Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_10-cv-01073/USCOURTS-cand-5_10-cv-01073-5/pdf.json

Nature of Suit Code: 371
Nature of Suit: Truth in Lending
Cause of Action: 28:1441 Petition for Removal

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28 This disposition is not designated for publication in the official reports. 1

Case Number CV10-01073 JF (HRL)

ORDER DENYING PRELIMINARY INJUNCTION 

(JFLC1)

**E-Filed 5/12/2010**

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

LAURA GENS,

 Plaintiff,

 v.

WACHOVIA MORTGAGE CORPORATION;

CAL-WESTERN RECONVEYANCE

CORPORATION; WORLD SAVINGS BANK,

FSB; WACHOVIA MORTGAGE, FSB; GOLDEN

WEST SAVINGS ASSOCIATION SERVICE CO.,

and DOES 1-20 inclusive,

 Defendants.

Case Number CV10-01073 JF (HRL)

ORDER DENYING PRELIMINARY 1

INJUNCTION 

[re: docket no. 5]

I. BACKGROUND

A. Procedural Background

On February 26, 2010, Plaintiff Laura Gens (“Plaintiff”) filed the instant action in the

Santa Clara Superior Court against Defendants Wachovia Mortgage Corporation, Cal-Western

Reconveyance Corporation, World Savings Bank, FSB, Wachovia Mortgage, FSB, Golden West

Savings Association Service Co., and Does 1-20, inclusive (collectively, “Defendants”), alleging

Case 5:10-cv-01073-LHK Document 46 Filed 05/12/10 Page 1 of 14
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 On April 22, 2010, Wachovia moved for leave to supplement its briefing in opposition 2

to Plaintiff’s motion for a preliminary injunction. Plaintiff opposed the motion. The Court

determined that Wachovia had not articulated its newly alleged unclean hands argument or

otherwise shown cause to supplement its briefing and denied the motion for leave. On May 6,

less than twenty-four hours before the third scheduled hearing on the instant motion, Plaintiff

submitted a supplemental brief and request for judicial notice without seeking leave of Court. 

Plaintiff did not provide an explanation for the late filing. The Court reviewed the late filing to

determine whether or not Plaintiff had raised arguments or presented facts that could not have

2

Case Number CV10-01073 JF (HRL)

ORDER DENYING PRELIMINARY INJUNCTION 

(JFLC1)

violations of the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601, et seq and the Real Estate

Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601 et seq., and also asserting eleven statelaw claims for relief. On the same date, the state court issued an ex parte temporary restraining

order (“TRO”) enjoining Defendants from transferring ownership interest in the subject property

located at 4141 Old Trace Road, Palo Alto, California (“the Property”) and setting the matter for

further hearing on March 18, 2010. 

Defendants thereafter rescheduled their scheduled sale of the Property to March 22, 2010,

one day after the TRO issued by the state court would expire by operation of law, and then

removed the action to this Court on March 12, 2010, six days prior to the hearing that had been

scheduled by the state court. On March 18, 2010, Plaintiff filed an application for a TRO in this

Court, and Defendants filed opposition papers. In light of the state court’s order, this Court

scheduled a hearing on Plaintiff’s motion for injunctive relief and issued its own TRO restraining

Defendants from proceeding with any sale or otherwise transferring ownership of the Property

pending the hearing and further order of the Court. The Court subsequently referred the parties

to Magistrate Judge Lloyd for a settlement conference. Because of scheduling conflicts the Court

then directed the parties to private mediation. Order re Mediation at 2 (noting that Wachovia

consented to pay all fees and costs billed by JAMS). The parties returned for a second hearing on

the instant motion on April 16, 2010. Based on the parties statements at that hearing, the Court

again directed the parties to a settlement conference with Magistrate Judge Lloyd, which was

unsuccessful. Having considered Plaintiff’s application and Defendants’ opposition thereto and

the oral arguments presented at the hearing on May 7, 2010 and for the reasons discussed below,

the motion for a preliminary injunction will be denied.2

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been asserted previously and concluded that it did not. Accordingly, the Court has not

considered Plaintiff’s supplemental brief or request for judicial notice in deciding the instant

motion. 

