Judge: Frank M. Tavelman, Case: 23BBCV01631, Date: 2023-10-06 Tentative Ruling

Case Number: 23BBCV01631    Hearing Date: October 6, 2023    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

MOTION FOR TEMPORARY RESTRAING ORDER/PRELIMINARY INJUNCTION

NOTE:

The Court is not requesting oral argument on this matter.  Pursuant to California Rules of Court, Rule 3.1308(a)(1) notice of intent to appear is required.  Unless the Court directs argument in the Tentative Ruling, no argument will be permitted unless a “party notifies all other parties and the court by 4:00 p.m. on the court day before the hearing of the party’s intention to appear and argue.  “The tentative ruling will become the ruling of the court if no notice of intent to appear is received.”  

Notice may be given either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412

ALLEGATIONS: 

Sevan and Lernik Torrosian (“Plaintiffs”) brings this action against Flagstar Bank, FSB (“Defendant”). Plaintiffs allege various violations of consumer statutes on behalf of Defendant in connection with the servicing of their home loan.

Plaintiffs now move for temporary restraining order and OSC: re preliminary injunction to prevent the Trustee Sale of their property. Plaintiffs’ ex parte application was filed July 24, 2023. The notice of sale under deed of trust was issued on October 31, 2022 and the most recent date of planned sale was July 27, 2023. Defendant opposes the motion.  

JUDICIAL NOTICE & EVIDENTIARY SANCTIONS

Defendant requests judicial notice of the following pursuant to Evidence Code § 452:

(1)   The Deed of Trust recorded May 16, 2018 in the official records of Los Angeles County as Instrument No. 20180480759.

(2)   The Corporation Assignment of Deed of Trust recorded June 18, 2020 in the official records of Los Angeles County as Instrument No. 20200669762.

(3)   The Notice of Default recorded June 30, 2022 in the official records of Los Angeles County as Instrument No. 20220682551.

(4)   The Notice of Trustee’s Sale recorded October 31, 2022 in the official records of Los Angeles County as Instrument No. 20221030728.

(5)   A copy of the docket for Case No. 2:23-bk-10984-WB filed February 22, 2023 in the United States Bankruptcy Court for the Central District of California.

The Court grants Defendant’s requests.

The Court sustains objections numbers 5, 6, 7, and 14 and overrules the remaining objections to the declaration of Sevan Torrosian.

ANALYSIS: 

I.                    LEGAL STANDARD 

The purpose of a preliminary injunction is to preserve the status quo pending final resolution upon a trial. (See Scaringe v. J.C.C. Enterprises, Inc. (1988) 205 Cal.App.3d 1536.) Relief requires the use of competent evidence to create a sufficient factual showing on the grounds for relief. (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.) The burden of proof is on the plaintiff as moving party. (O'Connell v. Superior Court (2006) 141 Cal.App.4th 1452, 1481.) A plaintiff seeking injunctive relief must show the absence of an adequate damages remedy at law. (C.C.P. § 526(4); Thayer Plymouth Center, Inc. v. Chrysler Motors (1967) 255 Cal.App.2d

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. (C.C.P. § 526(a); Husain v. McDonald's Corp. (2012) 205 Cal.App.4th 860, 866-67.) The moving party bears the burden of demonstrating both a likelihood of success on the merits and the occurrence of irreparable harm before a final judgment can be entered. (Savage v. Trammell Crow Co. (1990) 223 Cal.App.3d 1562, 1571.)

II.                 MERITS

Likelihood of Success on the Merits

Violation Of Civil Code § 2923.5 – 1^st COA

California Civil Code § 2923.55(b)(2) provides:

A mortgage servicer shall contact the borrower in person or by telephone in order to assess the borrower's financial situation and explore options for the borrower to avoid foreclosure. During the initial contact, the mortgage servicer shall advise the borrower that he or she has the right to request a subsequent meeting and, if requested, the mortgage servicer shall schedule the meeting to occur within 14 days. The assessment of the borrower's financial situation and discussion of options may occur during the first contact, or at the subsequent meeting scheduled for that purpose. In either case, the borrower shall be provided the toll-free telephone number made available by the United States Department of Housing and Urban Development (HUD) to find a HUD-certified housing counseling agency. Any meeting may occur telephonically.

