United States District Court, N.D. California
TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW
CAUSE
RICHARD SEEBORG, UNITED STATES DISTRICT JUDGE
Plaintiff
Nancy Tamondong seeks an order restraining defendants from
proceeding with a trustee’s sale of her primary
residence. The sale is presently set for July 7, 2016. A
request for a TRO is evaluated by the same factors that
generally apply to a preliminary injunction. See
Stuhlbarg Int’l. Sales Co. v. John D. Brushy &
Co., 240 F.3d 832, 839 n. 7 (9th Cir. 2001). Thus, as a
form of preliminary injunctive relief, a TRO is an
“extraordinary remedy” that is “never
granted as of right.” Winter v. Natural Res. Def.
Council, Inc., 555 U.S. 7, 24 (2008). To obtain
preliminary relief, a plaintiff 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
21-22. The Ninth Circuit has clarified, however, that courts
in this Circuit should still evaluate the likelihood of
success on a “sliding scale.” Alliance for
Wild Rockies v. Cottrell, 632 F.3d 1127, 1134 (9th Cir.
2011) (“[T]he ‘serious questions’ version
of the sliding scale test for preliminary injunctions remains
viable after the Supreme Court’s decision in
Winter.”). As quoted in Cottrell,
that test provides that, “[a] preliminary injunction is
appropriate when a plaintiff demonstrates . . . that serious
questions going to the merits were raised and the balance of
hardships tips sharply in the plaintiff’s favor,
” provided, of course, that “plaintiffs must also
satisfy the other [Winter] factors” including
the likelihood of irreparable harm. Id. at 1135.
Here,
Tamondong’s claims are brought under legal theories
that have ordinarily been rejected in the past. See,
Vasquez v. U.S. Bank, N.A., 2015 WL 5158538, at *3-6
(N.D. Cal. Sept. 2, 2015) (collecting cases). As
Vasquez explains, “[b]orrowers commonly attack
a lender’s standing to foreclose by challenging
irregularities in the securitization process” but
“[s]uch challenges are almost universally
dismissed.” Id. at *3. A major underpinning in
many of the decisions rejecting such claims, however, was a
conclusion that borrowers “lack standing to rely on
defects in the securitization process in order to challenge a
foreclosing entity’s authority to foreclose.”
Id. The continued viability of that conclusion,
however, has been called into question by the California
Supreme Court’s decision in Yvanova v. New Century
Mortgage Corp., 62 Cal.4th 919 (2016).
On its
face, the holding in Yvanova is limited to
post-foreclosure claims. There is at least an argument,
however, that its reasoning is equally applicable to
pre-foreclosure claims. See Lundy v. Selene Fin., LP,
No., 2016 WL 1059423, at *10 (N.D. Cal. Mar. 17, 2016)
(predicting that California Supreme Court will extend
Yvanova to the pre-foreclosure context).
Even
assuming claims challenging alleged securitization defects
may no longer be routinely rejected for lack of standing,
borrowers will not automatically be entitled to relief merely
be alleging that their loans were “securitized, ”
of course. Under all the circumstances here, though,
including the de minimis harm to defendants that
will arise from a brief postponement of the foreclosure sale,
there is adequate cause to grant a temporary restraining
order, without bond, and set a hearing on preliminary
injunction, to permit full briefing and due consideration of
the claims and defenses.
Accordingly,
it is hereby ordered:
1.
Defendants are enjoined from proceeding with the
trustee’s sale of the real property commonly known as
2911 Sorrento Way, Union City, CA 94587, pending further
order of court.
2.
Plaintiff shall cause a copy of this order to be served on
defendants forthwith, by the speediest practicable means.
3.
Within 7 days of receipt of this order, defendants shall file
any opposition to issuance of a preliminary injunction that
would enjoin the trustee’s sale during the pendency of
this action.
4.
Within 3 days of filing of any such opposition, plaintiff may
file a reply. The matter will then be taken under submission
without oral argument, or set for hearing, in the
Court’s discretion.
5. The
parties may meet and confer to negotiate a less compressed
briefing schedule, provided defendants agree to continue the
foreclosure sale to a date at least ...