 On March 25, 2010, Plaintiff filed a second amended complaint (“SAC”). Because

3

Plaintiff’s motion for a preliminary injunction was based upon the FAC, this order is as well. 

Moreover, the new facts alleged by Plaintiff in the SAC would not alter the determination of the

instant motion. 

3

Case Number CV10-01073 JF (HRL)

ORDER DENYING PRELIMINARY INJUNCTION 

(JFLC1)

B. Factual Background

On November 17, 2006, Plaintiff obtained a $1.62 million loan (the “Loan”) from

Defendant World Saving Bank, FSB (“WSB”). The loan secured a Deed of Trust recorded

against the Property. First Amended Complaint (“FAC”) ¶ 10; Declaration of Bonnie Kathleen 3

Ransom (“Ransom Decl.”), Exs. 3 (the Note), 4 (Deed of Trust). Plaintiff alleges that the initial

disclosures for the Loan “do not contain the initial [Federal Truth in Lending Act disclosures

required.” FAC ¶ 75. However, Defendants submit with their opposition papers a Federal Truth

in Lending Disclosure Statement (“TILDS”) and Notice of Right to Cancel (“NRC”),

acknowledged and signed as received by Plaintiff. Ransom Decl., Exs. 5 (copy of the TILDS

signed by Plaintiff), 6 (copy of the NRC signed by Plaintiff). 

Plaintiff also alleges that the “terms of the finance transaction with World Savings are not

clear or conspicuous...” FAC. ¶ 14. However, as Defendants assert in their opposition papers:

Plaintiff acknowledged receipt of, by signing, (i) the Loan Program Disclosure

which informed her that the interest rate can change and how the new interest rate

is calculated. ([Ransom Decl.] Exh. 7 [Loan Program Disclosure Pick-A-Payment

Loan]); (ii) the Deferred Interest Acknowledgment which informed her that she

could pick the payment that she wanted to make but if the amount that she picked

was insufficient to cover the principal and accrued interest, then that deferred

interest would be added onto her Loan’s balance. ([Id.,] Exh. 8 [Deferred Interest

Acknowledgment]); (iii) Plaintiff then picked her monthly payment of

approximately $6,000. ([Id.,] Exh. 9)[(electing to make an initial monthly

payment amount of $5,987.84)]; and, (iv) the Prepayment Feature

Acknowledgment which informed her that for the first year only, a prepayment fee

would apply if she prepaid more than $5,000 in any month. ([id.,] Exh.10

[Prepayment Feature Acknowledgment]]).

Opp. at 2. 

Plaintiff claims that “[s]ometime before November 2008, Defendant Wachovia Mortgage

Corporation...substituted as beneficiary and loan servicer in place of World Savings” without

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 The letter issued by the Office of Thrift Supervision, Department of the Treasury, 4

approving WSB’s request to “amend the savings bank’s charter and bylaws [and] to change its

name to Wachovia Mortgage, FSB...”, RJN, Ex. 1, will be judicially noticed as it “is capable of

accurate and ready determination by resort to sources whose accuracy cannot reasonably be

questioned.” Fed. R. Evid. 201(b)(2). 

4

Case Number CV10-01073 JF (HRL)

ORDER DENYING PRELIMINARY INJUNCTION 

(JFLC1)

providing Plaintiff with proper notice. FAC ¶ 29. However, Defendants present evidence that

Wachovia did not substitute WSB as beneficiary but rather that WSB changed its name to

Wachovia. Defendants’ Request for Judicial Notice (“RJN”), Ex. 1 (Letter from the Office of

Thrift Supervision in the Department of Treasury indicating that WSB’s name change to

Wachovia would be effective December 31, 2007).4

In April 2008, a Notice of Default was recorded against the Property by Golden West

Savings Association Service Company (“GWS”). Ransom Decl., Ex. 11 (“Notice of Default”).

