ORDER ON PLAINTIFF'S MOTION FOR TEMPORARY RESTRAINING ORDER (Doc. Nos. 2,3)
This case stems from a mortgage obtained by Plaintiffs Dean Knopp and Shaun Knopp (collectively "Knopp") for real property located in Moccasin, California. Knopp obtained the mortgage from Washington Mutual. Defendants are attempting to foreclose on the real property. In response, Knopp has filed this action and is proceeding pro se. Knopp alleges violations of the 12 U.S.C. § 226, 12 U.S.C. § 2605, 12 U.S.C. § 1821, fraud, UCC Art. 3, quiet title, declaratory and injunctive relief, intentional and negligent infliction of emotional distress, and California Business & Professions Code § 17200. Currently pending before the Court is Knopp's ex parte application for a temporary restraining order. For the reasons that follow, the Court will grant Knopp's motion and set a briefing schedule for a preliminary injunction.
ALLEGATIONS & BACKGROUND From the verified complaint, Knopp obtained a construction/roll over loan from Washington Mutual Bank on July 26, 2006, for real property located at 14600 Moccasin Ranch Road, Moccasin, California 95347 ("the Property"). A Deed of Trust was issued that identified Washington Mutual as the lender and beneficiary, California Reconveyance Company as the Trustee, and Plaintiffs (along with Peggy Knopp) as the borrowers.
Plaintiffs are informed and believe that, between August 1, 2006, and August 30, 2006, Washington Mutual transferred the Knopp's note to Washington Mutual Mortgage Securities Corporation. The note was then sold to an investment trust and became part of, or was subject to, a Loan Pool, a Pooling and Servicing Agreement, a Collateralized Debt Obligation, a Mortgage-Backed Security, a Mortgage Pass-Through Certificate, a Credit Default Swap, an Investment Trust, and/or a Special Purpose Vehicle. The security is identified with a Standard & Poors CUSIP number and Pool Number. Thereafter, Washington Mutual acted solely as a servicer of the loan, and was neither the lender nor the beneficiary after August 30, 2006.
On September 25, 2008, the Office of Thrift Supervision closed Washington Mutual and appointed the Federal Deposit Insurance Corporation ("FDIC") as receiver. Defendant JP Morgan Chase ("Chase") purchased certain assets and liabilities of Washington Mutual from the FDIC pursuant to a Purchase and Assumption Agreement ("PAA").
Chase represented to Knopp that Washington Mutual was the previous servicer on the loan, and that Chase was the new servicer. Chase later represented that it was the beneficiary of the loan under the note and deed of trust. Chase claims that it is the note holder, lender, beneficiary, and servicer, but it has not recorded a claim of ownership. Chase asserts that it is the beneficiary of the deed of trust at issue because it acquired that interest through the PAA.
On March 15, 2009, a notice of default was executed by Defendant Quality Loan Service Corporation ("QLS") and recorded on March 19, 2009, in the Tuolumne County Recorder's Office. The notice of default represented that QLS was the agent of the beneficiary and the qualified trustee. A substitute of trustee was executed by Jodie Sobatta for Chase on March 25, 2009, and recorded on May 1, 2009, in the Tuolumne County Recorder's Office. The substitute represented that Chase was the beneficiary and that Chase now desired for QLS to be the new trustee.
A notice of trustee's sale was executed on June 6, 2009, and recorded on June 29, 2009, in the Tuolumne County Recorder's Office. The notice represented that the sale would be held by the duly appointed trustee and that QLS was attempting to collect a debt on behalf of the holder and owner of the note.
A new notice of trustee sale was recorded on August 16, 2012 in the Tuolumne County Recorder's Office. This notice also represented that the sale would be held by the duly appointed trustee and that QLS was attempting to collect a debt on behalf of the holder and owner of the note. The trustee sale is currently scheduled to take place on September 4, 2012, at 3:30 p.m.
From the declaration of Dean Knopp, Knopp received notice of the trustee sale on August 15, 2012. Knopp sent correspondences to defense counsel in an effort to postpone the sale. On August 27, 2012, Knopp contacted QLS's legal department and was told that QLS would not oppose an ex parte TRO. QLS also provided Knopp with a fax number in which to send the complaint. Also on August 27, 2012, Knopp contacted Chase's registered agent for service of process. Knopp told the agent that a lawsuit and application for a TRO would be filed on August 30, 2012. The agent responded that it would contact Chase, but that the agent does not accept faxes.
In one of the correspondences between Dean Knopp and Melissa Couts, who appears to be legal counsel for QLS, there is an indication that the real property has been the subject of state court litigation. In part, the e-mail correspondence reads: "There is no active litigation left for the parties to 'settle.' All of your claims have been dismissed, and the Court of Appeal upheld the dismissal." Knopp Dec. Ex. C (e-mail dated August 24, 2012 from Melissa Couts).
Under Federal Rule of Civil Procedure 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 ...