Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_09-cv-08135/USCOURTS-azd-3_09-cv-08135-1/pdf.json

Nature of Suit Code: 371
Nature of Suit: Truth in Lending
Cause of Action: 15:1692 Fair Debt Collection Act

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 Plaintiffs claim to seek declaratory relief in addition to injunctive relief.

Declaratory relief and preliminary injunctions are governed by different standards and are

considered at different stages of litigation. As such, the Court considers plaintiffs’ motion

as a motion for preliminary injunction only.

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Billy Breedlove; Diana J. Breedlove, 

Plaintiffs, 

vs.

America’s Servicing Company; Arch

McDonald; Rebecca Williams, 

Defendants. 

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No. CV 09-8135-PCT-JAT

ORDER

Pending before the Court are Plaintiffs’ Motion for Emergency Preliminary Injunctive

and Declaratory Relief (Doc. # 40)1

 and Plaintiffs’ Motion for Leave to File Second

Amended Complaint (Doc. # 42). For the reasons that follow, the Court denies Plaintiffs’

request for preliminary injunction, but grants Plaintiffs’ leave to file their second amended

complaint.

I. Background

In December 2005, Plaintiffs purchased real property in Taylor, Arizona. In order to

finance the property, Plaintiffs borrowed $281,250 from United Federal Bank of

Indianapolis. The loan included a promissory note and a deed of trust, which named

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Mortgage Electronic Registration Systems, Inc. (“MERS”) as the beneficiary. Wells Fargo,

doing business as America’s Servicing Company, became the servicer with respect to

Plaintiffs’ loan. Plaintiffs eventually defaulted on the note, and the trustee initiated

foreclosure. A trustee’s sale was held on August 27, 2009, and the property at issue was

sold.

II. Motion for Preliminary Injunction

To obtain preliminary injunctive relief, the moving party must show: (1) a likelihood

of success on the merits; (2) a likelihood of irreparable harm to the moving party in the

absence of preliminary relief; (3) a balance of equities tips in the favor of the moving party;

and (4) that an injunction is in the public interest. Winter v. Natural Res. Def. Council, Inc.,

129 S.Ct. 365, 376 (2008). Traditionally, injunctive relief was also appropriate under an

alternative “sliding scale” test. The Lands Council v. McNair, 537 F.3d 981, 987 (9th

Cir.2008). However, the Ninth Circuit overruled this standard in keeping with the Supreme

Court’s decision in Winter. Am. Trucking Ass’ns Inc. v. City of Los. Angeles, 559 F.3d 1046,

1052 (9th Cir. 2009) (holding that “[t]o the extent that our cases have suggested a lesser

standard, they are no longer controlling, or even viable”).

A. Likelihood of Success on the Merits

The Court has already considered Plaintiffs’ first, second, and third causes for

injunctive relief during the October 21, 2009, preliminary injunction hearing (Doc. # 22).

In that hearing, the Court found that Plaintiffs failed to show a likelihood of success on the

merits as it relates to the first, second, and third causes for injunctive relief. Because

Plaintiffs raise the same arguments with respect to these three causes for injunctive relief, the

Court need not revisit its October 21 decision.

In Plaintiffs’ fourth cause for injunctive relief, they assert that they were not given

proper legal notice upon transfer of the promissory note in the Superior Court case. Even if

proven as true, Plaintiffs have failed to cite any law supporting their position that this would

have a bearing on the right to non-judicial foreclosure, nor is the Court so persuaded.

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In Plaintiffs’ fifth cause for injunction, Plaintiffs assert that all collection activity must

stop until a decision has been rendered by this Court. Plaintiffs have failed to demonstrate

that a non-judicial foreclosure is a collection within the Fair Debt Collection Practices Act;

and, in any event, the right to non-judicial foreclosure is not automatically stayed by simply

filing a lawsuit. Plaintiffs’ argument is unavailing.

Plaintiffs next assert in their sixth cause for injunction that because the trustee’s sale

did not take place on the steps of the Navajo county court house, the sale was therefore

fraudulent and void. Plaintiffs have failed to cite any law indicating that the sale must take

place on the actual steps of the Navajo county court house. Nor is there any evidence that

the other statutory procedures for non-judicial foreclosure were not met. Lastly, Plaintiffs’

argument is mooted by A.R.S. § 33-811(C).

Plaintiffs’ seventh through thirteenth causes for injunctive relief are nothing more than

collateral attacks on the judgment of the Navajo County Superior Court, which this Court is

not permitted to address. As such, Plaintiffs’ arguments contained in their seventh through

thirteenth causes for injunctive relief fail to form a basis from which this Court could grant

Plaintiffs’ requested relief.