On November 4, 2008, GWS recorded a Notice of Trustee’s Sale. Id. Ex. 12 (“First Notice of

Trustee’s Sale”). The first Notice of Trustee’s Sale reflects a total amount owing of

approximately $1.85 million. Id. ¶ 2. In November 2008, Plaintiff paid $80,000 to Wachovia. 

Plaintiff contends that this payment formally reinstated the loan. Plaintiff Ex. C (November 19,

2008 letter written by Plaintiff and Plaintiff’s husband Timothy Gens to Wachovia) (stating that

“[i]n exchange for the presentation of the $80,000 in certified funds, the default/foreclosure is to

be fully cured/reinstated and the loan will be modified. Wachovia will stop the trustee’s sale on

the identified property currently scheduled for Friday November 21, 2008 in San Jose. If this is

not our agreement, please let us know before cashing these funds.”) Defendants argue that the

$80,000 payment only postponed the trustee’s sale, that Plaintiff still was in arrears in the

amounts of $50,738.38, and that the payment did not lead to full reinstatement of the loan. 

Ransom Decl., Ex. 13 (Forbearance Plan Agreement sent by Wachovia and signed by Plaintiff)

(stating that “[i]n exchange for receipt of this signed agreement and your non-refundable

payment of $80,000.00...on or before 11/19/2008, Wachovia Mortgage will agree to forbear

foreclosure activities on [your] loan until 12/19/2008...If, after receipt of this signed agreement

and the $80,000.00 payment, the above referenced loan is not brought current or paid in full on or

before 12/19/2008, Wachovia Mortgage will pursue or continue the remedies available to it as

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5

Case Number CV10-01073 JF (HRL)

ORDER DENYING PRELIMINARY INJUNCTION 

(JFLC1)

stated in your Note and Security Instrument.”)

On January 16, 2009, a Substitution of Trustee was recorded and mailed to Plaintiff by

certified mail, substituting Cal-Western as the trustee. Declaration of Jennifer Victa (“Victa

Decl.”), Ex. 1 (Recorded Substitution of Trustee), Ex. 2 (Affidavit of Mailing). It is undisputed

that Defendants did not provide Plaintiff with a second Notice of Default after the forbearance

agreement was signed in November 2008. On February 19, 2010, a second Notice of Trustee’s

Sale was recorded noticing a sale for March 11, 2010. RJN, Ex. 2 (Notice of Trustee’s Sale

Recorded on February 19, 2010). 

A dispute exists as to when the Notice of Sale was posted on Plaintiff’s property. 

Plaintiff contends that the notice was not posted until February 22, 2010. Declaration of Julia

Gens ¶ 1 (stating that when she left the Property at 10:30 A.M. on February 22 there was nothing

affixed to the door and that when she returned at 11:00 A.M. a Notice of Trustee’s Sale had been

posted); Declaration of Timothy Gens ¶ 1 (asserting that his daughter, Julia Gens, drew his

attention to a Notice of Trustee’s Sale that had been posted on the door of the house on February

22); Declaration of Laura Gens ¶ 1 (claiming that when she left for work on February 22 there

was nothing posted on the front door of the Property and that when she returned from work her

daughter informed her that a Notice of Trustee’s Sale had been posted that morning). Defendants

assert that a Certificate of Posting on file with Cal-Western, which was executed under penalty of

perjury, was posted on February 19. Victa Decl., Ex. 4 (Certificate of Posting). Defendants also

claim that Cal-Western’s records reflect that the Notice of Trustee’s Sale was mailed to Plaintiff

on February 19, 2010. Id., Ex. 3 (Affidavit of Mailing Notice of Trustee’s Sale). 

II. LEGAL STANDARD

“A plaintiff seeking a preliminary injunction must establish 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 Res. Def. Council, Inc., --- U.S. ----, 129 S.Ct. 365, 374, 172 L.Ed.2d 249 (2008). The

Ninth Circuit, following the Supreme Court’s holding in Winter, has since held that, “[t]o the

extent that our cases have suggested a lesser standard, they are no longer controlling, or even

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Case Number CV10-01073 JF (HRL)

ORDER DENYING PRELIMINARY INJUNCTION 

(JFLC1)

viable.” Stormans, Inc. v Selecky, 586 F.3d 1109, 1127 (9th Cir. 2009), quoting Am. Trucking

Ass'ns, Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir.2009) (footnote omitted). 