Plaintiffs allege no one from Defendant contacted them by telephone or in person, as required by § 2923.55(b)(2). (Compl. ¶ 20, Torossian Decl. ¶7.) Plaintiffs also allege no one from Defendant assessed their finances or explored all non-foreclosure options other than Covid-19 related forbearance. (Id.)

In opposition, Defendant submits evidence that their offices attempted to contact Plaintiffs numerous times prior to entry of foreclosure. Defendant states that they initially sent Plaintiffs five letters soliciting loss mitigation in 2020 and thereafter Plaintiffs entered a forbearance plan. (Ellison Decl. ¶¶ 11-16, Exhs. D-H.) This forbearance plan began in April 2020 and lasted until September of 2020. (Id. ¶ 16, Exh I.) On September 16, 2020, Defendant extended the forbearance program to April 2021 and then further to July 1, 2021. (Id. ¶¶ 18,21 Exhs. K & L.)

Defendant thereafter sent three more loss mitigation letters. (Id. ¶¶ 21-23 Exhs. L-N.) On August 20, 2021, Plaintiffs requested another forbearance extension, but Defendant declined. (Id. ¶ 24.) Plaintiffs indicated at that time that they would file a modification application. (Id. ¶ 26.) Defendant thereafter contacted Plaintiffs several time by letter and telephone regarding loan modification. (Id. ¶¶ 29-29.) From September 28, 2021 to July 13, 2022, Defendant attempted to contact Plaintiffs with respect to loan modification options several dozen times. (Id. ¶¶ 30-50.)

On July 14, 2022, Defendant received a partial application for loss mitigation from Plaintiffs. (Id. ¶ 51.) Defendant then advised Plaintiffs several times via telephone of the documents which were missing from the application and that the application was under review. (Id. ¶¶ 53-55, 58.) Defendant attempted to contact Plaintiffs several times while the application was pending. (Id. ¶¶ 54, 56, 57.)

On August 12, 2022, Defendant sent Plaintiffs a letter advising them that their loss mitigation application was closed for lack of critical information. (Id. Exh. W.) Plaintiffs had been previously notified of this deadline in a letter dated July 19, 2022. (Id.)

From August 26, 2022 to October 14, 2023, the parties repeated the above. Plaintiffs sent another loss mitigation application and Defendant ultimately denied it for Plaintiffs failure to provide critical information. (Id. ¶¶ 61-71.) From October 31, 2022 to December 7, 2022, the process repeated. (Id. 72-83.) No further applications have been submitted. (Id. ¶ 92.)

The Court finds that Defendant has produced ample evidence of the numerous attempts to contact Plaintiffs with respect to their options to avoid foreclosure. Defendant contacted Plaintiffs numerous times by telephone as required by statute and spoke to them via telephone on several occasions. Plaintiffs thereafter submitted applications for loss mitigation which the parties communicated about several times. Based upon the evidence presented the Court finds it incredibly unlikely that Plaintiffs would succeed on this cause of action on the merits at trial.

Violation Of Civil Code § 2923.6(c)(1) – 2nd COA

California Civil Code 2923.6(c)(1) provides that a mortgage servicer may not record a notice of default without first making a written determination that the borrower is not eligible for a first lien loan modification and any appeal period has expired.

Plaintiffs allege Defendant failed to issue such a written determination before recording the notice of default. Plaintiffs also allege that, sometime between July of 2022 and January of 2023, they applied for “first lien relief”. (Compl. ¶ 58, Torossian Decl. ¶ 12.) Plaintiffs state they attempted to comply with Defendant’s subsequent requests for documents, but eventually “exhausted all efforts” to provide the documentation to them. (Torossian Decl. ¶ 13.) Plaintiffs state Defendant thereafter recorded a notice of Trustee’s Sale against the property on October 31, 2022. (Torossian Decl. ¶ 14.)

