United States District Court, E.D. California
MEMORANDUM AND ORDER
MORRISON C. ENGLAND JR. UNITED STATES DISTRICT JUDGE
Omar Bermudez (“Plaintiff”) initiated this action
against Defendant Caliber Home Loans, Inc.
(“Defendant”) on July 10, 2016, and filed an
Application for a Temporary Restraining Order and/or
Preliminary Injunction (ECF No. 3) that same day. By way of
that application, Plaintiff seeks to enjoin the July 15,
2016, sale or attempted sale of real property located at 854
Oak Lane, Rio Linda, California, 95673 (the
“Property”). Defendant has filed an Opposition to
Plaintiff’s Application, and Plaintiff has filed a
Reply. ECF Nos. 13, 20. A hearing on the matter was held
before the Court at 2:00 p.m. on Thursday, July 14, 2016.
Having considered the written record in its entirety and the
oral arguments of counsel, the Court hereby GRANTS
purchased the Property in 2005, ostensibly by obtaining a
loan that is now serviced by Defendant. Plaintiff refinanced
his primary mortgage in 2007 and continued making payments
for approximately two more years before he defaulted on his
obligation. It appears from the property profile that
Plaintiff submitted in support of his Application that a
notice of default was subsequently recorded on or about
February 9, 2016, and a trustee’s sale was scheduled
for July 15, 2016.
response, Plaintiff submitted an application for a loan
modification to Defendant on February 15, 2016. According to
that application, Plaintiff’s gross income at the time
was $2, 500 per month. That application was denied for lack
of income on March 18, 2016, and Defendant advised Plaintiff
that he had until April 17, 2016, to appeal the decision.
Plaintiff did not appeal.
21, 2016, Plaintiff instead submitted a new loan modification
application, this time reflecting his updated monthly income
of $5, 950. On June 2, 2016, Plaintiff’s counsel
contacted Defendant and was informed that the application was
complete and had been sent to an underwriter. The following
week, counsel called again and was told that the application
was still being reviewed by the underwriter. Still having
heard nothing by July 7, 2016, counsel called one more time
and was at this point advised that the modification had been
denied on June 16, 2016, and that Defendant would not
entertain an appeal since it was too close to the date of the
Property’s scheduled sale. Plaintiff filed suit in this
Court three days later.
purpose of a temporary restraining order is to preserve the
status quo pending the complete briefing and thorough
consideration contemplated by full proceedings pursuant to a
preliminary injunction. See Granny Goose Foods, Inc. v.
Teamsters, 415 U.S. 423, 438-39 (1974) (temporary
restraining orders “should 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”); see also Reno Air
Racing Ass’n., Inc. v. McCord, 452 F.3d 1126, 1131
(9th Cir. 2006).
of a temporary restraining order, as a form of preliminary
injunctive relief, is an extraordinary remedy, and Plaintiffs
have the burden of proving the propriety of such a remedy.
See Mazurek v. Armstrong, 520 U.S. 968, 972 (1997).
In general, the showing required for a temporary restraining
order and a preliminary injunction are the same.
Stuhlbarg Int’l Sales Co., Inc. v. John D. Brush
& Co., Inc., 240 F.3d 832, 839 n.7 (9th Cir. 2001).
party requesting preliminary 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 Resources Defense
Council, 555 U.S. 7, 20 (2008); Stormans, Inc. v.
Selecky, 586 F.3d 1109, 1127 (9th Cir. 2009) (quoting
Winter). The propriety of a TRO 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).
under the so-called sliding scale approach, as long as the
Plaintiffs demonstrate the requisite likelihood of
irreparable harm and show that an injunction is in the public
interest, a preliminary injunction can still issue so long as
serious questions going to the merits 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
practice by mortgage lenders of negotiating with homeowners
in default on their applications for a loan modification,
while simultaneously advancing the foreclosure process, is
commonly referred to as “dual tracking.” Dual
tracking has been heavily criticized by both state and
federal legislators. In July 2012, California passed
legislation referred to as the California Homeowner Bill of
Rights, which prohibits such practices. That Bill of Rights
went into effect the following year and offers homeowners
greater protection during the foreclosure process. Cal. Civ.
Code § 2923.6(b). Section 2923.6(b) states that
“it is the intent of the legislature that the mortgage
servicer offer the borrower a loan modification or work out a
plan if such a modification or plan is consistent with its
contractual or other authority.” The statute goes on to
If a borrower submits a complete application for a first lien
loan modification offered by, or through, the borrower's
mortgage servicer, a mortgage servicer, mortgagee, trustee,
beneficiary, or authorized agent shall not . . . conduct a
trustee's sale, while the complete first lien loan
modification application is pending. A mortgage servicer,
mortgagee, trustee, beneficiary, or ...