III. DISCUSSION

The disposition of the instant motion turns on an assessment of Plaintiff’s likelihood of

success on the merits. Stormans, Inc., 586 F.3d at 1127. Plaintiff bases her argument on errors

allegedly committed by Defendants during the foreclosure process. Memorandum in Support of

Ex Parte Application at 3 (stating “[w]e will leave the litany of errors in loan servicing to the first

amended complaint that has been filed by Plaintiff. Instead, the focus of this ex parte application

is on the errors in the foreclosure process. Errors which must prohibit a Trustee’s Sale until the

issues raised by Plaintiff can be heard and adjudicated.”) However, Plaintiff’s argument is not

supported by the record. 

A. Foreclosure process related claims

1. Possession of the Note

Plaintiff first contends that Defendants, in general, cannot “enforce the instrument as a

person not in possession of the instrument, [the note], pursuant to UCC § 3-309 or UCC § 3-

418(d).” P. Mot. at 4. However, it is well established that under California law, possession of the

original note is not a prerequisite to foreclosure. Nool v. HomeQ Servicing, 653 F.Supp.2d 1047,

1053 (E.D. Cal. 2009). “Non-judicial foreclosure under deeds of trust is governed by California

Civil Code section 2924, et seq. Section 2924(a)(1) provides that a trustee, mortgagee or

beneficiary or any of their authorized agents may conduct the foreclosure process. California

courts have held that the Civil Code Provisions cover every aspect of the foreclosure process, and

are intended to be exhaustive. Id. (citations and quotation marks omitted). “There is no

requirement that the party initiating foreclosure be in possession of the original note.” Id., citing

Candelo v. NDex West, LLC, No. CV F 08-1916 LJO DLB, 2008 WL 5382259, at *4 (E.D.Cal.

Dec. 23, 2008); see also Putkkuri v. ReconTrust Co., No. 08cv1919 WQH (AJB), 2009 WL

32567, at *2 (S.D. Cal. Jan. 5, 2009) (stating that “[p]ursuant to section 2924(a)(1) of the

California Civil Code, the trustee of a Deed of Trust has the right to initiate the foreclosure

process. Cal. Civ.Code § 2924(a). Production of the original note is not required to proceed with

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 The November 19, 2008 letter also contains initials. Plaintiff contends that the initials 5

are those of a Wachovia employee, reflecting Defendants acceptance of the terms of the letter. 

However, the “initials” are indecipherable, and there is no indication as to when or by whom the

initials were affixed. Moreover, if the Court were to accept Plaintiff’s assertion that the initials

are those of a Wachovia employee, it is entirely unclear what the initials were intended to

represent – they could have confirmed mere receipt of the letter as distinguished from acceptance

of its terms. 

7

Case Number CV10-01073 JF (HRL)

ORDER DENYING PRELIMINARY INJUNCTION 

(JFLC1)

a non-judicial foreclosure.”). Moreover, Defendants have demonstrated that the Loan was not

transferred, and that WSB simply changed its name to Wachovia. RJN Ex. 1. 

2. Whether the note is in default

Plaintiff next argues that foreclosure would be unlawful because the Note is not in

default. However, the evidence on the record suggests otherwise. In April 2008, a Notice of

Default was recorded against the Property by Golden West Savings Association Service

Company (“GWS”). Ransom Decl., Ex. 11 (“Notice of Default”). On November 4, 2008, GWS

recorded a Notice of Trustee’s Sale. Id. Ex. 12 (“First Notice of Trustee’s Sale”). The first

Notice of Trustee’s Sale reflects a total debt owing of approximately $1.85 million. Id. ¶ 2. 