On December 7, 2022, Defendant issued Plaintiffs a letter stating they were ineligible for any form of loss mitigation option, including a repayment plan, forbearance plan, and loan modification. (Ellison Decl. ¶ 84, Exh. DD.)

Defendant has provided the very letter required of them by statute. Plaintiffs have submitted no evidence in contravention of this letter and Plaintiffs’ declaration does not even go so far as to claim that the letter was never received. Accordingly, the Court finds it highly unlikely Plaintiffs would succeed on this cause of action at trial.

Violation of Civil Code § 2923.7- 3^rd COA

Civil Code § 2922.7(a) provides, “When a borrower requests a foreclosure prevention alternative, the mortgage servicer shall promptly establish a single point of contact and provide to the borrower one or more direct means of communication with the single point of contact.”

Plaintiff alleges Defendant never established a point of contact or provided them with a direct line of communication. (Compl. ¶ 73.) Plaintiffs declaration is silent as to this allegation.

On or about July 18, 2022, Flagstar sent Plaintiffs a letter identifying Plaintiffs’ single point of contact (“SPOC”), Andrew Vidos, and providing contact information for Plaintiffs’ SPOC. (Ellison Decl. ¶ 52, Exh. T.) Defendant repeated this process each time Plaintiffs submitted a loss mitigation application. (Id. ¶¶ 64, 75.)

As before, Plaintiffs offer no evidence in rebuttal and the Court finds its unlikely they would succeed at trial.

Violation Of California Business & Professions Code § 17200 – 4^th COA

California Business and Professions Code § 17200 prevents the practice of “unfair competition” which the statute defines as “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.” “Unlawful” conduct under § 17200 is any practice forbidden by law whether civil or criminal, federal, state, or municipal, statutory, regulatory, or court made. (See Farmers Ins. Exchange v. Super. Ct. (1992) 2 Cal.4th 377, 383. A business practice is “unfair” when it violates the spirit or an established public policy of a law. (People v. Casa Blanca Convalescent Homes, Inc. (1984) 159 Cal.App.3d 509, 530.)

Plaintiffs allege Defendant’s refusal to grant them a loan modification constitutes an unfair business practice. (Compl. ¶ 86.) Plaintiffs allegation of unfair business practice is based entirely on the statutory violations in their previous causes of action. Plaintiffs have provided no evidence showing they are likely to prevail on any of their causes of action for statutory violation. As such, Plaintiffs’ cause of action which is premised on those alleged statutory violations is also unlikely to prevail.

Irreparable Harm

The balancing of harm between the parties “involves consideration of such things as the inadequacy of other remedies, the degree of irreparable harm, and the necessity of preserving the status quo.” (Husain, supra, 205 Cal.App.4th at 867.) Thus, a preliminary injunction may not issue without some showing of potential entitlement to such relief. (Doe v. Wilson (1997) 57 Cal.App.4th 296, 304 [“The trial court abuses its discretion in granting such a preliminary injunction when “there is no likelihood” that the movants will prevail on the merits of their claims for relief.”].)

Here, the Court has found that there is insufficient evidence presented at this hearing to support the likelihood that Plaintiffs would succeed on the merits at trial. Generally, the harm of selling real property is deemed irreparable by law. (See C.C.P. § 3387.) The law is clear that where no likelihood of success exists the Court must deny the preliminary injunction, even where the harm is irreparable

III.              CONCLUSION

The Court finds Plaintiffs have not met their burden to show likelihood of prevailing on the merits with respect to any cause of action. Accordingly, the motion for temporary restraining order and OSC: re preliminary injunction is DENIED.

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RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records. 

ORDER 

Sevan and Lernik Torrosian’s Motion for Temporary Restraining Order and OSC: re Preliminary Injunction came on regularly for hearing on October 6, 2023, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follow: 

THE MOTION IS DENIED.

UNLESS ALL PARTIES WAIVE NOTICE, DEFENDANT IS TO GIVE NOTICE.  

IT IS SO ORDERED. 

DATE: October 6, 2023                            _______________________________ 

                                                                        F.M. TAVELMAN, Judge 

Superior Court of California 

County of Los Angeles