United States District Court, N.D. California
JOHN B. GREENE, Plaintiff,
v.
U.S. BANK, N.A. AS LEGAL TITLE TRUSTEE FOR TRUMAN 2016 SC6 TITLE TRUST, et al., Defendants.
ORDER DENYING MOTION FOR PRELIMINARY
INJUNCTION
RICHARD SEEBORG UNITED STATES DISTRICT JUDGE.
I.
INTRODUCTION
Plaintiff
John Greene brings this action against defendants U.S. Bank,
National Association, as Legal Title Trustee for Truman 2016
SC6 Title Trust (“U.S. Bank”), Fay Servicing, LLC
(“Fay”), and NBS Default Services, LLC
(“NBS”) (collectively, “defendants”).
Greene alleges that, for a variety of reasons, defendants
were not legally entitled to foreclose upon his home. His
prior request for a Temporary Restraining Order
(“TRO”) was denied. He now moves for a
preliminary injunction to prevent defendants from taking any
further action pursuant to the foreclosure sale. Pursuant to
Civil Local Rule 7-1(b), the motion is suitable for
disposition without oral argument, and the hearing set for
December 12, 2019 is vacated. For the reasons set forth
below, the motion is denied.
II.
BACKGROUND
In
November 2005, Greene borrowed $599, 000 from World Savings
Bank, secured by a deed of trust recorded against his
Pittsburg, California home.[1] In the following years, World
Savings Bank changed its name to Wachovia Mortgage, and
Wachovia Mortgage was converted to Wells Fargo Bank. In
September 2013, Wells Fargo, via NBS, recorded a notice of
default against the property. In the next five years,
foreclosure was delayed as Greene filed for bankruptcy three
times. Each of his bankruptcies was dismissed. When a relief
from the automatic stay in Greene's third bankruptcy was
granted, a notice of trustee's sale was recorded against
Greene's home on September 20, 2018. The deed of trust
was assigned from Wells Fargo to U.S. Bank on November 28,
2018.
In
2019, Greene filed for bankruptcy two more times. Both
filings were eventually dismissed, the latter on September
18, 2019. Meanwhile, the foreclosure sale of Greene's
home by U.S. Bank, via Fay, occurred on August 5, 2019, and a
deed of sale was recorded on August 8, 2019. An eviction
trial is scheduled to begin imminently in Contra Costa County
Superior Court.[2]Greene filed the present action on November
12, 2019, moving for a TRO and/or a preliminary injunction to
enjoin defendants “from taking action having legal
effect based on the deed of trust, notice of default, notice
of trustee's sale, and trustee's deed...including
conducting a sale, rescheduling a new sale date, transfer of
title, recordation of any liens, proceeding with an unlawful
detainer action…or any other action based on a right
arising out of the subject loan and deed of trust.” The
crux of his complaint is that defendants did not have
authority to conduct the foreclosure sale, because Greene was
not provided adequate notice of the transfers in interests
between the various banks and loan servicers. His application
for a TRO was denied, but the parties were instructed that
Greene's motion for a preliminary injunction would be
considered after the defendants responded.[3]
III.
LEGAL STANDARD
A court
may issue a preliminary injunction to preserve the status quo
pending trial. L.A. Mem'l Coliseum Comm'n. v.
Nat'l Football League, 634 F.2d 1197, 1200 (9th Cir.
1980). Nonetheless, “[a] preliminary injunction is an
extraordinary remedy never awarded as of right.”
Winter v. Natural Res. Def. Council, Inc., 555 U.S.
7, 24 (2008). “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;
Am. Trucking Ass'n, Inc. v. City of Los Angeles,
559 F.3d 1046, 1052 (9th Cir. 2009). Alternatively,
“‘serious questions going to the merits' and
a hardship balance that tips sharply toward the plaintiff can
support issuance of an injunction, assuming the other two
elements of the Winter test are also met.”
Alliance for the Wild Rockies v. Cottrell, 632 F.3d
1127, 1132 (9th Cir. 2011) (interpreting Winter and
explaining that the “sliding scale” test for
preliminary injunctive relief remains valid). “Serious
questions are ‘substantial, difficult and doubtful, as
to make them a fair ground for litigation and thus for more
deliberative investigation.'” Repub. of the
Phil. v. Marcos, 862 F.2d 1355, 1362 (9th Cir. 1988)
(citations omitted).
IV.
DISCUSSION
A.
Likelihood of Success on the Merits
Greene
has not shown a likelihood of success on the merits because,
as defendants rightly point out, his action is likely barred
by res judicata. Greene has initiated two prior
actions related to the present action, one in federal court,
Greene v. Wells Fargo Bank, No. 18-cv-06689
(“First Action”), [4] and another in state court,
Greene v. Fay Servicing, No. MSC19-00177
(“Second Action”). Both were dismissed with
prejudice before the present case was filed.
Federal
courts must give full faith and credit to state court
judgments under 28 U.S.C. § 1738 and Article IV section
1 of the U.S. Constitution. Res judicata, or claim
preclusion, prohibits lawsuits on “any claims that were
raised or could have been raised” in a prior
action. Owens v. Kaiser Found. Health Plan, Inc.,
244 F.3d 708, 713 (9th Cir. 2001) (quoting W. Radio
Servs. Co. v. Glickman, 123 F.3d 1189, 1192 (9th Cir.
1997) (emphasis added)). To determine whether a state court
judgment bars a federal action, a federal court must apply
the res judicata law of the state in which the
judgment was entered. Migra v. Warren City Sch. Dist. Bd.
of Educ., 465 U.S. 75, 81 (1984). Under California law,
res judicata bars claims “only if (1) the
decision in the prior proceeding is final and on the merits;
(2) the present action is on the same cause of action as the
prior proceeding; and (3) the parties in the present action
or parties in privity with them were parties to the prior
proceeding.” Zevnik v. Superior Court, 159
Cal.App.4th 888, 896 (2008).
Here,
viewing the Second Action as the prior proceeding, all three
elements are likely satisfied with respect to Greene's
claims. First, the prior proceeding ended in a final judgment
on the merits. A dismissal with prejudice is a final judgment
on the merits under California law. See Boeken v. Philip
Morris USA, Inc., 230 P.3d 342, 345 (Cal. 2010). The
Second Action was dismissed with prejudice with respect to
defendants U.S. Bank and Fay on October 9, 2019. Thus, the
prior proceeding ended in a final judgment on the merits.
Second,
the present action presents the same cause of action as the
prior proceeding. Mycogen Corp. v. Monsanto Co., 28
Cal.4th 888, 897 (2002) (“[A]ll claims based on the
same cause of action must be decided in a single suit; if not
brought initially, they may not be raised at a later
date.”). “To determine whether two proceedings
involve identical causes of action for purposes of claim
preclusion, California courts have consistently applied the
‘primary rights' theory.” Boeken,
230 P.3d at 348. “[U]nder the primary rights theory,
the determinative factor is the ...