Plaintiff contends that her payment of $80,000 to Wachovia formally reinstated the loan. 

She points to the letter signed by herself and her husband, Timothy Gens, stating “[i]n exchange

for the presentation of the $80,000 in certified funds, the default/foreclosure is to be fully

cured/reinstated and the loan will be modified. Wachovia will stop the trustee’s sale on the

identified property currently scheduled for Friday November 21, 2008 in San Jose. If this is not

our agreement, please let us know before cashing these funds.” Plaintiff Ex. C. However, 5

Plaintiff offers no evidence that this letter actually was transmitted or received, such as a fax time

stamp or certificate of delivery. 

Moreover, on the same day, Plaintiff signed and faxed to Wachovia the Forbearance Plan

Agreement (“the Agreement”). Ransom Decl. Ex. 12. That Agreement states explicitly that:

In exchange for receipt of this signed agreement and your non-refundable payment

of $80,000.00 in certified funds (cashier’s check, money order or wire transfer) on

or before 11/19/2008, Wachovia Mortgage will agree to forbear foreclosure

activities on loan 0044602498 until 12/19/2008. For the duration of this

agreement, the loan may remain in foreclosure status...If, after receipt of this

signed agreement and the $80,000 payment, the above reference loan is not

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 In addition, it is significant for purposes of equitable relief that Plaintiff has refused to 6

make her monthly mortgage payments on the loan since making the partial payment of $80,000

in November 2008.

8

Case Number CV10-01073 JF (HRL)

ORDER DENYING PRELIMINARY INJUNCTION 

(JFLC1)

brought current or paid in full on or before 12/19/2008, Wachovia Mortgage will

pursue or continue the remedies available to it as stated in your Note and Security

Instrument. 

Id., Ex. 13 (emphasis added). 

This signed and dated Agreement makes clear that the $80,000 payment functioned only

to postpone the trustee’s sale to December 19, 2008 and that Wachovia would resume

foreclosure proceedings if the loan was not brought current after the $80,000 payment was made. 

Id. Plaintiff offers no evidence that she made any payments on the loan after November 2008

and indeed she concedes that she stopped making payments at that point. Defendants assert that

at the time Plaintiff made the $80,000 payment, arrearage on the Loan was $130,738.38 – leaving

a remaining arrearage of $50,738.38. Defendants point out that between January 28, 2009 and

November 25, 2009, Wachovia’s parent entity – Wells Fargo Bank, N.A. – voluntarily froze

foreclosure. Random Decl. ¶ 4, see also id. ¶ 5-6, Ex. 2. (Moreover, Defendants assert that

during this time “Wachovia had to advance $6,600 for hazard insurance on April 30, 2009 and

$39,721.82 for property taxes and $7,554 in tax penalties on March 11, 2010...[and that] the

interest in arears owing on the Loan [currently] is $153,937.16.”). 

While accepting payment of an amount in default precludes foreclosure, “if the lien has

not be extinguished and the debt is in default, the lender may institute nonjudicial foreclosure

proceedings.” Nguyen v. Calhoun, 105 Cal.App.4th 428, 440 (Cal.App. 2003). “The

preponderance of authority seems to be to the effect that acceptance of a partial payment after

declaration of acceleration does not preclude the completion of a pending foreclosure.” Bisno v.

Sax, 175 Cal.App.2d 714, 724 (Cal.App. 1960). Here, Plaintiff has failed to show from

admissible evidence that she is likely to succeed in proving that she extinguished the lien when

she made the $80,000 payment. To the contrary, it appears that the Defendants likely will be

able to demonstrate that the payment was only partial and arrearage of approximately $50,000

remained. 

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 Plaintiff mistakenly cites Cal. Civ. Code § 2324f. The Court will proceed on the 7

assumption that Plaintiff intended to cite Section 2924f(b), given that it contains the language

cited in support of Plaintiff’s argument concerning the statement of the unpaid balance. 

 Defendants’ reference to thirty-six months is based upon the date their opposition 8

papers were filed, not the date of this order. 

