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Bernadette Irigoyen, Personally and On Behalf of All Similarly Situated v. First Guaranty Financial Corporation

July 6, 2011



This case stems from a deed of trust obtained by Plaintiff Bernadette Irigoyen ("Plaintiff"), through her mortgage broker Defendant Westchester Funding ("Westchester"), from Defendant First Guaranty Financial Corp. ("FGF").*fn1 The deed of trust is secured by real property located in Clovis, California. Irigoyen alleges violations of 18 U.S.C. § 1961 ("RICO"), California Business and Professions Code § 17200, California Civil Code § 2923.1, California Civil Code § 2923.5, common law unjust enrichment, and injunctive relief. Currently pending before the Court is Plaintiff's ex parte application for a temporary restraining order. For the reasons that follow, the Court will grant Irigoyen's motion and set a briefing schedule for a preliminary injunction.


From the verified complaint, Plaintiff contends Westchester offered to obtain refinancing in the sum of $464,000, to be secured by Plaintiff's family residence located on 2816 Keats Ave., Clovis, California ("the Property"). Westchester knew that the true value of the Property was about 60% of the amount to be refinanced. Despite knowing the true value, Westchester arranged the loan through FGF, with the $464,000 to be secured by a deed of trust. As part of a scheme, FGF agreed to provide kickbacks or other consideration to Westchester for the making of loans (to be secured by real estate) which both defendants know or have reason to know would be defaulted.

In September 2010, Plaintiff defaulted on the loan.

On December 1, 2010, Plaintiff hired a real estate forensic loan document firm to recommend options for Plaintiff in her efforts to keep her home and avoid foreclosure. On December 7, 2010, Defendant Aurora Loan Services, LLC acknowledged the request for loan documentation from the real estate firm, and complied with the request.

On January 19, 2011, Defendant Cal-Western Reconveyance Corp. ("Cal-Western"), without having been substituted in as trustee under the deed of trust, commenced foreclosure proceedings by recording a Notice of Default in the Fresno County Recorder's office. See Complaint Ex. C. The Notice of Default indicates that, pursuant to California Civil Code § 2923.5(b), the provisions of California Civil Code § 2923.5 did not apply. See id. Neither FGF nor anyone acting on its behalf contacted Plaintiff either personally or telephonically 30 days before recording the Notice of Default.

On February 3, 2011, FGF and Defendant Mortgage Electronic Registration Systems, Inc. mailed Plaintiff a non-recorded Substitution of Trustee, that substituted Cal-Western as the trustee under the Deed of Trust.

On April 20, 2011, Cal-Western recorded a Notice of Trustee Sale in the Fresno County Recorder's Office. The Trustee Sale was noticed for May 10, 2011, but was subsequently moved to July 11, 2011, at 9:00 a.m. at the Fresno County Courthouse breezeway.

Plaintiff filed this lawsuit on July 1, 2011. On July 5, 2011, Plaintiff filed this request for a temporary restraining order ("TRO"), as well as a motion for preliminary injunction. A certificate of service for the TRO and motion for preliminary injunction also was filed on July 5, 2011.

As part of the TRO request, Plaintiff submitted a declaration that indicates inter alia: (1) she contacted the real estate firm to conduct a forensic audit in order to find out if something had gone wrong in the financial process and/or to explore possible options to avoid foreclosure; (2) she has no information that the firm is a company which assists people who simply want to get extra time after they decide to leave their homes in order to extend the foreclosure process; (3) the Property is her residence and she has never had the intention of abandoning it or avoiding paying for it; and (4) before the notice of default was filed, none of the defendants contacted her for the purpose of exploring options to avoid foreclosure, rather, the only contact was constant and persistent demands for immediate payment. See Courts's Docket Doc. No. 8-1.


Under Rule 65(b), a court may issue an ex parte temporary restraining order only if: (1) it clearly appears . . . that immediate and irreparable injury, loss, or damage will result to the applicant before the adverse party or that party's attorney can be heard in opposition, and (2) the applicant's attorney certifies to the court in writing the efforts, if any, which have been made to give the notice and the reasons supporting the claim that notice should not be required. Fed. R. Civ. Pro. 65(b); Reno Air Racing Ass'n v. McCord, 452 F.3d 1126, 1130 (9th Cir. 2006). Rule 65(b)'s requirements are "stringent," and temporary restraining orders that are granted ex parte are to be "restricted to serving their underlying purpose of preserving the status quo and preventing irreparable harm just so long as is necessary to hold a hearing, and no longer." Granny Goose Foods, Inc. v. Brotherhood of Teamsters, 415 U.S. 423, 438-39 (1974); McCord, 452 F.3d at 1131.

The substantive standard for granting a temporary restraining order is the same as the standard for entering a preliminary injunction. Bronco Wine Co. v. U.S. Dep't of Treasury, 997 F.Supp. 1309, 1313 (E.D. Cal. 1996); Lockheed Missile & Space Co. v. Hughes Aircraft Co., 887 F.Supp. 1320, 1323 (N.D. Cal. 1995); see also Welker v. Cicerone, 174 F.Supp.2d 1055, 1062 (C.D. Cal. 2001). A plaintiff seeking a preliminary injunction must establish: (1) that he is likely to succeed on the merits, (2) that he is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in his favor, and (4) that an injunction is in the public interest. Winter v. Natural Res. Def. Council, Inc., 129 S.Ct. 365, 374 (2008); Park ...

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