Judge: Michael Shultz, Case: 22CMCV00218, Date: 2022-08-19 Tentative Ruling
Case Number: 22CMCV00218 Hearing Date: August 19, 2022 Dept: A
8:30 a.m. Friday,
August 19, 2022
The complaint filed July 13, 2022,
alleges claims for wrongful foreclosure. Plaintiff obtained a loan from Countrywide
Home Loans for $391,200, secured by the real property at issue. Plaintiff
alleges that Defendants have noticed a sale for the property under the Deed of
Trust for his alleged default on the promissory note. The complaint alleges
Defendants violated statutory requirements for foreclosure on real property to
support cancellation of instruments.
On July 18, 2022, the court heard
and denied Plaintiff’s ex parte application as moot. According to Plaintiff, the trustee sale
occurred prior the ex parte application was heard. Plaintiff, however, argued that the court had
the authority to issue a TRO precluding Defendant from recording the sale and
transfer of title. On August 3, 2022, Plaintiff filed a reply brief. Plaintiff’s reply brief did not contain any
legal authority supporting this assertion.
Moreover, Plaintiff’s reply brief suggested that the court granted Plaintiff’s
prayer for ex parte relief.
The court set this hearing for a
temporary restraining order (“TRO”) and for temporary relief.
II.
ARGUMENTS
A.
Motion filed July 15, 2022
Plaintiff applies for an order to
enjoin Defendant’s foreclosure of the real property at issue, citing
Defendants’ alleged violations of the statutory procedures required to commence
and proceed with a foreclosure sale pursuant to Civil Code § 2923, et seq. Plaintiff’s
declaration attests that any sale be enjoined as he is in the process of
negotiating a loan modification.
B. Opposition filed August 1, 2022
Defendant argues the property was sold at a trustee’s sale held on
July 18, 2022. The only issue is whether Defendant should be enjoined from
recording the Trustee’s Deed Upon Sale. Plaintiff did not provide any points
and authorities in support of his claims. Plaintiff cannot make an adequate
showing that it is reasonably probable that Plaintiff will prevail on the
merits. Defendant did not violate any of the statutes cited by Plaintiff in his
complaint.
If the court grants the TRO, the court should require Plaintiff to
post a bond. Plaintiff is not entitled to an award of attorney’s fees.
C. Reply filed August 3, 2022
Plaintiff argues that Defendant
breached its duty of care by continuing with the sale of the residence while
Plaintiff’s loan modification package was under review. Plaintiff submitted a
complete application package but burdened Plaintiff with a request for the same
documents. The Homeowner Bill of Rights (HBOR) requires Defendant to contact
Plaintiff to provide foreclosure alternatives before proceeding with
foreclosure. Rushmore failed to comply with these obligations.
III.
LEGAL STANDARDS
An injunction is appropriate in
cases where “it appears that an act during the litigation will produce waste,
or great or irreparable injury, to a party to the action;’ when a party
threatens to act in a manner which will “tend to render the judgment
ineffectual” or where “pecuniary compensation will not afford relief. Its purpose
is to preserve the status quo pending a decision on the merits. Major v. Miraverde Homeowners Ass’n. (1992) 7 Cal.App.4th 618, 623. A cause of action must exist
before injunctive relief may be granted. Id. If a complaint fails to state a cause of
action, an order granting a preliminary injunction must be reversed. Id.
In determining whether
to grant a preliminary injunction, the court looks to two factors, including
“(1) the likelihood that the plaintiff will prevail on the merits, and (2) the
relative balance of harms that is likely to result from the granting or denial
of interim injunctive relief.” White v. Davis (2003) 30
Cal.4th 528, 554. The factors are interrelated; “the greater the … showing on
one, the less must be shown on the other to support an injunction.” Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1420. Irreparable harm may exist if
the plaintiff can show that “pecuniary compensation would not afford adequate
relief.” Code Civ. Proc., § 526 subd. (a)(4).
IV.
DISCUSSION
The verified complaint alleges six
causes of action for various violations of the Civil Code governing
non-judicial foreclosures. Plaintiff has not met its initial burden of showing
a likelihood of prevailing on the merits. Plaintiff did not submit a memorandum
of points and authorities. The court can construe its absence as an admission
that the motion is not meritorious. CA ST CIVIL RULES Rule 3.1113(a). Nor has
Plaintiff submitted any declarations of evidentiary facts relevant to
Defendant’s alleged violations of the Civil Code. Plaintiff submits his own
declaration attesting to his financial hardship, his loan modification
application, and that he has not received any decision on his application.
