing. The forbearance agreement itself contradicts Plaintiffs’ claims because it plainly 9 states that: “This Agreement May Not Reinstate the Loan” and the agreement “shall not be 10 United States District Court For the Northern District of California 4 construed as a discontinuance of the foreclosure action by the Lender.” Any purported oral 11 representations by Capital One personnel to Plaintiffs are expressly contradicted by both the Deed 12 of Trust and the express language of the forbearance agreement. Defendants also point out that 13 Plaintiffs have not established that they changed their position in reliance on any of Capital One’s 14 purported representations. 15 The court agrees with Defendants but only in part. As for Defendants’ first argument that 16 Plaintiffs’ motion fails because they have not tendered the full amount of the loan, courts have 17 recognized various exceptions to the tender rule. 57 Under these circumstances, the court cannot find 18 error in Plaintiffs’ failure to allege compliance with the tender rule. 19 As for the claim of promissory estoppel, however, the court is not convinced that based on 20 this record that Plaintiffs have established that Capital One ever made them any clear and 21 unambiguous promise beyond the terms of the forbearance agreement. “[A] promise is an 22 56 23 24 25 26 27 28 See, e.g., Abdallah v. United Savings Bank, 43 Cal. App. 4th 1101, 1109 (1996); FPCI Re-Hab 01 v. E&G Invs., 207 Cal. App. 3d 1018, 1021 (1989); Gaffney v. Downey Sav. & Loan, 200 Cal. App. 3d 1154, 1165 (1994); Karlsen v. American Savings & Loan Ass’n, 15 Cal. App. 3d 112, 117 (1971); Gavina v. Smith, 25 Cal. 3d 501, 505-506 (1944); Sipe v. McKenna, 88 Cal. App. 2d 1001, 1006 (1948). 57 See Tamburri v. Suntrust Mortg., Inc., No. C-11-2899-EMC, 2011 WL 6294472, at *4-5 (N.D. Cal. Dec. 15, 2011) (finding multiple “exceptions and qualifications counsel against a blanket requirement of the tender rule at the pleading stage” based on a review of state and federal case law). See also Ogilvie, 2012 WL 3010986, at *6 (declining to apply the tender rule at the early pleading stage); ING Bank v. Ahn, No. C-09-995-THE, 2009 WL 20893965, at *2 (N.D. Cal. July 13, 2009 (same). 9 Case No.: C 12-04533 PSG ORDER 1 indispensable part of the doctrine of promissory estoppel. The cases are uniform in holding that this 2 doctrine cannot be invoked and must be held inapplicable in the absence of a showing that a 3 promise has been made upon which the complaining party relied to his prejudice.” 58 The promise 4 must be “clear and unambiguous in its terms.” 59 “To be enforceable, a promise need only be 5 definite enough that a court can determine the scope of the duty, and the limits of performance 6 must be sufficiently defined to provide a rational basis for the assessment of damages.” 60 “[A] 7 promise that is vague, general or of indeterminate application is not enforceable.” 61 The express 8 terms of the forbearance agreement are unambiguous in stating that the loan would not be 9 reinstated and that the agreement could not be construed as a discontinuance of the foreclosure United States District Court For the Northern District of California 10 action. While there is some ambiguity as to certain oral representations made by Capital One 11 representatives to Plaintiffs that arguably contradict the express terms of the forbearance 12 agreement, their promises are far from clear and unambiguous. The alleged statements by Capital 13 One personnel appear on their face to be speculative and evidence that someone, other than 14 themselves, was making the final decision regarding loan modification. In addition, unlike 15 plaintiffs in Garcia v. World Savings, FSB, 62 Plaintiffs here cannot establish any detrimental 16 reliance. Plaintiffs allege that from May 2010 to August 2011, Capital One representatives made 17 reassurances to Plaintiffs that their loan would be modified but in both October 2010 and May 18 2011, Capital One informed Plaintiffs, officially and repeatedly, that their loan would not be 19 modified because their liquid assets exceeded the maximum allowable under any modification 20 plan. The court therefore is not persuaded that Plaintiffs have established a likelihood of success on 21 the promissory estoppel claim. 22 23 24 58 Div. of Labor Law Enforcement v. Transpacific Transp. Co., 69 Cal. App. 3d 268, 277, 137 Cal. Rptr. 855 (1977). 59 Laks v. Coast Fed. Sav. & Loan Ass’n, 60 Cal. App.3d 885, 890, 131 Cal. Rptr. 836 (1976). 60 Garcia v. World Sav. FSB,183 Cal. App. 4th 1031, 1045, 107 Cal. Rptr. 3d 683 (2010). 25 26 61 27 Aguilar v. Int’l Longshoremen’s Union Local No. 10, 966 F. 2d 443, 446 (9th Cir. 1992) (internal citations omitted). 28 62 183 Cal. App. 4th at 1041-1043. 