Judge: Andrew E. Cooper, Case: 24CHCV01830, Date: 2024-09-26 Tentative Ruling

Case Number: 24CHCV01830    Hearing Date: September 26, 2024    Dept: F51

PRELIMINARY INJUNCTION

Application Filed: 7/10/24

MOVING PARTY: Plaintiffs Mark Gomez; and Juanita Gomez (collectively, “Plaintiffs”)

RESPONDING PARTY: Defendants PHH Mortgage Corporation; and Deutsche Bank National Trust Company, as Trustee for Morgan Stanley ABS Capital I Inc. Trust 2006-HE8 Mortgage Pass-Through Certificates, Series 2006-HE8 (collectively, “Bank Defendants”)

NOTICE: OK

RELIEF REQUESTED: A preliminary injunction restraining the foreclosure sale of the Subject Property.

TENTATIVE RULING: The request is denied.

BACKGROUND 

This is a wrongful foreclosure action wherein Plaintiffs own and reside at certain real property located at 27406 Onlee Avenue, Saugus, California (the “Subject Property”). (FAC ¶ 15.) Bank Defendants are the trustee, loan servicer, and beneficiary of Plaintiffs’ mortgage loan. (Id. at ¶ 12.) Plaintiffs allege that their home was at risk of foreclosure, therefore on 4/17/24, they contacted the individual and LLC defendants (collectively, “LLC Defendants”), who advertised that their company helps save properties from foreclosure. (Id. at ¶ 22.) At the LLC Defendants’ direction, on 4/22/24, Plaintiffs executed a Grant Deed transferring ownership of the Subject Property to the LLC Defendants, but the foreclosure proceedings were not remedied or otherwise postponed. (Id. at ¶¶ 24–35.)

On 5/10/24, Plaintiffs filed their complaint against the LLC defendants, alleging a sole cause of action for Fraud. On 7/10/24, Plaintiffs filed their first amended complaint (“FAC”) against eight named defendants, alleging the following causes of action: (1) Fraud – Intentional Misrepresentation; (2) Fraud – Concealment; (3) Quiet Title; (4) Cancellation of Written Instrument; and (5) Injunctive Relief.

On 7/10/24, Plaintiffs filed an ex parte application for a temporary restraining order restricting the Trustee’s Sale of the Subject Property, which the Court granted on 7/11/24. The Court also issued an Order to Show Cause regarding why a preliminary injunction should not be issued.

On 9/10/24, the Bank Defendants filed its opposition to the instant request for preliminary injunction, and the Bank Defendants’ request for judicial notice. On 9/19/24, Plaintiffs filed their reply.

ANALYSIS

In determining whether to issue a preliminary injunction, the Court considers two interrelated factors: (1) the likelihood that the plaintiff will prevail on the merits at trial and (2) the interim harm the plaintiff will likely suffer if the injunction does not issue as compared to the harm the defendant is likely to suffer if the injunction does issue. (White v. Davis (2003) 30 Cal.4th 528, 554; Smith v. Adventist Health System/West (2010) 182 Cal.App.4th 729, 749; Brown v. Pacifica Foundation, Inc. (2019) 34 Cal.App.5th 915, 925; Amgen Inc. v. Health Care Services (2020) 47 Cal.App.5th 716, 731.)

1.      Balancing of Equities

In deciding on the issuance of a preliminary injunction, the Court must balance the equities between the parties. If denying the requested relief would result in great harm to the plaintiff, and the defendant would suffer little harm if the relief is granted, it is an abuse of discretion to deny relief. (Robbins v. Superior Court (1985) 38 Cal.3d 199, 205; Butt v. State of California (1992) 4 Cal.4th 668, 678 (the greater the plaintiff’s showing on one factor, the less that must be shown on the other to support an injunction).)

Irreparable harm (i.e., inadequate legal remedy) is one of the traditional considerations for the issuance of a preliminary injunction. (Code Civ. Proc. § 526, subd. (a)(2).) The threat of irreparable harm must be imminent and not a mere possibility of harm sometime in the future. (Korean Philadelphia Presbyterian Church v. California Presbytery (2000) 77 Cal.App.4th 1069, 1084.) However, plaintiffs need not wait until they have suffered actual harm and may seek injunctive relief against threatened infringement of their rights. (Maria P. v. Riles (1987) 43 Cal.3d 1281, 1292; Costa Mesa City Employees’ Assn. v. City of Costa Mesa (2012) 209 Cal.App.4th 298, 305-306.)

