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Racquel C. Benas and Benjie C. Benas v. Shea Mortgage Inc.; Ibm Lender Business Process Services

February 16, 2012

RACQUEL C. BENAS AND BENJIE C. BENAS,
PLAINTIFFS,
v.
SHEA MORTGAGE INC.; IBM LENDER BUSINESS PROCESS SERVICES, INC.; CHASE HOME FINANCE, LLC; AND DOES I - XX, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court

ORDER DENYING MOTION FOR ORDER TEMPORARY RESTRAINING

Presently before the Court is Plaintiffs Racquel C. Benas and Benjie C. Benas ("Plaintiffs")'s motion for a temporary restraining order ("TRO"). [Doc. No. 5.] For the reasons set forth below, the Court DENIES Plaintiffs' motion.

BACKGROUND

This is a mortgage case. Plaintiffs allege they purchased the subject property, located at 538 Trovita Court, Escondido, California, on March 13, 2008. [Doc. No. 37, FAC ¶¶ 1, 8.] To fund that purchase, Plaintiffs secured a loan for $417,000 from Defendant Shea Mortgage Inc. ("Shea"), secured by a Deed of Trust. [Id. ¶ 8.] On February 11, 2011, there was a notice of default on Plaintiffs' property, [id. ¶ 26], and on May 6, 2011, there was a notice of trustee's sale stating that the sale of Plaintiffs' property would take place on June 1, 2011. [Id. ¶ 33.]

On May 25, 2011, Plaintiffs filed the present action against Defendants Shea, IBM Lender Business Process Services, LLC ("Seterus/IBM"), and JP Morgan Chase Bank ("Chase") in San Diego Superior Court alleging eleven causes of action. [Doc. No. 1-2, Compl.] Plaintiffs also filed on May 25, 2011 a motion for a temporary restraining order staying the foreclosure proceedings, which was granted by the state court on May 26, 2011. [Doc. Nos. 1-3, 1-4.] On July 1, 2011, Defendants removed the action from state court to this Court on the basis of federal question jurisdiction under 28 U.S.C. § 1331 and supplemental jurisdiction under 28 U.S.C. § 1367(a). [Doc. No. 1, Notice of Removal.]

Shortly after removing the action, all three Defendants moved to dismiss the complaint. [Doc. Nos. 2, 4, 14.] On October 4, 2011, the Court dismissed the complaint and gave Plaintiffs leave to file a first amended complaint ("FAC"). [Doc. No. 24.] On December 23, 2011, Plaintiffs filed a first amended complaint alleging seven causes of action for: (1) violation of the Real Estate Settlement and Procedures Act ("RESPA"), 12 U.S.C. § 2605(a); (2) violation of RESPA, 12 U.S.C. § 2605(e); (3) breach of fiduciary duties under California Civil Code §§ 2923.1 and 2079.24 and California Business and Professions Code § 10176; (4) constructive fraud under California Civil Code § 1573; (5) fraudulent concealment under California Civil Code §§ 1709-1710; (6) negligent misrepresentation and concealment under California Civil Code §§ 1709-1710; and (7) violation of California Business and Professions Code § 17200. [FAC.] By the present motion, Plaintiffs seek a temporary restraining order enjoining Defendants from (1) foreclosing on the subject property; (2) offering or advertising the subject property for sale; (3) attempting to transfer title to the subject property; (4) offering to sell or selling title to the subject property; (5) holding any auction therefore; and (6) attempting to evict or in any way make Plaintiffs vacate the subject property. [Doc. No. 51, Pl.'s Mot. at 1-2.]

DISCUSSION

I. Legal Standard

The analysis on a motion for a temporary restraining order ("TRO") is substantially identical to that on a motion for a preliminary injunction. See Stuhlbarg Int'l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001). A preliminary injunction is "an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief."

Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 22 (2008). "A plaintiff seeking a preliminary injunction 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." Id. at 20. As long as all four Winter factors are addressed, an injunction may issue where there are "'serious questions going to the merits'" and "a balance of hardships that tips sharply towards the plaintiff." Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011).

The grant or denial of a preliminary injunction is reviewed for abuse of discretion. Am. Trucking Ass'ns, Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009). "[A] district court necessarily abuses its discretion when it bases its decision on an erroneous legal standard or on clearly erroneous findings of fact." Id. "Stated differently, [a]s long as the district court [gets] the law right, it will not be reversed simply because the appellate court would have arrived at a different result if it had applied the law to the facts of the case." Id. (internal quotation marks omitted).

II. Analysis

A. Likelihood of Success on the Merits

Plaintiffs argue that they are likely to succeed on the merits of their claims for breach of fiduciary duty, fraudulent concealment, and negligent ...


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