Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_10-cv-02439/USCOURTS-cand-3_10-cv-02439-2/pdf.json

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

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*E-Filed 07/09/2010* 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

JASON RIVERA, an individual; and 

MIKALA RIVERA, an individual, 

 Plaintiffs, 

 v. 

BAC HOME LOANS SERVICING, L.P., et 

al., 

 Defendants. 

____________________________________/

CASE NO. C 10-02439 RS

ORDER DENYING PRELIMINARY 

INJUNCTION 

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I. INTRODUCTION 

Plaintiffs Jason and Mikala Rivera filed their Complaint on June 2, 2010 alleging thirteen 

causes of action, including violations of the Real Estate Settlement Procedures Act, 12 U.S.C. § 

2605 et seq (“RESPA”), the Truth in Lending Act, 15 U.S.C. § 1601 et seq (“TILA”) and its 

implementing regulations, 12 C.F.R. § 226 et seq (“Regulation Z”), and a number of state law 

claims. On June 4, 2010, plaintiffs filed an emergency motion for a temporary restraining order 

(“TRO”) enjoining defendants ReconTrust Company, N.A. (“ReconsTrust”) and BAC Home Loans 

Servicing, LP (“BAC”) from conducting a trustee’s sale of plaintiff’s property at 153 Smith Street, 

Alamo, California, 94507 (the “Property”). Plaintiffs represented that the trustee’s sale was 

scheduled to take place on June 9, 2010 at 11:00 a.m. This Court issued the TRO along with an 

order to show cause why a preliminary injunction should not be granted. That motion came on for 

hearing on June 17, 2010. 

II. BACKGROUND 

The Riveras explain that, on August 18, 2006, they purchased the Property after negotiating 

a mortgage and home equity line of credit (“HELOC”) with defendant Countrywide Bank, N.A. 

(“Countrywide Bank”), whose successor in interest is defendant Bank of America, N.A. (“BofA”). 

The mortgage and HELOC (together, the “Home Loans”), which were secured by a deed of trust 

(“Deed of Trust”), were brokered by Countrywide Home Loans, Inc. (“CHL”), which was 

subsequently assigned by Countrywide Bank to BofA. ReconTrust was the initial trustee on the 

Deed of Trust. The promissory note executed pursuant to the Home Loans, as well as the Deed of 

Trust, was serviced by defendants Aqura Loan Services, Merscorp, Inc., and BAC. 

According to the complaint, during the application process, CHL misrepresented the 

Riveras’ income and provided falsified income documentation to Countrywide Bank in order to 

secure a mortgage and HELOC for which the plaintiffs would not have otherwise qualified. The 

complaint also alleges that Countrywide Bank failed to provide a number of material disclosures 

regarding, among others, the applicable interest rate, closing costs, and right to cancel under the 

Home Loans. 

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The Riveras aver that, as a result of these misrepresentations and omissions, they agreed to 

accept loans that they could not afford, and eventually fell behind on their payments. Accordingly, 

ReconTrust recorded a notice of default on May 2, 2008, and, because plaintiffs were unable to cure 

the default, ReconTrust eventually recorded a notice of sale on August 3, 2008, with a sale date of 

June 9, 2010. On July 29, 2009, the Riveras advised Countrywide Bank, CHL and ReconTrust of 

their intention to rescind the Home Loans. 

Based on these allegations, plaintiffs assert causes of action for violations of TILA, 

California’s Rosenthal Fair Debt Collectors Practice Act (the “Rosenthal Act”), RESPA, the 

California Business and Professions Code section 17200 et. seq., intentional misrepresentation, 

breach of fiduciary duty, breach of contract, breach of implied covenant of good faith and fair 

dealing, predatory lending, negligence, usury, accounting and quiet title. On June 7, 2010, the Court 

issued a TRO temporarily enjoining the June 9, 2010 sale of the Property and ordered the defendants 

to show cause why a preliminary injunction should not be granted. Defendants responded to that 

order to show cause on June 15, 2010. 