Declaration of Manuel Cifuentes filed 7/15/22.
Defendant informs that the sale on
the real property at issue was completed on August 1, 2022. Declaration of
Suzanne Schornack, ¶ 4. Completion of the sale affects Plaintiff’s remedies for
violations of foreclosure statutes. For example, Plaintiff’s first cause of
action asserts violation of Civil Code section 2923.5, which generally requires contact
by the lender prior to recording a notice of default. Civ. Code, § 2923.5.
However, the statute does not provide a remedy once a foreclosure sale has
taken place. Davenport v. Litton Loan Servicing, LP (N.D. Cal. 2010) 725 F.Supp.2d 862, 877–878 [“under the plain
language of section 2923.5, read in conjunction with section 2924g, the only
remedy provided is a postponement of the sale before it happens. As the
Canterbury property was already sold at foreclosure, it does not appear that
any remedy remains under the provision. Accordingly, her section 2923.5 claim
is dismissed without leave to amend.”]. Davenport relied on Mabry v. Superior Court (2010) 185 Cal.App.4th 208, 214: “What
is the extent of a private right of action under section 2923.5? To repeat: The
right of action is limited to obtaining a postponement of an impending
foreclosure to permit the lender to comply with section 2923.5.” Mabry v.
Superior Court, (2010) 185 Cal. App. 4th 208, 214.
The second cause of action asserts
that Defendants lacked authority to foreclose on the property in violation of
Civil Code section 2924 subd. (a)(1). Plaintiff
does not provide any argument or evidence to support a likelihood of prevailing
on the merits of this claim.
The fourth cause of action alleges that Defendant failed to assign
a “single point of contact” relating to Plaintiff’s request for a loan
modification as required by Civil Code section 2923.7. Since the
sale has completed, Plaintiff’s only relief is monetary not injunctive. Shupe v.
Nationstar Mortgage LLC (E.D. Cal. 2017) 231 F.Supp.3d 597, 603 ["Monetary relief is
only available after a foreclosure sale has been recorded. Cal. Civ. Code §
2924.12(b). Injunctive relief is available prior to such a sale. Id. §
2924.12(a)."]. An injunction will issue only if there is inadequate
pecuniary relief. Code Civ. Proc., § 526 subd.
(a)(4). Monetary relief is Plaintiff’s only remedy. Regardless, Defendant’s evidence
reflects that Defendant did assign to Plaintiff a single point of contact with
respect to his loan modification application by name and telephone number.
Declaration of Suzanne Schornack, Ex. 1, .pdf page 7.
The fifth cause of action alleges that Defendant failed to provide
Plaintiff with foreclosure alternatives within five business days after
recording a notice of default. Civ.
Code, § 2924.9. Plaintiff’s declaration attests that Defendant
failed to acknowledge his loan modification application. Cifuentes declaration,
¶ 4, 9. There is no evidence to support this claim.
The sixth cause of action alleges that Defendant failed to provide
Plaintiff with written notice of receipt of his loan modification application
in violation of Civil Code section 2924.10. However,
Defendant sent Plaintiff a letter on June 30, 2022, acknowledging Defendant’s
“receipt of your home retention package concerning a loan modification or other
type of homeowner assistance.” Ex. 1, .pdf page 4. Schornack Declaration.
The seventh cause of action asserts that by engaging in the
previously alleged violations of the Civil Code, Defendant engaged in unlawful
and unfair business practices for which an injunction is warranted pursuant to Bus. &
Prof. Code section 17200 (“Unlawful Competition Law” or “UCL”). Under California law, an unlawful business
practice can be based on violations of other laws. The UCL treats them as
unlawful practices and makes them independently actionable. Cel-Tech
Communications, Inc. v. Los Angeles Celular Telephone, Co. (1999) 20
Cal.4th 163, 180. As Plaintiff has not shown a probability of
prevailing on the underlying claims, this claim is equally without basis.
The eighth cause of action seeks cancellation of the Notice of
Default and Notice of Trustee’s Sale, ostensibly because Defendant did not have
authority to record these documents because a substitution of trustee was never
filed as alleged in the second cause of action for violation of Civil Code
section 2924 subd. (a)(1). As previously alleged, Plaintiff has not shown a
reasonable probability of prevailing on that claim, leaving the eighth cause of
action without support.
V.
CONCLUSION
Based on the foregoing Plaintiff
has not met his initial burden of showing a probability of prevailing on the
merits. Accordingly, the motion is DENIED.