10 Case No.: C 12-04533 PSG ORDER 1 b. Breach of the Covenant of Good Faith and Fair Dealing 2 Plaintiffs contend that Defendants breached the covenant of good faith and fair dealing by 3 failing to modify Plaintiffs’ home loan despite their many promises to the contrary. At every turn, 4 Plaintiffs endeavored to comply with Defendants’ demands for information and documents. 5 6 Despite Plaintiffs’ repeated requests for an accounting, Defendants declined to respond and explain details related to fifteen monthly payments of $28,240.17, a down payment of $93,000, and 7 8 9 promises that their monthly payments would be reduced to $6,000-7,000 per month. Defendants respond that the operative agreement governing this claim is the Deed of Trust. United States District Court For the Northern District of California 10 Because Plaintiffs are in default, the Deed of Trust authorizes the commencement of non-judicial 11 foreclosure proceedings against them. 12 13 While the court is not persuaded that Plaintiffs have established a likelihood of success on this claim, Defendants’ contention that the claim relates to the Deed of Trust appears incorrect. 14 Plaintiffs allege that Defendants made numerous promises to them to modify the loan. More 15 16 problematic than anything else, however, is Plaintiffs’ failure to identify the operative agreement 17 from which their covenant of good faith and fair dealing claim arises. Based on Plaintiffs’ 18 declaration, it appears that the numerous promises that they reference include the oral agreements 19 made by Capital One representatives. Putting aside the fact that none of these oral representations 20 satisfy the statute of frauds under California law, the allegations as plead, do not establish a claim 21 for breach of the covenant of good faith and fair dealing. As a result, Plaintiffs have not established 22 a likelihood of success on this claim. 23 24 25 c. Violation of Real Estate Settlement Procedures Act (“RESPA”) Plaintiffs allege that Defendants violated RESPA when they failed to timely respond to 26 their QWR. Under RESPA, Defendants were obligated to acknowledge receipt of the request 27 within 20 days and to respond substantively to the request within 60 days. Defendants did neither. 28 11 Case No.: C 12-04533 PSG ORDER 1 2 As a result, Plaintiffs may have paid more than was actually owed and they have suffered negative consequences to their credit reports. Defendants respond that Plaintiffs’ RESPA claims, one against CCB and the other against 3 4 Capital One, both fail. With respect to their claim against CCB, whether Plaintiffs allege a RESPA 5 claim under 12 U.S.C. Section 2605(b) or (c) or 12 U.S.C. Sections 2607 or 2608, they are time- 6 barred. CCB’s loan to Plaintiffs originated in November 2005 and a RESPA claim under 12 U.S.C. 7 8 9 United States District Court For the Northern District of California 10 Section 2605(b) or (c) is subject to a three-year statute of limitations. To the extent that Plaintiffs allege a RESPA claim under 12 U.S.C. Sections 2607 or 2608, it is subject to a one-year statute of limitations. 11 12 13 With respect to Capital One, Plaintiffs allege that it failed to respond to the QWR dated June 23, 2009. 63 Defendants dispute that Plaintiffs have established that the QWR was ever sent or received. And even assuming that the QWR was sent, Defendants argue that it is not valid because 14 the request is unrelated to servicing or servicing errors of the loan. Defendants argue that Plaintiffs’ 15 16 request does not fall within the meaning of “servicing” because “servicing” relates to “receiving 17 any scheduled periodic payments from a borrower pursuant to the terms of any loan . . . and 18 making payments of principal and interest and such other payments with respect to the amounts 19 received from the borrower as may be required pursuant to the terms of the loan.” 64 Defendants 20 also dispute that the QWR is valid one because Plaintiffs did not state why they believed that the 21 22 account was in error, they did not provide sufficient detail to the servicer regarding other information sought by the borrower, and they did not allege actual damages. 65 23 24 25 63 See Docket No. 1 (Exhibit C to the complaint is an unsigned QWR dated November 10, 2009). 26 64 12 U.S.C. Section 2605(i)(3). 27 65 28 See, e.g., Phillips v. Bank of America Corp., No. C 10-0400 JF (HRL), 2010 WL 1460824, at *4 (N.D. Cal. Apr. 9, 2010). 12 Case No.: C 12-04533 PSG ORDER A request must meet certain criteria in order to constitute a QWR under 12 U.S.C. §2605 1 2 (e). A QWR requests information relating to the servicing of a loan. 66 It is something other than 3 notice on a payment coupon or other payment medium, supplied by the servicer. 67 It must provide 4 sufficient information for the servicer to identify the name and account of the borrower. 68 Finally, 5 it must either include a statement of the reasons for the borrower’s belief, to the extent applicable, 6 7 8 that the account is in error or provide sufficient detail to the servicer regarding other information sought by the borrower. 