III. LEGAL STANDARD 

 Injunctive relief is an “extraordinary remedy” and may only be awarded in response to a firm 

demonstration that the plaintiff is entitled to such relief. Winter v. Natural Res. Defense Council, 

129 S. Ct. 365, 376 (2008); Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 (1982). “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.” Am. Trucking Ass’ns, Inc. v. City of Los 

Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009) (quoting Winter, 129 S. Ct. at 374). 

At oral argument, plaintiffs’ counsel represented that the appropriate standard for a 

preliminary injunction is a “sliding scale,” which balances the likelihood of success on the merits 

against the relative hardship to the parties. In other words, according to plaintiffs, a preliminary 

injunction is warranted even where there is no likelihood of success on the merits, provided that the 

moving party can establish irreparable harm. This is not a correct characterization of the law. 

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Indeed, the Supreme Court in Winter rejected just such a “sliding scale” approach to the preliminary 

injunction standard. In so doing, Court reversed the Ninth Circuit’s adoption of a balancing 

approach where “the required showing of irreparable harm varies inversely with the probability of 

success,” LGS Architects, Inc. v. Concordia Homes, 424 F.3d 1150, 1155 (9th Cir. 2005), and flatly 

rejected at least one half of the conceptual continuum, insisting instead that a plaintiff must always

show a likelihood of irreparable harm. Winter, 129 S. Ct. at 374. Indeed, the Ninth Circuit has 

since acknowledged that Winter rejected its earlier preliminary injunction standard as “too lenient.” 

See American Trucking Association v. City of Los Angeles 559 F.3d 1046, 1052 (9th Cir. 2009). In 

American Trucking, the Court went on to recite Winter’s standard and insisted that, “[t]o the extent 

that our cases have suggested a lesser standard, they are no longer controlling, or even viable.” Id. 

Here, plaintiffs have failed to show a substantial likelihood of success on the merits as to any of the 

thirteen claims for relief. 

IV. DISCUSSION 

A. TILA

 Plaintiffs contend that they are entitled to rescind the Home Loans under TILA, which grants 

borrowers the right to rescind within three days after executing a consumer credit transaction. 15 

U.S.C. § 1635(a). Section 1635(f) imposes a three year time limit for rescission where a creditor 

fails to disclose that right to rescind. 15 U.S.C § 1635(f); 12 C.F.R. § 226.23(a)(3). Here, plaintiffs 

purchased the property on August 18, 2006, but did not bring these TILA claims until June 2010, 

nearly four years later. Although TILA does recognize the principal of equitable tolling under 

certain circumstances, that principal will not save the Riveras’ TILA claim as the Ninth Circuit has 

observed: “Congress placed a three year absolute limit on rescission actions, demonstrating its 

willingness to put a limit on the scope of some types of TILA actions.” King v. California, 784 F.2d 

910, 914 (9th Cir. 1986). “At least in the rescission context,” the Circuit reasoned, “Congress did 

not intend to prolong the limitations period.” Id. Additionally, whether or not a statute of 

limitations should be equitably tolled is a factual determination that “focuses on whether there was 

excusable delay by the plaintiff and may be applied if, despite all due diligence, a plaintiff is unable 

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to obtain vital information bearing on the existence of his claim.” Huseman v. Icicle Seafoods, Inc.,

471 F.3d 1116, 1120 (9th Cir.2006) (quotations and citations omitted) (emphasis in original). Even 

if plaintiffs were legally entitled to equitable tolling of their claims, they have not alleged any facts 

in the Complaint that would warrant tolling the statute of limitations here. 

Moreover, the right to rescind does not apply to residential mortgage transactions. 15 U.S.C. 