9

Case Number CV10-01073 JF (HRL)

ORDER DENYING PRELIMINARY INJUNCTION 

(JFLC1)

3. The Unpaid balance on the Notice of Trustee’s Sale is Incorrect

“The notice of sale shall contain a statement of the total amount of the unpaid balance of

the obligation secured by the property to be sold and reasonably estimated costs, expenses,

advances at the time of the initial publication...provided, that the trustee shall incur no liability

for any good faith error in stating the proper amount...” Cal. Civ. Code. § 2924f(b)(1). Plaintiff 7

contends that Defendants failed to comply with this provision by stating an incorrect unpaid

balance and that the foreclosure sale thus must be enjoined. Motion at 8-9 (arguing that the

unpaid balance indicated on the Notice of Trustee’s Sale is $1,987,747.53, when the principal

value of the loan made in November 2006 was $1,620,000 and a difference of $367,747 could

not have incurred in fourteen months). Plaintiff also argues that the amount of the minimum

monthly payments was $6,346.92 and that in October 2009 it rose to $7,438.65. Plaintiff Ex. E. 

Based on this assertion, Plaintiff contends that the maximum amount owed could not be more

than approximately $98,000. 

Defendants first observe that thirty-six months have passed since the origination of the

loan, not fourteen months. Second, Defendants note that the debt recited in the first Notice of 8

Trustee’s sale was $1.85 million and that the $1.95 million debt reported in the second Notice of

Trustee’s sale includes both the monthly charges Plaintiff cites, and fourteen months of arrears,

taxes, insurance, and foreclosure costs. Opp. at 6, citing Ransom Decl. ¶ 5. Defendants also

submit an “Itemized Payoff Demand for this Loan” and identify the advances Wachovia had to

make for hazard insurance ($6,600), property taxes ($39,721.82), and tax penalties ($7,554). 

Ransom Decl. ¶ 5, Ex. 2 (“Itemized Payoff Demand”) (identifying the following itemized

subtotals: Principal Balance ($1,695,643.07); Interest ($153,937.16); Corporate Advance Balance

($44,854.88); Escrow Advance Balance ($17,600.00); Recon/Recording Fee ($63.00); Total

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 Plaintiff does not contest that Defendant Cal-Western mailed her the Notice of 9

Trustee’s Sale on February 19, 2010, by certified mail, in compliance with the Cal. Civ. Code §

2924b(b)(2). Victa Decl., Ex. 3 (Affidavit of Mailing). Nor does she allege that she did not

receive such notice by mail. 

10

Case Number CV10-01073 JF (HRL)

ORDER DENYING PRELIMINARY INJUNCTION 

(JFLC1)

required to pay loan in full ($1,912,098.11); Inspection Fee ($170.00) – Total to pay Loan and

Related Wachovia Mortgage Charges ($1,912,268.11)). Given Defendants’ explanation of the

additional costs and Plaintiff’s failure to account for these charges, the Court concludes that

Plaintiff has not shown that she is likely to succeed on this claim. 

4. Alleged Posting Error

California Civil Code § 2924f(b) requires that “[a] copy of the notice of sale shall also be

posted in a conspicuous place on the property to be sold at least 20 days before the date of the

sale, where possible and where not restricted for any reason.” The parties dispute whether the

Notice of Trustee’s Sale was posted in accordance with Section 2324f(b). Plaintiff submits three

declarations – one by herself, one by her husband, and one by her daughter – asserting that the

Notice was not posted until the morning of February 22 for a sale scheduled on March 11. 

Defendants point to a Certificate of Posting, executed under penalty of perjury, attesting that the

Notice was posted on February 19, which would comply with the twenty-day requirement. Victa

Decl., Ex. 4 (Certificate of Posting). 

