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Startz v. JPMorgan Chase Bank, N.A.

United States District Court, C.D. California

May 19, 2017





         Plaintiff Jonathan Startz moves for a preliminary injunction to enjoin Defendants from foreclosing on real property that Plaintiff owns. (ECF No. 26.) After reviewing the papers filed in support of and in opposition to the Motion, the Court deems the Motion appropriate for decision without oral argument, Fed.R.Civ.P. 78(b); C.D. Cal. L.R. 7-15, and thus VACATES the hearing date on this Motion. Moreover, for the reasons discussed below, the Court DENIES the Motion.


         In 2007, Plaintiff and his wife Marie Startz obtained a mortgage from Washington Mutual Bank (later sold to Chase) to purchase property in Westlake Village, California. (Compl. ¶ 9; Bouvee Decl., Ex. A at 17.)[1] In or around July 2015, after falling behind on his mortgage payments, Plaintiff called Chase and requested a payment plan to help him bring his payments current. Chase instructed Plaintiff to submit a written Request for Mortgage Assistance. (Compl. ¶¶ 10-11.) Plaintiff subsequently submitted such a Request (“RMA #1”), along with various supporting documentation, to Chase. (Id.) On January 25, 2016, Chase sent Plaintiff a letter informing him that it had finished its review of RMA #1 and identified options for which Plaintiff was and was not eligible. (Id. ¶ 17, Ex. 3; Bouvee Decl., Ex. A.) The letter indicated that Plaintiff was eligible for short sale assistance or a deed-in-lieu of foreclosure, but that he was not eligible for any loan modification or mortgage forgiveness programs. (Bouvee Decl., Ex. A at 9-10.)

         Shortly thereafter, Plaintiff contacted Chase and again requested a payment plan for the amount that he was in arrears. (Compl. ¶ 18.) Chase “responded that they would look into the matter and get back to him.” (Id.) On March 1, 2016, Chase sent a letter to Plaintiff stating that Plaintiff must submit a further written Request for Mortgage Assistance along with a list of specific documents on or before March 31, 2016. (Compl. ¶ 19, Ex. 4.) Four days later, Plaintiff submitted the further Request (“RMA #2”) along with “all requested information” to Chase. (Id. ¶ 20.)[2] On May 24, 2016, Chase sent a letter to an attorney retained by Plaintiff indicating that it still required a proof of occupancy for the “additional customer, ” and that Plaintiff must submit this documentation on or before June 16, 2016. (Id. ¶ 26, Ex. 7.) On June 23, 2016, Plaintiff's attorney sent Chase a letter stating that the “additional customer”-to the extent that Chase was referring to Marie Startz-no longer lives at the property, for she and Plaintiff were in the divorce process and the property would be awarded to Plaintiff as his separate property. (Id. ¶ 28, Ex. 9.)

         On July 18, 2016, Defendant Quality Loan Service (“QLS”) recorded a notice of default against the property. (Id. ¶ 29, Ex. 10.) Plaintiff's attorney subsequently informed Chase on two occasions that the notice was unlawfully recorded because Plaintiff's loan modification application was still outstanding. (Id. ¶¶ 30-31, Ex. 11- 12.) On September 16, 2016, Chase sent Plaintiff's attorney a letter indicating it was “currently” reviewing the loan “for any available payment assistance options, ” and that it suspended foreclosure activity on the home pending this review. The letter indicated that Chase “still require[d] further documentation to prove that our customers currently occupy the subject property, and an appraisal needs to be completed.” (Bouvee Decl., Ex. B.) The letter further declined to rescind the March 10, 2016 notice of default[3] because Plaintiff's loan payments were not current. (Id.)

         On November 14, 2016, QLS recorded a notice of trustee's sale, scheduling the sale date for December 9, 2016. (Id. ¶ 32, Ex. 13.) Four days later, Chase sent a letter to Plaintiff's attorney indicating that it had finished reviewing RMA #2, and that it had again determined that Plaintiff was eligible for only short sale assistance or a deed-in-lieu of foreclosure, and not for any loan modification program. (Bouvee Decl., Ex. D at 33-39.) On December 2, 2016, Plaintiff filed this action in the Ventura Superior Court and immediately sought a temporary restraining order to enjoin the foreclosure sale. (Not. of Removal, Exs. E-H.) It is unclear whether or not the state court granted the application, but nonetheless it appears that the sale never went forward.

         On December 5, 2016, Chase sent a letter to Plaintiff's attorney denying that the loan was dual-tracked, stating that “[a]s of November 9, 2016, our request for proof of occupancy was still outstanding, ” and thus Chase did not have a complete modification package. (Bouvee Decl., Ex. C.) Further, the letter stated that Chase “d[id] not have records showing we denied our client's payment assistance review on July 18, 2016, ” and that at the time they were “still reviewing our client for payment assistance programs.” (Id.)

         On December 29, 2016, Chase removed this action to federal court. (ECF No. 1.) On March 24, 2017, QLS recorded a further notice of trustee's sale, which set a sale date of April 25, 2017. (Klein Decl., Ex. A.) On April 20, 2017, Plaintiff filed an ex parte application for a temporary restraining order seeking to enjoin the April 25 foreclosure sale. (ECF No. 26.) Chase responded that it would postpone the foreclosure sale until May 25, 2017, so that Plaintiff's application could be fully briefed as a motion for preliminary injunction. (ECF No. 28.) The Court thus set a briefing schedule on the Motion. (ECF No. 29.) Chase filed a timely opposition to the Motion, but Plaintiff did not file a timely reply. (ECF No. 38.) Plaintiff's Motion is now before the Court for decision.


         A court may enter a preliminary injunction where the moving party shows: (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). “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”).


         Plaintiff asserts the following claims in his Complaint: (1) dual-tracking of the loan in violation of the California Homeowners Bill of Rights Act (“HBOR”), Cal. Civ. Code § 2923.6(c), and 12 C.F.R. § 1024.41; (2) failure to post the notice of trustee's sale on the property in ...

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