§ 1635(e); 12 C.F.R. § 226.23(f). A “residential mortgage transaction” consists of “a transaction in 

which a mortgage, deed of trust... or equivalent consensual security interest is created or retained 

against the consumer’s dwelling to finance the acquisition... of such dwelling.” 15 U.S.C. § 

1602(w); 12 C.F.R. § 226.2(a)(24). Plaintiffs rely upon Semar v. Platte Valley Fed. Sav. & Loan 

Assoc. for the proposition that borrowers have three days to rescind consumer credit transactions 

where the borrower’s principal dwelling is the security interest. 791 F.2d 699, 701 (9th Cir. 1986). 

That case is distinguishable from the facts here, though, because it involved homeowners who took 

out a long-term loan to pay off a one-year second trust deed loan on their house. Id. Here, there is 

no allegation that either the HELOC or the mortgage was a consumer credit transaction executed for 

any purpose other than for acquiring the Property. Indeed, both the Complaint and the 

Memorandum in Support of Ex Parte Application maintain that the Riveras executed the mortgage 

and HELOC at the same time precisely in order to purchase the Property. Compl. at ¶¶ 12, 16; Doc. 

No. 8 at 1. In other words, the mortgage and the HELOC, together constituting the Home Loans, 

are residential mortgage transactions exempt from the right to rescind, and plaintiffs’ TILA claims 

therefore cannot halt foreclosure. 

B. California Rosenthal Act

 California’s Rosenthal Fair Debt Collectors Practice Act prohibits “debt collectors from 

engaging in unfair or deceptive acts or practices in the collection of consumer debts.” Cal. Civ. 

Code § 1788.1(b). Under the statute, a “debt collector” is “any person who, in the ordinary course 

of business, regularly, on behalf of himself or herself or others, engages in debt collection.” Cal. 

Civ. Code § 1788.2(c). Denial of a restraining order is appropriate when a plaintiff fails to allege 

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that a defendant is a debt collector as defined under the statute. See Ines v. Countrywide Home 

Loans, Inc., No. 08cvl267 WQH (NLS), 2008 WL 2795875, *2 (S.D. Cal. Jul 18, 2008); Izenberg v. 

ETS Servs., 589 F. Supp. 2d 1193, 1199 (C.D. Cal. 2008) (“[t]he [Rosenthal Act] applies only to 

debt collectors”). Moreover, courts have regularly held that mortgage servicing companies and 

mortgage lenders are not debt collectors under the statute. See Caballer v. Ocwen Loan Serv., 2009 

WL 1528128, *1 (N.D. Cal. 2008) (“creditors, mortgagors and mortgage service companies are not 

‘debt collectors’ and are exempt from liability”); Ines, 2008 WL 2795875, *3. 

 Here, although the Complaint states that “Plaintiffs allege that Defendants are debt 

collectors,” none of the evidence submitted suggests that this is the case. Indeed, other than this 

single reference to the defendants as “debt collectors,” elsewhere in the Complaint plaintiffs refer to 

Countrywide Bank as the “loan originator,” CHL as the “loan broker,” ReconTrust as the “trustee” 

and BAC as the servicer of the promissory notes and Deed of Trust. Compl. at ¶¶ 14, 34, 38. 

Moreover, nowhere in the Complaint or in plaintiffs’ Memorandum in Support of Ex Parte 

Application is there an allegation that the defendants engaged in any debt collection activity other 

than the foreclosure of the Property, which is not a debt collector’s act under California Civil Code 

section 1788.2(c). See Izenberg, 589 F. Supp. 2d at 1199 (“foreclosure does not constitute debt 

collection under the [Rosenthal Act]”). Because the defendants are not “debt collectors” under 

California law, plaintiffs’ Rosenthal Act claim lacks a substantial likelihood of success. 

Accordingly, the Riveras’ request for preliminary injunctive relief is simply not viable under their 

second claim for relief. 

C. RESPA

Plaintiffs’ third claim for relief alleges a violation of 12 U.S.C. sections 2605(e) and 2608. 

RESPA claims under sections 2608 and 2605 are subject to a one-year statute of limitations and a 

three-year statute of repose, respectively. 12 U.S.C. § 2614. Because more than three years passed 

between the execution of the loans and the filing date, and because plaintiffs have not alleged any 

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facts in the Complaint that would warrant tolling the statute of limitations, plaintiffs’ claims for 

damages under RESPA are time barred.1 See Huseman, 471 F.3d at 1120. 

