United States District Court, Eastern District of California
MICHAEL J. SHELBY and GLENDA M. SHELBY, Plaintiffs,
OCWEN LOAN SERVICING, LLC, a limited liability company, et al., Defendant.
ORDER GRANTING PLAINTIFF'S APPLICATION FOR TRO
TROY L. NUNLEY UNITED STATE JUDGE
This matter is before the Court on Plaintiffs Michael J. Shelby and Glenda M. Shelby's ("Plaintiffs") Application for Temporary Restraining Order (ECF No. 5). The Court has carefully considered Plaintiffs' briefing as well as the submitted declarations. For the reasons set forth below, Plaintiffs application is hereby GRANTED.
I. Factual Background
Plaintiffs have been residing at their home together since 1991. (Compl, ECF No. 1 at ¶ 12.) Plaintiffs allege that they originally mortgaged the property in 1991 for $154, 000.00. (Compl, ECF No. 1 at ¶ 12.) Plaintiffs further state that they have made mortgage payments and that Defendants have not credited those mortgage payments towards their loan. (Michael Shelby Decl., ECF No. 7 at ¶ 5; Glenda Shelby Decl., ECF No. 8 at ¶ 5.) Specifically, Plaintiffs state that despite the fact they have been paying on their mortgage for 23 years, Defendants allege Plaintiffs owe $163, 453.17, which is more than the original amount of $154, 000.00. (Michael Shelby Decl., ECF No. 7 at ¶ 5; Glenda Shelby Decl., ECF No. 8 at ¶ 5.) Plaintiffs contend that they have requested an accounting of their payments, and that Defendants never provided an accurate accounting. (Michael Shelby Decl., ECF No. 7 at ¶ 6; Glenda Shelby Decl., ECF No. 8 at ¶ 5.) On or about February 19, 2002, Plaintiffs retained Certified Public Accountant John Cline to assist them in determining the amount owed on the property. (Michael Shelby Decl., ECF No. 7 at ¶ 6; Glenda Shelby Decl., ECF No. 8 at ¶ 6.) Plaintiffs aver that Mr. Cline reported to them that Defendants had provided inadequate and incomplete records of the activity on their mortgage account and that Defendant's allegations of nonpayment on the Note could not be supported. (Michael Shelby Decl., ECF No. 7 at ¶ 6; Glenda Shelby Decl., ECF No. 8 at ¶ 6.)
A trustee's sale was scheduled on the property for December 1, 2014. Plaintiffs contend that none of the default notices required by California Civ. Code § 2923.55 were ever provided by Defendants prior to scheduling this sale. (Michael Shelby Decl., ECF No. 7 at ¶¶ 5-9; Glenda Shelby Decl., ECF No. 8 at ¶ 4.) Plaintiffs filed a complaint in the Superior Court for San Joaquin County on November 26, 2014. (Compl, ECF No. 1 at 10.) On November 27, 2014, Plaintiffs applied for a TRO which was granted by the Honorable Roger Ross on December 1, 2014. On December 5, 2014, Defendants removed this action to federal court. (See ECF No. 1.) Thus, the superior court hearing to determine whether Plaintiffs' application for preliminary injunction was vacated due to the removal. Plaintiffs filed an application for temporary restraining order on December 18, 2014, requesting that this Court enjoin the sale scheduled for December 22, 2014. (ECF No. 5.)
II. Legal Standard
Plaintiff seeks a temporary restraining order. A temporary restraining order is an extraordinary and temporary "fix" that the court may issue without notice to the adverse party if, in an affidavit or verified complaint, the movant "clearly show[s] that immediate and irreparable injury, loss, or damage will result to the movant before the adverse party can be heard in opposition." Fed.R.Civ.P. 65(b)(1)(A). The purpose of a temporary restraining order is to preserve the status quo pending a fuller hearing. See Fed. R. Civ. P. 65. It is the practice of this district to construe a motion for temporary restraining order as a motion for preliminary injunction. Local Rule 231(a); see also Aiello v. One West Bank, No. 2:10-cv-0227-GEB-EFB, 2010 WL 406092 at *1 (E.D. Cal. Jan. 29, 2010) ("Temporary restraining orders are governed by the same standard applicable to preliminary injunctions.") (internal quotation and citations omitted).
Therefore, the party requesting injunctive relief must show 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." Winter v. Natural Res. Def. Council, 555 U.S. 7, 20 (2008). Although pro se pleadings are liberally construed, see Haines v. Kerner, 404 U.S. 519, 520-21 (1972), they are not immune from the Federal Rules of Civil Procedure. See Ghazali v. Moran, 46 F.3d 52, 53-54 (9th Cir. 1995). The propriety of a request for injunctive relief hinges on a significant threat of irreparable injury that must be imminent in nature. Caribbean Marine Serv. Co. v. Baldridge, 844 F.2d 668, 674 (9th Cir. 1988).
Alternatively, under the so-called sliding scale approach, as long as the plaintiff demonstrates the requisite likelihood of irreparable harm and can show that an injunction is in the public interest, a preliminary injunction may issue so long as serious questions going to the merits of the case are raised and the balance of hardships tips sharply in plaintiffs favor. Alliance for Wild Rockies v. Cottrell, 632 F.3d 1127, 1131-36 (9th Cir. 2011) (concluding that the "serious questions" version of the sliding scale test for preliminary injunctions remains viable after Winter).
Plaintiffs have provided sworn statements alleging that Defendants have not credited them for payments made on their mortgage and that that none of the default notices required by California Civ. Code § 2923.55 were provided to them. (Michael Shelby Decl., ECF No. 7 at ¶¶ 5-9; Glenda Shelby Deck, ECF No. 8 at ¶ 4.)
Here, the Court looks to the law at issue, California's Homeowners' Bill of Rights ("HBOR"), to determine whether the Plaintiff is likely to succeed on the merits. HBOR provides that:
(a) A mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent may not record a notice of default pursuant to ...