Where a piece of real property is under threat of sale under a deed of trust, “such damage may be considered irreparable for in equity each parcel of real property is considered unique.” (Stockton v. Newman (1957) 148 Cal.App.2d 558, 564.) Here, Plaintiffs argue that they “will suffer irreparable harm if the Property is sold in the foreclosure sale. Mortgage Defendants’ actions in pursuing the trustee sale would tend to render any judgment against the LLC and related parties ineffectual. Additionally, should surplus funds be available following the sale, those funds would be payable to the LLC, which would effectuate an unjust enrichment for the LLC and reward the fraud conducted by the LLC and its related parties.” (Pls.’ Ex Parte App. 6:26–7:3.)

The Bank Defendants argue in opposition that “Plaintiffs have been in default on the loan since July 2019 and have had more than five years to cure the default but failed to do so. Indeed, Plaintiffs have been reviewed for home retention loss mitigation options several times but unfortunately do not qualify for any programs. Prior to this action, Plaintiffs filed multiple bankruptcy petitions to interfere with the trustee’s sale, and their execution of a grant deed to a third party does not, and should not, prevent the sale from proceeding.” (Defs.’ Opp. 2:8–13.) The Bank Defendants further argue that any injunctive relief is futile because Plaintiffs cannot cure their default under the loan. (Id. at 7:12–15.) “It is well settled that an injunction should not issue when the party seeking the injunction will not succeed on the merits, even though its issuance might prevent irreparable harm, because there is no justification in delaying that harm where, although irreparable, it is also inevitable.” (14859 Moorpark Homeowner's Ass'n v. VRT Corp. (1998) 63 Cal.App.4th 1396, 1408.)

The Court agrees, and notes that Plaintiffs do not dispute that the Bank Defendants are entitled to foreclose on the Subject Property, nor do they otherwise make any showing that they are able to tender the outstanding amount due under the loan. Based on the foregoing, the Court finds that in balancing the hardships between the parties, the potential harm to Plaintiffs does not outweigh the potential harm to the Bank Defendants should the injunction not be issued.

2.      Likelihood of Success on the Merits

A trial court may not issue an injunction, regardless of the amount of interim harm, “unless there is some possibility” that plaintiff will ultimately prevail on the merits of the claim. (Jamison v. Department of Transp. (2016) 4 Cal.App.5th 356, 362; Association of Orange County Deputy Sheriffs v. County of Orange (2013) 217 Cal.App.4th 29, 49.)

Here, as the Bank Defendants observe, “there is no relationship between the injury claimed (i.e. the foreclosure) and the wrongful conduct asserted in the FAC (the LLC’s recording of the grant deed).” (Defs.’ Opp. 5:13–15.) “Plaintiffs’ request for injunctive relief must be tied to an actionable claim against Lender Defendants and it is not. Instead, Plaintiffs are seeking to enjoin Lender Defendants from exercising their contractual rights because Plaintiffs executed a grant deed to a third party.” (Id. at 5:19–21.)

The Court agrees and finds that Plaintiffs allege no wrongdoing by the Bank Defendants in this action. The crux of Plaintiffs’ action alleges that the LLC Defendants defrauded Plaintiffs into transferring title to the Subject Property to the LLC Defendants. Any finding as to the merits of Plaintiffs’ claims are immaterial to the Bank Defendants’ right to foreclose on the Subject Property, which remains whether or not title is reverted from the LLC Defendants to Plaintiffs. (FAC ¶ 21; FAC p. 31, ll. 21–22.)

Based on the foregoing, the Court finds it immaterial to determine Plaintiffs’ likelihood of success on the merits of their claims, as there is no relationship between the conduct sought to be enjoined and any misconduct alleged in the FAC. Accordingly, the request for a preliminary injunction is denied.

CONCLUSION 

Plaintiffs’ request for a preliminary injunction is denied.