Moreover, both 12 U.S.C. section 2506 and 2608 outline the remedies available to a private 

citizen. Section 2605 provides that individuals damaged by a RESPA violation are entitled to 

receive actual damages, as well as any additional damages the court may allow “in the case of a 

pattern or practice of noncompliance with the requirements of this section, in an amount not to 

exceed $1,000.” 12 U.S.C. § 2605(f)(1)(A) & (B). Section 2605 also allows prevailing plaintiffs to 

recover attorney’s fees and costs. 12 U.S.C. §§ 2605(f)(3). Similarly, section 2608 provides for 

damages “equal to three times all charges made for such title insurance.” 12 U.S.C. § 2608(b). 

None of these remedies, however, would permit a permanent injunction against foreclosure. 

The standard for a preliminary injunction is functionally the same as for a permanent 

injunction; the only difference is that the plaintiff must show a likelihood of success, as opposed to 

actual success, on the merits. It follows, therefore, that a party may not obtain preliminary

injunctive relief where he or she could not obtain permanent injunctive relief. Amoco Prod. Co. v. 

Village of Gambell, 480 U.S. 531, 546 n.12 (1987); see also, Chung v. NBGI, Inc., No. 09-04878, 

2010 WL 841297 at *3 (N.D. Cal. Mar. 10, 2010) (“the question before the Court is not whether 

plaintiff is likely to succeed in proving that defendants violated these statutes, but whether she is 

likely to succeed on her claim for injunctive relief as a remedy for any such violation”). In this 

instance, even if plaintiffs had included facts which suggest that their RESPA claims were timely 

(which they have not), the proper remedy would be drawn from statutory damages, fees and costs. 

Plaintiffs, therefore, have failed to show substantial likelihood of a successful permanent injunction 

on the merits, so their RESPA claims cannot stop foreclosure.2

 

1

 The Complaint alleges that the defendants failed to provide a proper written explanation or 

response to plaintiffs’ “Qualified Written Request.” Compl. at ¶ 62. However, it makes no 

averments as to when that Qualified Written Request was sent, nor is a copy of the Qualified 

Written Request attached to the Complaint or included with any of the other filings. 

2

 A similar issue arises as to the claims for relief for violation of the Rosenthal Act, California 

Business and Professions Code section 17200 et. seq, breach of fiduciary duty, breach of contract, 

breach of implied covenant of good faith and fair dealing, predatory lending, negligence, usury, 

accounting and quiet title, for which it is unclear whether a proper remedy would permit plaintiffs’ 

to stop foreclosure. Because other bases exist to deny a preliminary injunction premised on these 

claims for relief, however, the Court does not reach that issue. 

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D. Misrepresentation

 The Riveras’ fourth claim for relief for fraud alleges that the defendants inflated plaintiffs’ 

income on their loan application. Compl. at ¶ 69. Under California Code of Civil Procedure section 

338(d), “[a]n action for relief on the ground of fraud or mistake” must be brought within three years 

after the party discovers the fraud. Cal. Civ. Proc. Code § 338. Additionally, a party alleging fraud 

has a duty to exercise diligence in discovering the fraud, such that the three years begins to run 

when that party “has the opportunity to obtain knowledge from sources open to his investigation.” 

Lee v. Escrow Consultants, Inc., 210 Cal. App. 3d 915, 921 (1989). 

 Here, the Riveras signed the loan documents on August 18, 2006, but did not file suit until 

June 2, 2010, almost four years later. There were no averments made, or evidence presented in the 

filings or at the oral argument, suggesting that plaintiffs lacked access to the loan documents for 

those four years. Certainly, then, the plaintiffs had “the opportunity to obtain knowledge from 

sources open to [their] investigation.” In other words, the Riveras’ claim for fraud is time-barred, 

and is therefore not substantially likely to succeed on its merits. 

