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McKinney v. Wells Fargo Bank, N.A.

United States District Court, E.D. California

June 30, 2019

MARY E. McKTNNEY, Plaintiff,
WELLS FARGO BANK, N.A., Defendant.



         Plaintiff Mary E. McKinney ("Plaintiff) brings this action against Defendant Wells Fargo Bank ("Defendant" or "WFB") alleging violations of California's Homeowner Bill of Rights ("LIBOR"), as well as negligence in the handling of Plaintiff s loan modification applications, and violations of California's Unfair Competition Law ("UCL"), California Business and Professions Code § 17200 etseq., resulting from the handling of Plaintiff s loan modification applications. Plaintiff filed her Complaint in state court on November 17, 2017, and Defendant removed the action to this Court on December 7, 2017. (ECF No. 1.) Plaintiff filed an Ex Parte Application for Temporary Restraining Order ("TRO") on January 10, 2019 (ECF No. 11), which the Court granted on January 18, 2019 (ECF No. 14). Presently before the Court is Plaintiffs Motion for Preliminary Injunction, timely filed on February 7, 2019. (ECF No. 15.) WFB has filed an Opposition. (ECF No. 16.) For the reasons set forth below, Plaintiff s Motion is DENIED and the TRO is VACATED.

         I. Factual and Procedural Background [1]

         As set forth in the Court's Order on Plaintiffs request for TRO (ECF No. 14), the parties agree on the majority, if not all, of the facts pertinent to this action. Plaintiff obtained a loan on the subject property, her primary residence, in December 2007 through World Savings Bank FSB. Via a series of name changes and mergers, Defendant WFB thereafter became the servicer on the relevant loan. Plaintiff then fell behind on her mortgage payments. Defendant claims-and Plaintiff does not dispute-the default first occurred in October 2012 and eventually led to a Notice of Default ("NOD") recorded in February 2013. The parties then engaged in the process of submitting and reviewing multiple loan modification applications ("LMAs"). Specifically, Plaintiff submitted LMAs in April 2014 and September 2015, both of which were denied in writing. (ECF No. 16-1 ¶¶ 13-14; Exs. B, C.) Plaintiff thereafter filed a lawsuit against WFB, case number 2:16-cv-00240-JAM-KJN, which action the parties settled in June 2016. According to Defendant, WFB agreed as part of that settlement to conduct another loan modification review. That review was also denied in writing in July 2016. (ECF No. 16-1 ¶ 15, Ex. D.) Defendant filed a Notice of Trustee Sale ("NOTS") on January 5, 2017.

         Plaintiff alleges that in June 2017, she submitted another LMA. (ECF No. 1 ¶ 30.) Plaintiff asserts she was thereafter "shuffled from one representative to another every time she called to check on the status of [the] application," and that WFB never assigned a Single Point of Contact ("SPOC") as required under the HBOR. (ECF No. 1 ¶ 31.) Plaintiff alleges that in October 2017, she was informed over the phone that her LMA was denied. (Id. ¶ 33.) According to Plaintiff, WFB only stated that she could afford the loan, gave no other reasoning for the denial, and never provided her with a written denial. (Id. ¶¶ 33-34.) Defendant is silent on this issue and neither party has submitted evidence of the 2017 LMA aside from Plaintiffs signed declaration (ECF No. 15-1 at 1-2).

         Plaintiff then filed the present lawsuit in state court on November 17, 2017, and Defendant removed the action to this Court on December 7, 2017. (ECF No. 1.) Plaintiffs Complaint (ECF No. 1) alleges violations of the HBOR, as well as negligence in the handling of Plaintiffs loan modification application, and violations of the UCL resulting from WFB's handling of a loan modification application submitted in June 2017.

         After filing her Complaint, Plaintiff submitted another loan modification application in August 2018, which was denied in writing later that month. Therein, Plaintiff was offered a short sale of her home, but took no action in that regard. (See ECF No. 15-2 at 41-46.) Instead, Plaintiff appealed the denial by a letter from counsel dated October 2, 2018, specifically requesting additional information regarding the reasons for denial pursuant to California Civil Code § 2924.11. (Id. at 48-50.) WFB denied the appeal in writing later that month. (Id. at 52-53.) The letter denying Plaintiffs appeal provided only that Plaintiff "still [did] not meet the requirements for loan modification." (Id. at 52.) Defendant asserts that it then mailed Plaintiff a second letter, dated October 25, 2018, responding to Plaintiffs request for information and providing the requested documentation. (ECF No. 16-1 at 72-79.) Plaintiff asserts that she did not receive the letter and had not seen it until it was filed in connection with Defendant's Opposition to her Motion for Preliminary Injunction. (ECF No. 18.)

         On December 14, 2018, WFB issued another Notice of Sale, setting the sale date for January 22, 2019. (Id. at 55-62.) Plaintiff thereafter sought and received the operative TRO, and-upon Order from this Court-filed the present Motion for Preliminary Injunction. (ECF Nos. 14-15.) The Court understands another date for non-judicial foreclosure sale has been set for July 2, 2019, and WFB has requested a ruling on the pending preliminary injunction motion to clarify the parties' rights and obligations with respect to the previously-issued TRO, the pending Motion for Preliminary Injunction, and the approaching sale date. (ECF No. 23.)

         II. Standard of Law

         Injunctive relief is "an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." Winter v. Natural Res. Def. Council, Inc. , 555 U.S. 7, 22 (2008) (citing Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (per curiam)). "The purpose of a preliminary injunction is merely to preserve the relative positions of the parties until a trial on the merits can be held." Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981); see also Costa Mesa City Emps. Ass 'n v. City of Costa Mesa, 209 Cal.App.4th 298, 305 (2012) ("The purpose of such an order is to preserve the status quo until a final determination following a trial.");, Inc. v. Walt Disney, Co., 202 F.3d 1199, 1210 (9th Cir. 2000) ("The status quo ante litem refers not simply to any situation before the filing of a lawsuit, but instead to the last uncontested status which preceded the pending controversy.").

         "A plaintiff seeking a preliminary injunction must establish [1] that he is 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." Winter, 555 U.S. at 20. A plaintiff must "make a showing on all four prongs" of the Winter test to obtain a preliminary injunction. Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011). In evaluating a plaintiffs motion for preliminary injunction, a district court may weigh the plaintiffs showings on the Winter elements using a sliding-scale approach. Id. A stronger showing on the balance of the hardships may support issuing a preliminary injunction even where the plaintiff shows that there are "serious questions on the merits ... so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest." Id. Simply put, Plaintiff must demonstrate, "that [if] serious questions going to the merits were raised [then] the balance of hardships [must] tip[ ] sharply in the plaintiffs favor," in order to succeed in a request for preliminary injunction. Id. at 1134-35 (emphasis added).

         III. Analysis

         Upon issuing the TRO in this matter, the Court found that Plaintiff had made a showing on all four prongs of the Winter test articulated above. At that time, Plaintiff had established a likelihood of irreparable harm because the scheduled trustee's sale of her home was imminent. While that harm still exists, on further briefing from both parties, the Court finds Plaintiff has not established a likelihood of success on the merits of her claims, nor has she raised serious questions going to the merits of those claims, as discussed in detail below.

         A. Likelihood of ...

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