United States District Court, E.D. California
MEMORANDUM AND ORDER
MORRISON C. ENGLAAND. JR. UNITED STATES DISTRICT JUDGE.
before the Court is Plaintiff Michael Stinson's
(“Plaintiff”) application for Temporary
Restraining Order (“TRO”) against Defendant
Specialized Loan Servicing, LLC (“SLS”) to
prevent the foreclosure sale of his home located at 1780
Birchwood Lane in Tracy, California, scheduled for November
6, 2017. Plaintiff filed his application on October 31, 2017;
Defendant filed an opposition on November 2, 2017; and
Plaintiff replied on November 3, 2017. With the sale of his
home scheduled for Monday, November 6, the Court granted
Plaintiff's application by Minute Order on November 3,
expressly providing that the application was granted in order
to provide the Court with sufficient time to review the
parties' filings, and that a formal order would follow.
The following is the Court's formalized Memorandum and
Order granting Plaintiff's application for TRO.
to Plaintiff's First Amended Complaint
(“FAC”), SLS began servicing Plaintiff's
existing home loan at least as of December 2014. In or around
December 2014, Plaintiff sought a loan modification with SLS.
The Court will not recite all facts surrounding
Plaintiff's allegations here, but suffice it to say that
Plaintiff claims he was given the runaround by SLS, was not
assigned a single point of contact (“SPOC”) as
required under the Homeowners Bill of Rights
(“HOBR”), and was asked to resubmit documents on
multiple occasions that he claims he already submitted. On
more than one occasion, Plaintiff's application for loan
modification was closed and he was asked to reapply, which he
did. Plaintiff alleges that at least as of the date of his
FAC, he still had not received a final determination of his
most recent loan modification application, which he submitted
in May or June of 2016. Still, SLS recorded a Notice of Default
(“NOD”) in June 2016, and a Notice of
Trustee's Sale in October 2016. Plaintiff filed the
pending action in August 2016, and filed his FAC in November
2016. The FAC alleges violations of Cal. Civil Code
§§ 2923.7 and 2924.10 (the HOBR), and 15 U.S.C.
§ 1691(a) (the Equal Credit Opportunity Act).
the filing of the FAC, it appears SLS is no longer the
servicer of Plaintiff's loan and has not been since
December 2016. It also appears Plaintiff is aware of this
fact, because in January 2017, Plaintiff submitted a loan
modification application to Shellpoint Mortgage Servicing
(“Shellpoint”), the current loan servicer.
Shellpoint denied that application in May 2017. Plaintiff
appealed, which appeal was denied at least as of July 2017.
Under the June 2016 NOD and October 2016 Notice of
Trustee's Sale filed by SLS, Shellpoint then moved
forward with foreclosure proceedings. The Trustee's Sale
was scheduled for November 6, 2017, at 10 a.m.
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); Dunn v. Cate, No. CIV 08-873-NVW,
2010 WL 1558562, at *1 (E.D. Cal. April 19, 2010).
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
the alternate sliding scale test, the Court finds that
issuance of a TRO is appropriate to preserve the status quo
pending a hearing on Plaintiff's request for preliminary
injunction. Plaintiff has established a likelihood of
irreparable harm to the extent that the sale of his home was
scheduled for November 6, 2017. Similarly, the balance of
hardships tips sharply in Plaintiff's favor because if
the sale had not been enjoined, Plaintiff would have lost his
home of twenty years whereas issuance of this TRO simply
means Defendant will have to wait to foreclose until the
Court has determined-after reviewing additional briefing from
the parties-that foreclosure is appropriate. A TRO in this
case is in the public's interest as it is being used to
ensure compliance with federal laws designed to protect the
the last factor, the Court finds that serious questions as to
the merits of Plaintiff's claims have sufficiently been
raised. On November 3, 2016, the Court dismissed
Plaintiff's first, second, and fourth causes of action
without prejudice. Therein, the Court found that Plaintiff
had adequately alleged material violations of the
but dismissed his claims because-at that time-Plaintiff did
not allege that foreclosure was pending and therefore was not
entitled to the injunctive relief he sought. Because the
foreclosure sale is now indeed pending, that is no longer a
hurdle Plaintiff must overcome.
this likelihood of success on the merits, however, the Court
is unclear whether injunctive relief is available where, as
here, the foreclosing servicer is not the Defendant in this
action. The Court also questions the exact nature of the
relationship between SLS, its counsel, and Shellpoint, and is
unaware of whether Shellpoint was provided notice of the TRO.
Relatedly, Plaintiff sought and obtained review of a
subsequent loan modification application by Shellpoint prior
to Shellpoint proceeding with foreclosure, which process may
impact his ability to enjoin the sale of his home. On the