Farren v. Select Portfolio Servicing, Inc.

          ORDER DENYING PLAINTIFFS' EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER

          JONH A MENDEZ, UNITED STATES DISTRICT JUDGE

         Bettina Farren ("Mrs. Farren") and Steve Farren ("Mr. Farren") (collectively "Plaintiffs") applied ex parte for a temporary restraining order ("TRO") (Doc. #13).^[1] As explained below, Plaintiffs are not likely to succeed on the merits of their claims. Thus, the Court denies Plaintiffs' motion for a TRO.

         I. FACTUAL ALLEGATIONS

         In March 2007, Plaintiffs added Mrs. Farren's brother, Steven Hinrichs, and Mr. Hinrichs' wife to the title of real property located at 2045 Salmon Falls Road in El Dorado Hills, California ("Subject Property"). Declaration of Bettina Farren ("Mrs. Farren Decl.") ¶ 8. A $1, 464, 000.00 loan was taken out and secured by the Subject Property. Compl. ¶ 12. Plaintiffs signed the Deed of Trust. Id. ¶ 16. But, Plaintiffs did not sign the Adjustable Rate Note (the "Note"). Exh. A to SPS's Request for Judicial Notice (Doc. #9). Only Mr. and Mrs. Hinrichs signed the Note. Id.

         In December 2008, JP Morgan Chase Bank ("Chase") issued a notice of default against the Subject Property. Compl. ¶ 18. In January 2016, Quality Loan Service Corporation ("Quality") became the trustee of the Deed of Trust. Id. ¶ 24. In March 2016, Quality recorded a Notice of Trustee's Sale for the Subject Property for April 14, 2016. Id. ¶ 25.

         On April 8, 2016, Mrs. Farren submitted a complete loan modification application to Defendant Select Portfolio Servicing ("SPS"). Mrs. Farren Decl. ¶ 11. Mrs. Farren has not received any acknowledgement of the receipt of her application and has not received notice about whether the application has been denied. Id. ¶¶ 11, 12. Mrs. Farren also made several calls to SPS to discuss modification of the loan. Id. ¶¶ 48-50. Alison Luna, an SPS representative, told Mrs. Farren that SPS could not postpone the foreclosure sale because Mrs. Farren's name was not on the Note. Id. ¶ 50.

         On April 14, 2016, Plaintiffs obtained a TRO in El Dorado Superior Court which enjoined Defendants from conducting the trustee's sale of the Subject Property. Exh. 7 to Request for Judicial Notice (Doc. #3). On May 19, 2016, Defendant Chase removed the case to federal court (Doc. #1). The foreclosure sale is now set for July 11, 2016. Mrs. Farren Decl. ¶ 4. Plaintiffs submitted a motion for a TRO on July 6, 2016 to enjoin the foreclosure sale scheduled for July 11 (Doc. #13). Defendants did not file an opposition.

         II. OPINION

         A. Legal Standard

         Federal Rule of Civil Procedure ("Rule") 65 provides authority to issue either preliminary injunctions or TROs. A plaintiff seeking a preliminary injunction must demonstrate that he is "[1] 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." Am. Trucking Assn's v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009) (quoting Winter v. Natural Res. Def. Council, 555 U.S. 7, 20 (2008)). The requirements for a TRO are the same. Stuhlbarg Int'l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 839 n. 7 (9th Cir. 2001). A party seeking an ex parte TRO must "clearly show that immediate and irreparable injury, loss, or damage will result to the movant before the adverse party can be heard in opposition" and "the movant's attorney [must] certif[y] in writing any efforts made to give notice and the reasons why it should not be required." Fed.R.Civ.P. 65(b). Ex parte TROs are appropriate only when necessary to prevent irreparable harm and should be imposed only "so long as is necessary to hold a hearing." Granny Goose Foods, Inc. v. Bhd. of Teamsters & Auto Truck Drivers Local No. 70 of Alameda Cty., 415 U.S. 423, 439 (1974).

         Local Rule 231(b) states that courts "will consider whether the applicant could have sought relief by motion for preliminary injunction at an earlier date without the necessity of seeking last-minute relief by motion for temporary restraining order." If the Court finds that the movant unduly delayed in seeking injunctive relief, "the Court may conclude that the delay constitutes laches or contradicts the applicant's allegations of irreparable injury and may deny the motion solely on either ground." Local Rule 231(b).

         B. Analysis

         1. Undue Delay

         Defendants removed this case to federal court on May 19, 2016. Plaintiffs did not file their TRO until nearly six weeks later and only five days before the scheduled trustee's sale. Plaintiffs' attorney states that he received notice on June 24, 2016 from defense counsel stating that SPS would not postpone the trustee's sale. Declaration of John Sargetis ¶ 4. Plaintiffs waited almost two weeks to file the application for a TRO. Plaintiffs' counsel's excuse for this delay is that he has "at the same time these past two weeks been working on pre exiting [sic] deadlines on numerous other cases." Id. Plaintiffs' delay in filing the TRO is of concern to the Court. However, Plaintiffs' TRO application will not be denied on this ground. 2. Likelihood of Success on the Merits Plaintiffs argue that they are likely to succeed on the merits of their claims on two grounds. First, Plaintiffs argue they are likely to succeed on their second cause of ...