Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-00439/USCOURTS-casd-3_11-cv-00439-0/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 15:1601 Truth in Lending

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

DANIEL FABITO, et al.,

Plaintiff,

CASE NO. 11CV439 DMS (POR)

ORDER DENYING PLAINTIFFS’

MOTION FOR PRELIMINARY

INJUNCTIVE RELIEF

vs.

WACHOVIA MORTGAGE, INC., et al.,

Defendant.

This case comes before the Court on Plaintiffs’ motion for a temporary restraining order

(“TRO”) and preliminary injunction preventing Defendants from proceeding with a non-judicial

foreclosure sale or otherwise transferring ownership of the subject property. For the reasons set forth

below, Plaintiffs’ motion is denied without prejudice.

I.

BACKGROUND

This case involves the refinancing of a loan obtained by Plaintiffs from World Savings Bank

on or around January 31, 2007, which is secured by a Deed of Trust on their property. (Complaint ¶

15.) Subsequent to the refinancing, Plaintiffs fell behind on payments on their loan. (Id. at ¶ 47.) A

foreclosure sale of the property was scheduled for February 16, 2011, but has apparently been

rescheduled to a later date. (Opp. to Motion at 1.) The Complaint sets forth fifteen claims for relief:

(1) injunctive relief, (2) breach of fiduciary duty, (3) violations of the Truth in Lending Act, (4) fraud,

(5) violation of California Business and Professions Code § 17200, (6) violation of the Real Estate

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Settlement Procedures Act, (7) violation of the Racketeer Influenced and Corrupt Organizations Act,

(8) breach of contract, (9) breach of the implied covenant of good faith and fair dealing, (10)

accounting, (11) rescission, (12) reformation, (13) predatory lending practices, (14) unfair debt

collection practices, and (15) declaratory relief. 

Defendant Wachovia Mortgage, a division of Wells Fargo Bank, N.A., successor by merger

of Wachovia Mortgage, FSB, formerly known as World Savings Bank, FSB (“Wachovia”), removed

this action from California State Court on March 2, 2011. (Docs. 1, 3.) While the action was still

pending in State Court, Plaintiffs filed an ex parte application for an order to show cause and a TRO

enjoining Defendants from selling Plaintiff’s property at a trustee’s sale scheduled for February 16,

2011. On March 4, 2011, the Court issued an Order requiring Defendants to respond to Plaintiffs’

application for a TRO and preliminary injunction and requiring the parties to show cause why this case

should not be transferred to the District Court for the Northern District of California. (Doc. 5.)

II.

LEGAL STANDARD

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, 129

S. Ct. 365, 376 (2008). The standard for issuing a temporary restraining order is identical to the

standard for issuing a preliminary injunction. Lockheed Missile & Space Co., Inc. v. Hughes Aircraft

Co., 887 F. Supp. 1320, 1323 (N.D. Cal. 1995). A party seeking injunctive relief under Federal Rule

of Civil Procedure 65 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.” Am. Trucking Ass'ns v. City of Los Angeles, 559 F.3d

1046, 1052 (9th Cir. 2009)(quoting Winter, 129 S. Ct. at 374). With respect to the showing a plaintiff

must make regarding his chances of success on the merits, the Ninth Circuit applies a sliding scale

approach. See Alliance for Wild Rockies v. Cottrell, 622 F.3d 1045, 1049 (9th Cir. 2010). Under the

sliding scale approach, the elements of the preliminary injunction test are balanced and, where a

plaintiff can make a stronger showing of one element, it may offset a weaker showing of another. Id.

“Therefore, ‘serious questions going to the merits’ and a hardship balance that tips sharply towards

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the plaintiff can support issuance of an injunction, so long as the plaintiff also shows a likelihood of

irreparable injury and that the injunction is in the public interest.” Id. at 1053. 

III.

DISCUSSION

The primary basis for Plaintiffs’ motion is that they were improperly denied a loan

modification by Defendants and they are entitled to be considered for such a loan modification

pursuant to (1) the Agreement and Stipulation of Settlement of Class Action and the Court’s Order

provisionally certifying a settlement class and preliminarily approving a class action settlement in In

re: Wachovia Corp. “Pick-A-Payment” Mortgage Marketing & Sales Practices Litigation,

M:09cv2015-JF (N.D. Cal.) and (2) the Assurance entered into by the Attorney General of California

and Wells Fargo Bank, N.A. in December 2010. Plaintiffs seek to have the Court force Defendants

to comply with their duties under these agreements and to consider Plaintiffs’ loan for the appropriate

loan modification program. 

Plaintiffs are required to show a likelihood of success on the merits of their claims in order for

preliminary injunctive relief to issue. Plaintiffs point to the preliminary class action settlement and

the Assurance as the basis for their motion for preliminary injunctive relief. As Defendants point out,

the Assurance does not appear to create a private right of action for Plaintiffs and Plaintiffs have not

shown they are individually entitled to enforce the provisions of the agreement. (Assurance at 8-9

(“However, (i) nothing in this Assurance shall be construed as authorizing any person or entity other

than the Office of the Attorney General to enforce or seek remedies under this Assurance or as a result

of this Assurance or a breach thereof . . . .”), 25-26 (“This Assurance is not intended to create a private

right of action on the part of any person or entity other than the parties hereto.”).) As to the

preliminary class action settlement, other than to claim that they may be entitled to

benefits–specifically, to have their loan considered for a loan modification–upon the certification of

a class and the final approval of the class action settlement in that action, Plaintiffs have not shown

they are likely to succeed on the merits of their claims asserted in the Complaint. To the extent

Plaintiffs intend to pursue any rights to which theymay be entitled pursuant to a final settlement in the

pending class action, the Court believes the instant action should appropriately be before the District

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Wachovia filed a response indicating it has no position concerning the transfer of the 1

instant action, but noting that, should Plaintiffs opt out of the class, then any claims asserted in the

instant action would remain and the Southern District is likely the most convenient forum and, should

Plaintiffs elect not to opt out of the class and should resolution be reached in the class action, then the

majority, if not all, of the claims asserted in the instant Complaint would become moot. (Doc. 10.)

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Court for the Northern District of California. In its March 4 Order, the Court ordered the parties to

show cause why this case should not be transferred to the Northern District, which Plaintiffs failed to

do, nor did they file a reply to Defendants’ Opposition to their motion for preliminary injunctive

relief. To the extent Plaintiffs are not members of the putative class in that action or intend to opt out 1

of such class and proceed with the instant action, preliminary injunctive relief may only be granted

upon a showing of a likelihood of success on the merits of their claims asserted in the Complaint,

which Plaintiffs have failed to do here. As Plaintiffs have failed to show a likelihood of success on

the merits of their claims, the Court need not look to the remaining elements. Accordingly, Plaintiffs’

motion for preliminary injunctive relief is denied.

IV.

CONCLUSION

Forthe foregoing reasons, Plaintiffs’ motion for preliminary injunctive reliefis denied without

prejudice.

IT IS SO ORDERED.

DATED: March 22, 2011

HON. DANA M. SABRAW

United States District Judge

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