Judge Ronald F. Frank, Case Number: 23TRCV03921, Date: 2023-12-05 Tentative Ruling

Judge: Ronald F. Frank, Case: 23TRCV03921, Date: 2023-12-05 Tentative Ruling

Case Number: 23TRCV03921 Hearing Date: December 5, 2023 Dept: 8

Tentative Ruling

HEARING DATE: December 5, 2023¿

CASE NUMBER: 23TRCV03921

CASE NAME: Joseph Kenyon v. Select Portfolio Servicing, Inc., et al.

MOVING PARTY: Plaintiff, Joseph Kenyon

RESPONDING PARTY: None.

TRIAL DATE: None set.

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MOTION:¿ (1) Ex Parte Motion for TRO and OSC for Preliminary Injunction

Tentative Rulings: (1) TRO GRANTED, with hearing to be set for December 19, 2023, but the Court needs to hear from the moving party as to certain matters specified below, including the amount of the bond which appears to be insufficient given Defendants’ likely costs if the TRO were granted. The Court also needs to hear from the moving party as to Plaintiff’s ability to make a bid if the foreclosure sale were not enjoined, and notice of this application to other parties besides the Defendants given the breadth of persons sought to be enjoined

I. BACKGROUND¿

A. Factual¿

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On November 27, 2023, Plaintiff, Joseph Kenyon (“Plaintiff”) filed a Complaint against Defendants, Select Portfolio Servicing, Inc., Federal Home Loan Mortgage Corporation, as trustee for the benefit of the Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2019-4 and DOES 1 through 10. The Complaint alleges causes of action for: (1) Violation of Civil Code § 2923.5; (2) Violation of Civil Code § 2924(a)(1); (3) Violation of Civil Code §2923.6(c); (4) Violation of Civil Code §2923.7; (5) Violation of Civil Code §2924.9; (6) Violation of Civil Code §2924.10; (7) Wrongful Foreclosure; (8) Unfair Business Practices, Violation of Business & Professions Code § 17200, et seq.; and (9) Cancellation of Written Instruments, Civil Code § 3412.

Additionally, Plaintiff now moves ex parte for a Temporary Restraining Order and OSC for Preliminary Injunction.

B. Procedural

On December 4, 2023, Plaintiff filed an ex parte Temporary Restraining Order and OSC for Preliminary Injunction.

¿II. ANALYSIS ¿

A. Legal Standard

A request for ex parte relief must be in writing and must include all of the following:

1. An application containing the case caption and stating the relief requested;

2. A declaration in support of the application making the factual showing required under rule 3.1202(c);

3. A declaration based on personal knowledge of the notice given under rule 3.1204;

4. A memorandum; and

5. A proposed order." (Cal. Rules of Court, Rule 3.1201.)

Pursuant to California Rules of Court, Rule 3.1202(c), "An applicant must make an affirmative factual showing in a declaration containing competent testimony based on personal knowledge of irreparable harm, immediate danger, or any other statutory basis for granting relief ex parte."

Pursuant to Code of Civil Procedure § 526(a)(2), an injunction may be issued when “appears by the complaint or affidavits that the commission or continuance of some act during the litigation would produce waste, or great or irreparable injury, to a party to the action.” When deciding to issue a¿TRO or preliminary injunction, a trial court must evaluate two factors: (1) the likelihood that plaintiff will prevail on the merits; and (2) the interim harm that plaintiff is likely to sustain if the injunction were denied, as compared to the harm that defendant is likely to suffer if the preliminary injunction were issued.¿(Code Civ. Proc.¿§ 526, subd. (a).)¿As a TRO is an extraordinary remedy, Plaintiff must also show “great or irreparable injury.” (Code Civ. Proc., § 527.)¿A Temporary Restraining Order may issue on an ex parte basis when “[i]t appears from facts shown by affidavit or by the verified complaint that great or irreparable injury will result to the applicant before the matter can be heard on notice”; and when the applicant certifies that “within a reasonable time prior to the application the applicant informed the opposing party or the opposing party’s attorney at what time and where the application would be made.”

B. Discussion

Plaintiff has petitioned this Court to enjoin Defendants, Select Portfolio Servicing, Inc. and Federal Home Loan Mortgage Corporation, as Trustees for the Benefit of the Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2019-4 and DOES 1 through 10, enjoining all Defendants, their agents, employees, representatives, attorneys, and all persons acting in concert or participating with them from foreclosing upon the real property located at 4325 W 182nd St. No, 18, Torrance, CA 90504, and allegedly forcing him into homelessness and despondency.