9

Even accepting Plaintiff’s claim that the Notice of Default was not posted until February

22, late provision of notice is not sufficient to forestall foreclosure given the other facts in this

case. A technical error is not fatal unless prejudice, which Plaintiff has neither alleged nor

demonstrated is shown. Courts have "rejected claims of deficient notice where no prejudice was

suffered as the result of a procedural irregularity." Reynoso v. Paul Financial, LLC, No. 09-3225

SC, 2009 WL 3833298, at *4 (N.D. Cal. Nov. 16, 2009), quoting Pantoja v. Countrywide Home

Loans, Inc., No. 09- 1615, 2009 WL 2423703, at *6-7 (N.D. Cal. July 9, 2009); see also Lehner

v. United States, 685 F.2d 1187, 1190-91 (9th Cir.1982) (rejecting due process claim based on

failure to provide written notice of foreclosure sale where plaintiff had actual notice); Knapp v.

Doherty, 123 Cal.App.4th 76, 93-94, 20 Cal.Rptr.3d 1 (Ct.App.2004) (rejecting claim based on

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Case Number CV10-01073 JF (HRL)

ORDER DENYING PRELIMINARY INJUNCTION 

(JFLC1)

deviation from foreclosure notice requirement where "[t]here was no prejudicial procedural

irregularity"). Particularly in light of the fact that the sale itself has now been postponed several

times and is now scheduled for May 24, 2010 Plaintiff cannot demonstrate that she suffered

prejudice from Defendants’ alleged error. 

5. A second notice of default is not required

Plaintiff next contends that the Court should grant a preliminary injunction because

Defendants did not provide a second notice of default after the Forbearance Plan Agreement was

signed and Plaintiff made the $80,000 payment. However, in light of the Court’s conclusion that

the Loan was not reinstated in November 2008, a second notice of default is not required. It is

true that a second notice of sale, as distinguished from a second notice of default, is required

when the “sale proceedings are postponed for a period or periods totaling more than 365 days.” 

Cal. Civ. Code. § 2924g(c)(2). Here, it is undisputed that Defendants mailed a Notice of

Trustee’s Sale on February 19 pursuant to Cal Civ. Code § 2924b and that a Notice of Trustee’s

Sale was posted on the front door of the Property pursuant to Cal. Civ. Code § 2924f. Victa

Decl., Ex. 3 (Affidavit of Mailing); Ex. 4 (Certificate of Posting). Accordingly, Plaintiff cannot

show a likelihood of success on this aspect of her claims. 

6. Substitution of Trustee

Plaintiff argues that Defendants failed to comply with Cal Civ. Code § 2934a by not

notifying her of the substitution of trustee. Section 2934a requires that such notice be provided

by certified mail. Defendants have submitted a copy of the Affidavit of Mailing of the recorded

substitution, stating that Adam Spera, “at the request of Cal-Western Reconveyance Corporation

on January 14, 2009, [] deposited in the United States mail a copy of the attached document [the

recorded Substitution of Trustee], in separate sealed envelopes, Certified Mail, postage

prepaid...” Victa Decl., Ex. 2 (Affidavit of Mailing). Accordingly, the evidence in the record

supports a finding that Defendants complied with Section 2934a. 

7. Compliance with Cal. Civ. Code § 2923.53

Plaintiff contends that she is likely to succeed on her claim in light of the fact that

Wachovia is not exempt from Cal. Civ. Code § 2923.53 because it is not a California

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 The Court takes judicial notice of Exhibit 3, “List of Licensees that have received an 10

exemption from Civil Code Section § 2923.52(a),” issued by the California Department of

Corporations, as it is “capable of accurate and ready determination by resort to sources whose

accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). 

 At the hearing on May 7, 2010 Plaintiff informed the Court that she believed she 11

should not have to make any payment in return for a release from the loan on her home. 

 However, Defendants’ argument that each of Plaintiff’s state law claims is time-barred 12

does not appear to be sound. While Defendants assert that the statute of limitations for fraud or

mistake is three years, they also concede that the California Civil Code articulates a “four year

12

Case Number CV10-01073 JF (HRL)

ORDER DENYING PRELIMINARY INJUNCTION 

(JFLC1)

corporation. Cal. Civ. Code § 2923.53 (governing loan modification programs and exemption

from notice of sale provisions). However, Defendants submit a “List of Licensees that have

received an exemption from Civil Code Section § 2923.52(a)” issued by the California

Department of Corporations that identifies Wachovia as an exempt entity. RJN, Ex. 3. 