E. Breach of Fiduciary Duty and Negligence

 The Riveras’ fifth and tenth claims for relief for breach of fiduciary duty and negligence, 

respectively, are based on the proposition that the defendants “owed a fiduciary duty to the 

Plaintiffs’ to act primarily for their benefit, to act with proper skill and diligence, and not to make a 

personal profit from the agency at the expense of their principal, the Plaintiffs.” Compl. at ¶ 79. It 

is settled California law, however, that “[t]he relationship between a lending institution and its 

borrower-client is not fiduciary in nature.” Nymark v. Heart Fed. Savings and Loan Ass’n, 231 Cal. 

App. 3d 1089, 1093, fn. 1 (1991); see also, Oaks Management Corp. v. Superior Court, 145 Cal. 

App. 4th 453, 466 (2006) (“a loan transaction is at arms-length and there is no fiduciary relationship 

between the borrower and lender”). Moreover, California courts have routinely found that, under a 

standard borrower/lender relationship, a lender has no duty to disclose to a borrower what the 

borrower may or may not be able to afford. See Wagner v. Benson, 101 Cal. App. 3d 27, 34-35 

(1980). 

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 Here, plaintiffs have made no averments, nor provided any evidence, to suggest that the 

relationship between the defendants and the Riveras is anything more than a routine relationship 

between a lender and borrower. The only agreements alleged in the Complaint are the Home Loans 

themselves; there are no averments that these agreements created anything more than an obligation 

by CHL to fund a loan, and an obligation by the Riveras to repay that loan. Therefore, by failing to 

establish a fiduciary duty owed by defendants, plaintiffs have not met their burden as to likelihood 

of success on the merits on a claim for relief based upon breach of a fiduciary duty or negligence. 

F. Breach of Contract and Breach of Implied Covenant of Good Faith and Fair Dealing

 Plaintiffs’ claims for relief allege breach of contract (sixth) and breach of the implied 

covenant of good faith and fair dealing (seventh). Compl. at ¶¶ 84-97. Under California law, the 

elements of breach of contract claim are: “(1) the contract, (2) plaintiff's performance or excuse for 

nonperformance, (3) defendant's breach, and (4) damage to plaintiff therefrom.” Wall Street 

Network, Ltd. v. New York Times Co., 164 Cal. App. 4th 1171, 1179 (2008) (citations omitted). 

Similarly, the implied covenant of good faith is generally grounded in contract, not in tort law. 

Section 205 of the Restatement of Contracts states that, “[e]very contract imposes upon each party a 

duty of good faith and fair dealing in its performance and its enforcement.” Restatement (Second) 

of Contracts § 205 (2009). Indeed, the implied covenant of good faith is intended to ensure 

compliance with the agreed terms of a contract. See April Enterprises, Inc. v. KTTV, 147 Cal. App. 

3d 805, 816 (1983) (“it is implied in law that a party to a contract will not do anything which would 

deprive the other party of the benefits of the contract”). 

 The basis for plaintiffs’ contract claims is that the defendants “promised to provide Plaintiffs 

with an affordable loan.” Compl. at ¶ 85. Nothing in the Complaint, or in any of the evidence 

presented to the Court, however, suggests that such an agreement existed. Again, the only contracts 

in evidence are the Home Loan documents, which simply create a lender/borrower relationship but 

do not, at least as alleged in the Complaint, require the defendants to provide the Riveras with an 

affordable loan. See, e.g., Nymark, 231 Cal. App. 3d at 1093, fn. 1; Wagner, 101 Cal. App. 3d at 

34-35; Oaks Management Corp., 145 Cal. App. 4th at 466 (a lender has no duty to disclose to a 

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borrower what the borrower may or may not be able to afford). Absent any applicable contractual 

relationship, then, plaintiffs cannot meet their burden of establishing a substantial likelihood of 

success on the merits as to a breach of contract or breach of covenant of good faith claim. 

