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Womandress v. Specialized Loan Servicing, LLC

United States District Court, C.D. California

July 8, 2016

SPECIALIZED LOAN SERVICING, LLC and DOES 1-50, inclusive, Defendants.




         On July 6, 2016, Plaintiffs Manuel and Sharon Womandress applied ex parte for a temporary restraining order enjoining Defendant Specialized Loan Servicing LLC from proceeding with a foreclosure sale on July 8, 2016. (ECF No. 17.) Defendant opposed. (ECF Nos. 20, 21.) For the reasons discussed below, the Court DENIES Plaintiffs' application. (ECF No. 17.)


         Plaintiffs are the owners of a house located in Temecula, California. (First Am. Compl. ("FAC") ¶1.) On March 20, 2007, Plaintiffs received a loan from Residential Mortgage Capital in the amount of $799, 950 to purchase this house. (Req. for Judicial Notice ("RJN"), Ex. 1, ECF No. 21.)[1] It is unclear what relationship Defendant has, if any, to the original lender, but at any rate, Defendant is now servicing this loan. (See FAC ¶ 7; RNJ, Exs. 2-3.) Plaintiffs allege that Defendant "intentionally overstated Plaintiffs' income on the loan application, " failed to make numerous disclosures required under the Truth in Lending Act, failed to provide meaningful loan modification assistance, and dual-tracked the mortgage in violation of the California Homeowner Bill of Rights Act. (Id. ¶¶ 12, 14-15, 24, 34-35.) The FAC lacks any specific factual details surrounding these allegations.

         On November 12, 2015, Defendant recorded a Notice of Default at the Riverside County Recorder's Office, which stated that Plaintiffs owed $169, 908.49 on the mortgage. (RJN, Ex. 2.) On March 17, 2016, Defendant recorded a Notice of Trustee's Sale, giving notice that it intended to hold a trustee's sale on April 14, 2016. (Id. Ex. 3.) It appears that the trustee's sale was rescheduled for July 8, 2016.

         On April 11, 2016, Plaintiffs filed this action in the Riverside Superior Court. (ECF No. 1.) On May 13, 2016, Defendant removed the case to federal court. (Id.) On July 3, 2016, Plaintiffs filed a FAC, in which they assert the following causes of action: (1) violation of California Business and Professions Code section 17200 ("UCL"); (2) breach of the implied covenant of good faith and fair dealing; and (3) violation of the California Homeowners Bill of Rights Act. (ECF No. 15.) On July 6, 2016, Plaintiffs filed this ex parte application for a temporary restraining order, seeking to enjoin the impending foreclosure sale. (ECF No. 17.) The following day, Defendant filed a timely opposition. (ECF Nos. 20-21.) That ex parte application is now before the Court for consideration.


         "A preliminary injunction is 'an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion.'" Lopez v. Brewer, 680 F.3d 1068, 1072 (9th Cir. 2012) (emphasis in original) (quoting Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (per curiam)). To prevail, the moving party must show: (1) a likelihood of success on the merits; (2) a likelihood that the moving party will suffer irreparable harm absent preliminary injunctive relief; (3) that the balance of equities tips in the moving party's favor; and (4) that preliminary injunctive relief is in the public interest (the 'Winter factors"). Winter v. Nat'l Res. Def. Council, Inc., 555 U.S. 7, 20 (2008); Lockheed Missile & Space Co. v. Hughes Aircraft Co., 887 F.Supp. 1320, 1323 (N.D. Cal. 1995) ("The standard for issuing a temporary restraining order is identical to the standard for issuing a preliminary injunction."). "Under Winter, plaintiffs must establish that irreparable harm is likely, not just possible, in order to obtain a preliminary injunction." Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1132 (9th Cir. 2011) (original emphasis). In the Ninth Circuit, "'serious questions going to the merits' and a hardship balance that tips sharply toward the plaintiff can [also] support issuance of an injunction, assuming the other two elements of the Winter test are also met." Id. at 1132, 1135 (holding that the "sliding scale" test remains viable "so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest").


         The Court concludes that Plaintiffs do not clearly show that that they have met the Winter factors. Thus, the Court declines to issue the requested TRO.

         A. Likelihood of Prevailing on Merits

         1. UCL Claim

         "The UCL does not proscribe specific activities, " but instead "'borrows' violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable." Puentes v. Wells Fargo Home Mortgage, Inc.,160 Cal.App.4th 638, 643-44 (2008) (citations omitted); Cel-Tech Commc'ns, Inc. v. L.A. Cellular Tel. Co.,20 Cal.4th 163, 180 (1999). Here, Plaintiffs allege that the predicate violation was the failure to make various ...

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