Likelihood of Success on the Merits

As a preliminary matter, Amanda Ruiz, a representative of the Consumer Defense Law Group, and an agent for Plaintiff Kenyon, states she gave notice to Defendants on December 1, 2023.

Here, Plaintiff argues that he can meet his burden for preliminary injunction because he has amply demonstrated that he was engaged in a loan modification negotiation, that he provided all documents requested of him in a diligent and timely fashion, and that defendants’ efforts appear to have been carefully and deliberately calculated to lull plaintiff into “placid stupor” while it simultaneously foreclosed on Plaintiff.

Plaintiff notes in his declaration that he experienced financial hardship since early 2022, and consequently incurred a material change in his financial circumstances. (Declaration of Joseph Kenyon (“Kenyon Decl.”), ¶ 3.) Because of this, he applied for a loan modification with defendants Select Portfolio Servicing, Inc. and federal Home Loan Mortgage Corporation, as Trustee for the Benefit of the Freddie Mac Seasoned Credit Risk Transfer, Series 2019-4. (Kenyon Decl., ¶ 3.) However, Plaintiff notes that Non-Profit, Alliance of Consumer Advocates, was acting on his behalf as agent to provide documents and conversations to Defendants. (Kenyon Decl., ¶ 4.) Plaintiff asserts that he had not received a letter appointing a single point of contract, nor any five day acknowledgement of his loan modification application, and made no request for missing or additional document. (Kenyon Decl., ¶ 4.) He also notes that he has not received the QWR or Debt Validation to date. (Kenyon Decl., ¶ 5.) Plaintiff does note, however, that with the assistance of a nonprofit agent, he applied for a loan modification review on or about April 29, 2023, because of the material changes in his financial circumstances, and gave the non-profit the right to act on his behalf with the submission of a loss mitigation packet to Defendants. (Kenyon Decl., ¶ 6.)

After this, Plaintiff contends that he did not receive any communications from the Defendants regarding a final decision on his modification application, and had not been assigned a point of contact. (Kenyon Decl., ¶ 7.) To date, Plaintiff argues that there is no determination on his loan modification application while Defendants are planning on foreclosing upon the property. (Kenyon Decl., ¶ 8.) The Kenyon Declaration asserts that while Defendants denied his loan modification application, he has never received written notification of the denial of his appeal of that denial. The supporting Memorandum of Points and Authorities indicates legislative intent to facilitate loan modification applications from affected home owners and it identifies a series of claimed violations of the Civil Code that, if proven, would tend to show a wrongful foreclosure. Based on the declaration, as well as the allegations in the Complaint, if proven true, the looming foreclosure sale would likely be invalid and he will likely be able to prevail on his claims.

Plaintiff’s Harm if the TRO is Denied

Here, the Court notes that the sale of the property is currently scheduled for tomorrow, December 6, 2023. Plaintiff asserts that his family will endure extreme and undue hardship if Defendants are not enjoined from foreclosing upon the Subject Property. (Kenyon Decl., ¶9.) Moreover, the status quo will be favored by the granting of this TRO, whereby the Property will not undergo a forced sale pending the conclusion of the proceeding in this action. Furthermore, the Court finds that the potential injury to Plaintiff would be great and irreparable if this motion is not granted and far outweighs any potential injury to Defendants from delay of the trustee’s sale.

Issues to be Discussed by Moving Party Plaintiffs at the TRO Hearing

At the hearing on this ex parte application, the Court will need to hear from the moving party as to whether Plaintiff has the financial ability to make a bid for the property if the TRO were denied and the Trustee’s sale were to proceed on December 6, 2023. The Court also needs to hear from Plaintiff as to notice to the other persons besides Defendants as to who Plaintiff seeks to have enjoined from moving forward with the Trustee sale, given the breadth of persons as to whom injunctive relief is being sought. Further, the moving papers seek to post only a $1,000 bond pending the hearing on the preliminary injunction, but with insufficient information as to Plaintiffs’ ability to pay or post a more robust bond given the Defendants’ likely costs to be incurred if the TRO were granted.

III. CONCLUSION

Plaintiff’s ex parte motion for TRO is GRANTED, but the Court tentatively would require a substantially greater bond to be posted than $1,000. The Preliminary Injunction hearing will be held on December 19, 2023.

Plaintiff is ordered to give emailed notice to Defendants of this ruling.