G. Predatory Lending

 The eighth claim for relief is for predatory lending in violation of California Financial Code 

section 4970 et. seq. Section 4970 only applies, however, when the loan is a “covered loan” as 

defined in the statute. Wolski v. Fremont Investment & Loan, 127 Cal. App. 4th 347, 351 (2005). 

Whether or not a loan is covered depends on the size of the loan and “[t]he total points and fees 

payable by the consumer.” Cal. Fin. Code § 4970(b). Because plaintiffs fail to make any averments 

as to the specific terms of the loan, they cannot establish that it is a covered loan. Therefore, they 

fall short of establishing a likelihood of success on the merits as to this claim for relief. 

H. UCL

The Riveras aver in their ninth claim for relief that defendants engaged in unfair or 

unlawful business practices in violation of California’s Unfair Competition Law (“UCL”). 

Cal. Bus. & Prof. Code § 17200 (prohibiting “unlawful, unfair or fraudulent” business 

practices). They argue broadly that the defendants’ acts constitute unfair or unlawful 

business practices “within the meaning” of the Code but do not actually differentiate 

between the defendants or pin their allegations to a particular prong of the UCL’s prohibition 

against “unfair, unlawful or fraudulent” business practices. 

Under the “unlawful” prong, the UCL incorporates other laws and treats violations of 

those laws as unlawful business practices independently actionable under state law. 

Chabner v. United Omaha Life Ins. Co., 225 F.3d 1042, 1048 (9th Cir. 2000). Violation of 

almost any federal, state, or local law may serve as the basis for a UCL claim. Saunders v. 

Superior Ct., 27 Cal. App. 4th 832, 838-39 (1994). Where a plaintiff cannot state a claim 

under the “borrowed” law, however, he or she cannot state a UCL claim either. See, e.g., 

Ingels v. Westwood One Broadcasting Servs., Inc., 129 Cal. App. 4th 1050, 1060 (Cal. Ct. 

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App. 2005) (“[a] defendant cannot be liable under [section] 17200 for committing unlawful 

business practices without having violated another law”) (citation omitted). 

Under a “fraud” theory, a plaintiff must show that “members of the public are likely 

to be ‘deceived’” by the defendant’s practices. In re Tobacco II Cases, 46 Cal. 4th 298, 312 

(2009) (citing Kasky v. Nike, Inc., 27 Cal.4th 939, 951 (2002)). Where a plaintiff alleges that 

the defendant failed to disclose material facts, he or she must first establish that the 

defendant had a duty to disclose those facts. See Berryman v. Merit Prop. Mgmt., Inc., 152 

Cal. App. 4th 1544, 1557 (2007) (“Absent a duty to disclose, the failure to do so does not 

support a claim under the fraudulent prong of the UCL.”). 

As to UCL’s “unfair” prong, California courts traditionally have applied a balancing 

test. Under this test, “the determination of whether a particular business practice is unfair 

necessarily involves an examination of its impact on its alleged victim, balanced against the 

reasons, justifications and motives of the alleged wrongdoer.” Motors, Inc. v. Times Mirror 

Co., 102 Cal. App. 3d 735, 740 (1980); see also People v. Casa Blanca Convalescent Homes 

Inc., 159 Cal. App. 3d 509, 530 (1984) (stating that a practice in California is unfair “when it 

offends an established public policy or when the practice is immoral, unethical, oppressive, 

unscrupulous or substantially injurious to consumers.”). In Cel-Tech Communications, Inc. 

v. Los Angeles Cellular Telephone Co., however, the California Supreme Court rejected that 

test and instead held that in a claim brought by a competitor, “any finding of unfairness . . . 

[must] be tethered to some legislatively declared policy.” 20 Cal. 4th 163, 185 (1999). The 

Ninth Circuit has observed that these two options—to apply Cel-Tech directly to consumer 

cases and require that the unfairness be tied to a “legislatively declared” policy as in Scripps 

Clinic, or to adhere to the former balancing test as stated in cases such as Motors, Inc.—are 

not mutually exclusive. Lozano v. AT & T Wireless Servs., Inc., 504 F.3d 718, 736 (9th Cir. 

