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Hester v. PHH Mortgage

July 23, 2010

KELLY HESTER AND ERIC HESTER, PLAINTIFFS,
v.
PHH MORTGAGE; REAL TIME RESOLUTIONS, INC.; NDEX WEST, LLC; AND DOES 1 THROUGH 100, INCLUSIVE DEFENDANTS.



The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge

ORDER DENYING PLAINTIFFS' EX PARTE APPLICATION FOR A TEMPORARY RESTRAINING ORDER

Plaintiffs filed an ex parte application for a temporary restraining order ("TRO") on July 21, 2010, in which they seek to enjoin Defendants "from engaging in or performing any act to deprive [them] of ownership or possession of the real property located at 225 La Loma Court, Roseville, CA . . ., [and] in particular, from proceeding with the foreclosure sale of the Property now scheduled for July, 27, 2010." (TRO Application 1:17-27.)

I. LEGAL STANDARD

"Temporary restraining orders are governed by the same standard applicable to preliminary injunctions." Pimentel v. Deutsche Bank Nat. Trust Co., 2009 WL 3398789,*1 (S.D. Cal. 2009); see also Stuhlbarg Intern. Sales Co., Inc. v. John D. Brushy and Co., Inc., 240 F.3d 832, 839 n.7 (9th Cir. 2001) (stating the standards for issuing a TRO are "substantially identical" to those for issuing a preliminary injunction). Therefore, "[a] plaintiff seeking a [TRO] must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest." Am. Trucking Ass'n, Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009) (quoting Winter v. Natural Res. Def. Council, Inc., --- U.S. ----, 129 S.Ct. 365, 374, (2008)). A TRO is "an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." Winter, 129 S.Ct. at 376.

II. BACKGROUND

Plaintiffs' complaint and TRO application do not contain factual allegations that clearly explain the events underlying Plaintiffs' claims.*fn1 Plaintiffs allege they "purchased the [Roseville property] and became the owners of legal title to the property using funds acquired through a loan from Defendants." (Compl. 4:1-2.*fn2

While Plaintiffs do not allege when they purchased the Roseville property, the Notice of Trustee's Sale that is attached to Plaintiffs' TRO application indicates that Plaintiffs executed a deed of trust securing their loan on May 5, 2005. Plaintiffs allege they "became 90 days late on the loan," but do not allege precisely when this default occurred. (Id. 4:9.) Plaintiffs' other allegations suggest they defaulted on their loan some time in 2009 since they allege: "prior to becoming late, Plaintiffs contacted Defendant PHH MORTGAGE CORPORATION, to discuss a short sale. Multiple offers were submitted to PHH in 2009. PHH continually refused to respond to requests for assistance from Plaintiffs and failed to approve the short sale. [PPH] refused to explain its position to Plaintiffs and why it refused [to] respond to Plaintiffs' numerous requests." (Id. 3:2-5, 4:9-13.) Plaintiffs further allege that "[e]ventually, on June 21, 2010, [Defendant] PHH did approve a short sale with a projected closing date of July 28, 2010. However, on July 10, 2010, Plaintiffs received a Notice of Trustee's Sale from [Defendant] NDEX West with a sale date of July 27, 2010." (Id. 4:15-17.)

III. DISCUSSION

A. Likelihood of Success on the Merits

Plaintiffs argue they are entitled to a TRO enjoining the trustee's sale because the notice of default and notice of trustee's sale were "defective" and Defendant PPH did not comply with California Civil Code section 2943(c)(2).

1. "Defective Notices" Claim

Plaintiffs argue the "time frames" provided by California Civil Code section 2924(a) ("section 2924(a)") were not complied with and the notice of trustee's sale was not properly served under California Civil Code section 2924f ("section 2924f").

"[T]he power of sale exercised by the trustee on behalf of the lender/creditor in non-judicial foreclosures is a right authorized solely by the contract between the lender and trustor as embodied in the deed of trust." Garfinkle v. Superior Court, 21 Cal. 3d 268, 277 (1978) (citations omitted). However, the California legislature has established "certain minimum standards for conducting non-judicial foreclosures . . . ." Id. at 278. California Civil Code sections 2924 through 2924k "provide a comprehensive [statutory] framework for the regulation of a non-judicial foreclosure pursuant to a power of sale contained in a deed of trust." Moeller v. Lien, 25 Cal. App. 4th 822, 830 (1994). The Moeller court described this statutory scheme as follows:

Upon default by the trustor, the beneficiary may declare a default and proceed with a non-judicial foreclosure sale. The foreclosure process is commenced by the recording of a notice of default and election to sell by the trustee. After the notice of default is recorded, the trustee must wait three calendar months before proceeding with the sale. After the 3-month period has elapsed, a notice of sale must be published, posted and mailed 20 days before the sale and recorded 14 days before the sale. The ...


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