Judge: Christian R. Gullon, Case: 24PSCV00904, Date: 2024-05-24 Tentative Ruling

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Case Number: 24PSCV00904    Hearing Date: May 24, 2024    Dept: O

Tentative Ruling

Plaintiffs’ MOTION FOR A PRELIMINARY INJUNCTION is TBD, but likely granted subject to introduction of sufficient evidence.

Background

This case arises from a pending foreclosure proceeding. Plaintiff Elizabeth Fernandez alleges the following Defendant Alma Rosa Muñoz: In May 2022, Plaintiff purchased real property. She secured two loans: the first with E. Mortgage Capital Inc., for $539,750.00 and the second with Defendant for $120,000.00. Despite Plaintiff’s payment of all the entire loan, on February 1, 2024, Defendant served Plaintiff with a Declaration of Mortgage Servicer Pursuant to Civil Code § 2923.5(b) and a Notice of Default and Election to Sell Under Deed of Trust. 

On Mach 21, 2024, Plaintiff filed suit against Defendant asserting the following causes of action (COAs):

1.     Declaratory Relief

2.     Rescission

3.     Fraud

4.     Unjust Enrichment

On April 26, 2024, Plaintiff filed the instant motion to prevent the June 6, 2024 scheduled foreclosure.

On May 14, 2024, filed a Lis Pendens.

On May 15, 2024, Plaintiff filed a POS. According to the POS, Plaintiff’s attorney attempted to effectuate service. According to this declaration, the following attempts at service were made:

On May 3, 2024, Counsel made his first attempt; he rang the doorbell 5 times, but no one answered.

On May 6, 2024, Counsel made his second attempt at service. He spoke to Mr. Martin, who confirmed he resides at Defendant’s residence. Mr. Martin informed Counsel that Defendant was at work.

On May 13, 2024, Counsel made his third attempt (after 8 PM as Mr. Martin indicated Defendant returns home after work around 8 PM). Despite multiple lights on and despite multiple vehicles in the driveway, Mr. Martin again stated Defendant was not home. Mr. Martin threw the document package on the ground in front of the front door.[1]

On May 21, 2024, the court granted Plaintiff’s ex-parte For An Order Advancing Plaintiff’s Notice Of Motion And Motion For A Preliminary Injunction.

Discussion

Plaintiff seeks an injunction to prevent the sale of her home. While the court finds that Plaintiff has met both prongs to issue an injunction, the court, exercising its discretion (Thornton v. Carlson (1992) 4 Cal.App.4th 1249, 1255), determines that Plaintiff has not met her evidentiary burden.

The trial court considers two factors in determining whether to issue a preliminary injunction: (1) the likelihood the plaintiff will prevail on the merits of its case at trial, and (2) the interim harm the plaintiff is likely to sustain if the injunction is denied as compared to the harm the defendant is likely to suffer if the court grants a preliminary injunction. (Code Civ. Proc. § 526(a); Husain v. McDonald’s Corp. (2012) 205 Cal.App.4th 860, 866-67.)

1.     Prong #1: Merits

Here, Plaintiff has demonstrated the likelihood of prevailing on the merits because she paid back the entire loan.

According to Plaintiff’s declaration, the Promissory Note called for the payment of the principal sum of $120,000.00 plus interest at the rate of 10% per month, payable in instalments of $12,000, beginning on July 12, 2022, and continuing until November 12, 2022, at which point the remaining balance was due and payable. (¶6.) By September 20233, Plaintiff made the last payment for a total of $144,000.00. (¶31.) As for interest, it appears Plaintiff has paid $24,000 in usury interest. “‘When a loan is usurious, the creditor is entitled to repayment of the principal sum only. He is entitled to no interest whatsoever. [Citations.]’ [Citation.]” [Citation.] “The attempt to exact the usurious rate of interest renders the interest provisions of a note void. [Citations.]” [Citation.]” (Hardwick v. Wilcox¿(2017) 11 Cal.App.5th 975, 978–979, emphasis added.) Accordingly, Plaintiff need not pay interest on the loan.

Despite the full payment, however, Defendant has declared the total due amount on the loan to be $264,800.

Thus, as for the declaratory relief COA (which is the crux of the action), the court determines that Plaintiff has paid the Loan Note in full such that Plaintiff is not in default, which precludes the foreclosure.

2.     Prong #2: Harm

Here, as this involves real property, there is a clear showing irreparable injury for which there is no other adequate remedy because real property is unique.

Evidence

Notwithstanding the foregoing, Plaintiff has provided insufficient evidence. (See, e.g., ReadyLink Healthcare v. Cotton (2005) 126 Cal.App.4th 1006, 1016; Ancora-Citronelle Corp. v. Green (1974) 41 Cal.App.3d 146, 150 [Preliminary injunctive relief requires the use of competent evidence to create a sufficient factual showing on the grounds for relief.]; see also Weil & Brown, California Procedure Before Trial, 9:579, 9(ll)-21 (The Rutter Group 2007).)

Here, however, not only is the complaint not verified (thus, making it impermissible to rely upon the complaint for an evidentiary basis), Plaintiff merely provides a self-serving declaration that she made all the payments.

However, as the court is cognizant of the impending foreclosure sale, rather than deny the motion, the court requests Plaintiff to submit a supplemental declaration prior to the hearing with evidence of the payments (e.g., checks, receipts, etc).

Conclusion

Based on the foregoing, the motion is TBD, but likely granted subject to introduction of sufficient evidence.