2007). 

 Here, plaintiffs fail to establish a claim for relief under any of the UCL prongs; they 

fail to show a substantial likelihood of success as to any of the other causes of action and 

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make no averments of a deceptive or unfair business practice. Therefore, they fail to 

advance any factual support for their conclusory claim that they suffered as a result of 

“Defendants’ wrongful conduct” and thereby fall short of a showing of any prospect of 

success on the merits. 

I. Usury

 Plaintiffs’ eleventh claim for relief avers that the interest rate on the loan was 

usurious. Compl. at ¶ 114. In California, a claim for usury requires “(1) [t]he transaction 

must be a loan or forbearance; (2) the interest to be paid must exceed the statutory 

maximum; (3) the loan and interest must be absolutely repayable by the borrower; and (4) 

the lender must have a willful intent to enter into a usurious transaction.” Ghirardo v. 

Antonioli, 8 Cal. 4th 791, 798 (1994) (citations omitted). Here, the Complaint makes no 

averments as to the willful intent of the defendants to enter into a usurious transaction, nor 

does it suggest that the loan and interest were “absolutely repayable” by the Riveras. 

Therefore, the claim for usury also fails as a basis for preliminary injuctive relief. 

J. Accounting

 The twelfth claim for relief seeks an accounting from the defendants. Notwithstanding 

the fact that accounting is more appropriately characterized as a form of relief rather than as 

an independent claim, Borrego v. BMG U.S. Latin, 92 Fed. App’x 572, 573 (9th Cir. 2004) 

(citing Hillman v. Stults, 263 Cal. App. 2d 848, 876 (1968)), plaintiffs fail to show the need 

for such an accounting. 

 To assert a right to accounting, plaintiffs must demonstrate either “(1)... the 

relationship of the parties created an equitable duty to account...; (2)... the complicated 

nature of accounts would make it difficult, if not impossible, for a jury to unravel the 

numerous transactions; [or] (3)... an accounting on an otherwise legal claim [is] incidental to 

a demand for an injunction or other equitable relief.” Towers v. Titus, 5 B.R. 786, 793 

(N.D.Cal.1979) (citing 9 Wright & Miller § 2310). Moreover, they must prove that “some 

balance is due the plaintiff[s] that can only be ascertained by an accounting.” Teselle v. 

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McLoughlin, 173 Cal. App. 4th 156, 179 (2009). Here, nothing in the Complaint suggests 

that defendants owe the Riveras any amount of money - indeed, it appears just the opposite - 

or that the nature of the transaction or the relationship of the parties necessitates an 

accounting. Therefore, plaintiffs fail to establish a substantial likelihood of success on their 

claim for an accounting. 

K. Quite Title

 The Complaint’s last claim for relief is for “quiet title” to the Property. Defendants 

make a number of arguments against “quiet title,” but it is dispositive as to this claim that, 

under California law, a borrower may not assert “quiet title” against a mortgagee without 

first paying the outstanding debt on the property. See Miller v. Provost, 26 Cal. App. 4th 

1703, 1707 (1994) (“a mortgagor of real property cannot, without paying his debt, quiet his 

title against the mortgagee”) (citation omitted). Therefore, because the Riveras have not 

paid their outstanding debt on the Property, their claim for “quiet title” fails as a basis for 

preliminary injuctive relief. 

V. CONCLUSION 

 A preliminary injunction is an “extraordinary” remedy that is not lightly granted. A moving 

party must demonstrate some likelihood of success on the merits. Plaintiffs have failed to do so 

here, and their motion for preliminary injunctive relief therefore must be denied. 

 

IT IS SO ORDERED. 

Dated: 07/09/2010 

RICHARD SEEBORG 

UNITED STATES DISTRICT JUDGE 

Case 3:10-cv-02439-RS Document 18 Filed 07/09/10 Page 13 of 13