10

Accordingly, Plaintiff has failed to demonstrate a likelihood of prevailing as to this issue. 

8. Tender

 “Under California law, a defaulted borrower ‘is required to allege tender of the amount

of [the lender's] secured indebtedness in order to maintain any cause of action for irregularity in

the sale procedure.’” Bouyer v. IndyMac Federal Bank, No. C-08-05582 EDL, 2009 WL

1765668, at *2 (N.D. Cal. June 18, 2009, quoting Abdallah v. United Savings Bank, 43

Cal.App.4th 1101, 1109, 51 Cal.Rptr.2d 286 (1996). “An action to set aside a foreclosure sale,

unaccompanied by an offer to redeem, does not state a cause of action which a court of equity

recognizes.” Id., citing Karlsen v. American Sav. & Loan Assn., 15 Cal.App.3d 112, 117-18, 92

Cal.Rptr. 851 (1971). Plaintiff has neither pled nor offered any evidence of a tender to pay her

debt.11

B. Loan origination related claims

Plaintiff does not address the remainder of her alleged claims for relief in her

memorandum in support of injunctive relief. Defendants assert that each of Plaintiff's claims is

time-barred. The Loan was executed in November 2006, while the instant action was not filed

until February 26, 2010. Plaintiff's federal claims thus appear to be time-barred. See Miguel v. 12

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catch all limitations period.” Opp. at 10, citing Cal. Civ. Proc. Code § 343. In addition, the

statute of limitations for many of Plaintiff’s other state law claims is four years. See Cal. Civ.

Proc. Code § 337 (breach of contract limitations period is four years); Cal. Civ. Proc. Code § 343

(breach of fiduciary duty is four years); Osei v. Countrywide Home Loans, No. CIV. S-09-1981

LKK/JFM, — F.Supp.2d—, 2010 WL 727831, at *12 (E.D. Cal. Mar. 3, 2010), citing Love v.

Fire Insurance Exchange, 221 Cal.App.3d 1136, 1144, 271 Cal.Rptr. 246 (1990) (holding that

[a] claim for the covenant of good faith and fair dealing has a...statute of limitations [of] four

years if it sounds in contract.); Cal. Bus & Prof. Code § 17208 (A claim for relief brought

pursuant to the UCL must be "commenced within four years after the cause of action accrued.").

Plaintiff filed the instant action within four years of the time the Loan was executed. 

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ORDER DENYING PRELIMINARY INJUNCTION 

(JFLC1)

Country Funding Corp., 309 F.3d 1161, 1164 (9th Cir. 2002) (the Ninth Circuit has recognized

that "§ 1635 is a statute of repose, depriving the courts of subject matter jurisdiction when a §

1635 claim is brought outside the three year limitation period."); Vrabel v. JP Morgan Chase

Bank, N.A. No. C-C-09-1278 MMC, 2009 WL 2421856, at *1 (N.D. Cal. Aug. 6, 2009)

(applying "the longest statute of limitations available under RESPA," the three-year statute of

limitations, Plaintiff's RESPA disclosure claims are time-barred.); 15 U.S.C. § 1640(e)

(providing that the limitations period is one year for damages claims under TILA). Moreover,

only the TILA rescission action, for which the limitations period cannot be tolled as it is a statute

of repose, could provide Plaintiff with the remedy she seeks - an injunction prohibiting

foreclosure on the Property. 

IV. ORDER

Plaintiff's motion for a preliminary injunction is DENIED.

IT IS SO ORDERED.

DATED: May 12, 2010

 

JEREMY FOGEL

United States District Judge

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Case Number CV10-01073 JF (HRL)

ORDER DENYING PRELIMINARY INJUNCTION 

(JFLC1)

A copy of this order has been served upon the following persons:

Laura Gens

4141 Old Trace Road

Palo Alto, CA 94306

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