69 Under RESPA, loan servicers 9 15 ha[ve] a duty to respond to a borrower’s inquiry or ‘qualified written request.’ 12 U.S.C. § 2605(e). A qualified written request is a written correspondence that enables the servicer to identify the name and account of the borrower. 12 U.S.C. §2605(e)(1). It also either includes a statement describing why the borrower believes that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower. Id. The loan servicer is required to respond by making appropriate corrections to the borrower’s account, if necessary and, after conducting the investigation, providing the borrower with a written clarification or explanation. 12 U.S.C. §2605 (e)(2). 70 16 The court finds that Defendants’ arguments are ultimately persuasive. Plaintiffs’ RESPA United States District Court For the Northern District of California 10 11 12 13 14 17 claim against CCB appears to be time-barred. As for the claim against Capital One, Defendants do 18 not appear to dispute that they never responded to Plaintiffs’ purported June 23, 2009 QWR. While 19 the court is not persuaded by Defendants’ arguments that Plaintiffs’ QWR does not relate to 20 servicing or servicing errors, the court agrees that the QWR lacks specific reasons why Plaintiffs 21 believed that their account was in error and any actual damages. The QWR is a request by Century 22 21 Financial Services and addressed to Capital One/CCB seeking to audit, and have Capital One 23 66 12 U.S.C. §2605(e)(1)(A). 67 12 U.S.C. § 2605(e)(1)(B). 68 12 U.S.C. § 2605(e)(1)(B)(i). 69 12 U.S.C. § 2605(e)(1)(B)(ii). 70 Keen v. Amer. Home Mortgage Servicing, Inc., 664 F.Supp.2d 1086 (E.D. Cal. 2009). 24 25 26 27 28 13 Case No.: C 12-04533 PSG ORDER 1 audit, the accounting and servicing of the Bhandaris’ mortgage. The QWR merely states: “They are 2 disputing the validity of the current debt you claim that is owed.” 71 Plaintiffs do not indicate 3 whether subsequent correspondence was ever provided to Capital One specifying why the account 4 may have been error or the results of their own audit. Under these circumstances, Plaintiffs have 5 not established a likelihood of success on these claims. 6 Because Plaintiffs have not established a likelihood of success on any of their claims, this 7 factor weighs in favor of Defendants. 8 2. Irreparable Harm 9 Plaintiffs may suffer irreparable harm if Defendants commence foreclosure proceedings on United States District Court For the Northern District of California 10 the Property and they are forced to vacate their home. 72 Plaintiffs state that their down payment and 11 the value of any improvements they have made on their home will be lost. 12 This factor weighs in favor of Plaintiffs. 13 3. Balance of Equities 14 Based on the above, Plaintiffs cannot establish that the balance of equities tip in their favor. 15 Plaintiffs have not established the likelihood or prevailing on any of their claims. 73 This factor 16 weighs in favor of Defendants. 17 4. Injunction is in the Public Interest 18 Except for demonstrating that Plaintiffs will be irreparably harmed if an injunction is not 19 granted and they are forced to vacate from their home, Plaintiffs have not established that any of 20 the other factors weigh in their interest. Plaintiffs thus have not shown that granting an injunction 21 here is in the public interest. 74 This factor weighs in favor of Defendants. 22 71 23 See Docket No. 1, Ex. C. 72 24 25 26 27 See Mesde v. American Brokers Conduit, No. C 09-02418, 2011 WL 1883706, at *2 (N.D. Cal. Jun. 30, 2009) (“Foreclosure may constitute irreparable harm”). See also Sundance Land Corp. v. Comty First Fed. Sav. & Loan Ass’n, 840 F.2d 653, 661 (9th Cir. 1988) (holding that foreclosure of real property constitutes irreparable harm). 73 See, e.g., Beutel v. Wells Fargo Bank, N.A., No. 11-CV-4357-LHK, 2011 WL 5025118, at *6 (N.D. Cal. Oct. 20, 2011). 74 28 Cf. Paik v. Wells Fargo Bank, N.A., No. C 10-04016 WHA, 2011 WL 109482, at *5 (N.D. Cal. Jan. 13, 2011). 14 Case No.: C 12-04533 PSG ORDER 1 The threat of irreparable harm alone does not justify issuing a preliminary injunction. In 2 light of the absence of the likelihood of Plaintiffs’ success, the balance of equities in favor of 3 Defendants, and no real public interest in favor of an injunction, the court does not find that a 4 preliminary injunction is warranted. 75 5 IV. CONCLUSION 6 Plaintiffs’ motion for preliminary injunction is DENIED. 7 IT IS SO ORDERED. 8 Dated: 9 11/21/2012 _________________________________ PAUL S. GREWAL United States Magistrate Judge United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 75 27 28 See Winter, 555 U.S. at 22 (holding that “[i]ssuing a preliminary injunction based only on a possibility of irreparable harm is inconsistent with our characterization of injunctive relief as an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief”). 15 Case No.: C 12-04533 PSG ORDER