IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA
August 29, 2011
VICTORIA P. MAGANA, AN INDIVIDUAL,
WELLS FARGO BANK, N.A.; LSI TITLE DIRECTING COMPANY, A CALIFORNIA
CORPORATION; AND NDEX WEST LLC, A DELAWARE LIMITED LIABILITY CORPORATION,
The opinion of the court was delivered by: Claudia Wilken United States District Judge
ORDER GRANTING PLAINTIFF‟S EX PARTE APPLICATION FOR A TEMPORARY RESTRAINING ORDER, DEFENDANTS TO SHOW CAUSE WHY A 9 PRELIMINARY INJUNCTION SHOULD NOT ENTER AND REFERRING CASE TO ALTERNATIVE DISPUTE RESOLUTION UNIT (Docket No. 12)
United States District Court For the Northern District of California
In this foreclosure-related action, Plaintiff Victoria P. Magana applies ex parte for a temporary restraining order. She 17 seeks to enjoin Defendants Wells Fargo Bank, N.A., and NDEx West 18 LLC from proceeding with a trustee‟s sale of property located at 19 1113 Remington Court in Sunnyvale, California, which she contends 20 is scheduled for September 1, 2011.*fn1 Plaintiff has filed a 21 declaration, stating that Defendants have not contacted her as 22 required by California Civil Code section 2923.5. 23
A temporary restraining order may be issued without providing 16 24 the opposing party an opportunity to be heard only if "specific 25 facts in an affidavit or a verified complaint clearly show that 26 immediate and irreparable injury, loss, or damage will result to 2 the movant before the adverse party can be heard in opposition."
Fed. R. Civ. P. 65(b)(1)(A). "The standard for issuance of a 4 temporary restraining order is the same as that for issuance of a 5 preliminary injunction." Burgess v. Forbes, 2009 WL 416843, at *2 6 (N.D. Cal.). To obtain a preliminary injunction, the moving party 7 must "establish that he is likely to succeed on the merits, that 8 he is likely to suffer irreparable harm in the absence of 9 preliminary relief, that the balance of equities tips in his 10 favor, and that an injunction is in the public interest." Winter 11 v. Natural Res. Def. Council, Inc., 129 S. Ct. 365, 374 (2008).
Alternatively, preliminary injunctive relief could be granted when 13 "the likelihood of success is such that serious questions going to 12 the merits were raised and the balance of hardships tips sharply 15 in plaintiff‟s favor," so long as the plaintiff demonstrates a 16 likelihood of irreparable harm and shows that the injunction is in 17 the public interest. Alliance for the Wild Rockies v. Cottrell, 18 632 F.3d 1127, 1131 (9th Cir. 2011) (citation and internal 19 quotation and editing marks omitted). In the Ninth Circuit, 20 courts employ a "sliding scale" approach, under which "a stronger 21 showing of one element may offset a weaker showing of another." 22 Id. For instance, "a stronger showing of irreparable harm to 23 plaintiff might offset a lesser showing of likelihood of success 24 on the merits." Id. 25
California Civil Code section 2923.5 "concerns the crucial 14 26 first step in the foreclosure process: The recording of a notice 27 of default as required by section 2924." Mabry v. Superior Court, 28 185 Cal. App. 4th 208, 221 (2010). Under section 2923.5, a lender may not file a notice of default until thirty days after it has 2 contacted "the borrower by phone or in person to "assess the 3 borrower‟s financial situation and explore options for the 4 borrower to avoid foreclosure.‟"*fn2 Id. (quoting Cal. Civ. Code 5 § 2923.5(a)(2)). "If section 2923.5 is not complied with, then 6 there is no valid notice of default, and without a valid notice of 7 default, a foreclosure sale cannot proceed." Id. at 223. The 8 remedy for a failure to comply with section 2923.5 is "to postpone 9 the sale until there has been compliance with" the statute. Id. 10
(citing Cal. Civ. Code § 2924g(c)(1)(A)). Plaintiff‟s declaration is sufficient to demonstrate she is likely to succeed on the merits of her claim under section 2923.5. 13
Further, because the Remington Court property is likely to be sold at the foreclosure sale, Plaintiff has demonstrated that she is 15 likely to suffer irreparable harm. The balance of equities tips 16 in Plaintiff‟s favor because, in the absence of preliminary 17 injunctive relief, she faces the sale of the Remington Court 18 property; in contrast, as explained above, preliminary injunctive 19 relief provided under section 2923.5 will only delay the 20 foreclosure sale to permit compliance with the statute. Finally, 21 the public interest favors vindicating the Legislature‟s intent 22 "to have individual borrowers and lenders "assess‟ and "explore‟ 23 alternatives to foreclosure." Mabry, 185 Cal. App. 4th at 223.
Accordingly, the Court GRANTS Plaintiff‟s ex parte 14 25 application for a temporary restraining order. (Docket No. 12.) 26
A temporary restraining order will be entered as a separate 2 document. 3 Defendants are ordered to show cause why a preliminary 4 injunction should not enter concerning Plaintiff‟s section 2923.5 5 claim. Defendants‟ response shall be due September 2, 2011. 6 Plaintiff‟s reply, if necessary, shall be due September 6, 2011. 7 A hearing on whether a preliminary injunction shall enter will be 8 held on September 8, 2011 at 2:00 p.m. 9
Pursuant to Civil L.R. 16-8 and ADR L.R. 2-3, the Court 10 refers this foreclosure-related action to the Alternative Dispute Resolution (ADR) Unit t o assess this case‟s suitability for 12 mediation or a settlement conference. Plaintiff, her counsel and 13 Defendants‟ counsel shall participate in a telephone conference, to be scheduled by the ADR Unit on a date before September 16, 15 2011.
Plaintiff, her counsel and Defendants‟ counsel shall be 17 prepared to discuss the following subjects: 18 (1) Identification and description of claims and alleged defects in loan documents. (2) Prospects for loan modification. (3) Prospects for settlement. (4) Any other matters that may be conducive to the just, efficient and economical determination of the action.
The parties need not submit written materials to the ADR Unit 25 for the telephone conference. 26
In preparation for the telephone conference, Plaintiff and 2 her counsel shall do the following: 3 (1) Review relevant loan documents and conduct a brief investigation of claims to determine whether the 4 claims in this action have merit. (2) If Plaintiff is seeking a loan modification to resolve all or some of her claims, she shall 5 prepare a current, accurate financial statement and gather all of the information and documents 6 customarily needed to support a loan modification request. Further, Plaintiff shall immediately 7 notify Defendants‟ counsel of her request for a loan modification.
(3) Provide counsel for Defendants with information necessary to evaluate the prospects for loan modification. The general and financial information provided to Defendants may be in the 12 form of a financial statement, worksheet or application customarily used by financial institutions.
In preparation for the telephone conference, counsel for Defendants shall do the following. 16
(1) If Defendants are unable or unwilling to do a loan modification after receiving notice of Plaintiff‟s 15 request, counsel for Defendants shall promptly notify Plaintiff and her counsel to that effect.
(2) Arrange for a representative of each Defendant with full settlement authority to participate in the telephone conference.
The ADR Unit will provide the parties with additional 22 information regarding the telephone conference, including the date 23 it will be held. After the telephone conference has been held, 24 the ADR Unit will advise the Court of its recommendation for 25 further ADR proceedings. 26
IT IS SO ORDERED.