The Court has considered Plaintiffs’ Motion for Emergency Preliminary Injunctive

Relief, their memorandum and other arguments made in support, including their reply, and

Plaintiffs’ submitted evidence in support. For the reasons detailed above, the Court finds that

Plaintiffs have failed to demonstrate a likelihood of success on the merits.

B. Likelihood of Irreparable Harm

Even if the Court were persuaded that Plaintiffs were likely to succeed on the merits–a

conclusion this Court is not reaching–Plaintiffs have failed to show a likelihood of

irreparable harm in the absence of injunctive relief. Plaintiffs’ home has already been sold

and, hence, the Court is unable to preclude the trustee’s sale. To the extent Plaintiffs are

seeking injunctive relief to preclude the forcible detainer action currently ongoing in state

court, Plaintiffs have failed to show how a remedy of damages at law will not fully

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 In their reply, Plaintiffs also request the Court to strike Defendant’s Exhibit A, and

disqualify counsel for Defendant “for intentionally attempting to deceive this Court.” (Doc.

# 44 at p. 4.) The Court finds both requests to be without merit.

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compensate them for the losses they allege. Although the Court does not trivialize Plaintiffs’

alleged damages, Plaintiffs have failed to demonstrate that such damages are irreparable.

Accordingly, because Plaintiffs have failed to demonstrate a likelihood of success on

the merits or the presence of irreparable harm, the Court denies Plaintiffs’ request for a

preliminary injunction.2

III. Motion to Amend Complaint

Plaintiffs also seeks leave to file a second amended complaint. Plaintiffs’ request is

governed by Federal Rules of Civil Procedure 15(a)(2):

(a) Amendments Before Trial.

. . . .

(2) Other Amendments. In all other cases, a party may amend its

pleading only with the opposing party’s written consent or the court’s leave.

The court should freely give leave when justice so requires.

While the decision to grant or deny a motion to amend is within the discretion of the

district court, “Rule 15(a) declares that leave to amend ‘shall be freely given when justice so

requires’; this mandate is to be heeded.” Foman v. Davis, 371 U.S. 178, 182 (1962). “In

exercising its discretion[,] . . . ‘a court must be guided by the underlying purpose of Rule

15–to facilitate decision on the merits rather than on the pleadings or technicalities. . . . Thus,

‘Rule 15’s policy of favoring amendments to pleadings should be applied with extreme

liberality.’” Eldridge v. Block, 832 F.2d 1132, 1135 (9th Cir. 1987) (citations omitted).

“This liberality . . . is not dependent on whether the amendment will add causes of action or

parties.” DCD Programs, LTD. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987).

The liberal policy in favor of amendments, however, is subject to some limitations.

The United States Supreme Court has established that motions to amend should be granted

unless the district court determines that there has been a showing of: (1) undue delay; (2) bad

faith or dilatory motives on the part of the movant; (3) repeated failure to cure deficiencies

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by previous amendments; (4) undue prejudice to the opposing party; or (5) futility of the

proposed amendment. Foman, 371 U.S. at 182. “Generally, this determination should be

performed with all inferences in favor of granting the motion.” Griggs v. Pace Am. Group,

Inc., 170 F.3d 877, 880 (9th Cir. 1999) (citing DCD Programs, 833 F.2d at 186).

Significantly, “[t]he party opposing amendment bears the burden of showing prejudice,”

futility, or one of the other permissible reasons for denying a motion to amend. DCD

Programs, 833 F.2d at 187.

The Court has found no evidence of undue delay, bad faith, or undue prejudice. While

Defendants argue that Plaintiffs’ requested amendment is futile, Plaintiffs do add several new

allegations. Given the Ninth Circuit’s direction on motions to amend and Plaintiffs’

additional allegations, the Court believes Defendants arguments are best reserved for the

motion to dismiss context.

Again, for ease of administration, the Court will deny all pending motions to dismiss,

without prejudice, and with leave to re-urge, so that the Court has only one response per

Defendant, and so that such responses respond to the controlling pleading, which will be the

second amended complaint.

Accordingly,

IT IS ORDERED that Plaintiffs’ Motion for Emergency Preliminary Injunctive and

Declaratory Relief (Doc. # 40) is denied.

IT IS FURTHER ORDERED that Defendant Wells Fargo N.A.’s Motion to Dismiss

Plaintiffs’ Amended Complaint (Doc. # 18) is denied without prejudice and with leave to reurge if appropriate.

IT IS FURTHER ORDERED that Defendant Arch McDonald’s Motion to Dismiss

Plaintiffs’ Amended Complaint (Doc. # 19) is denied without prejudice and with leave to reurge if appropriate.

IT IS FURTHER ORDERED that Defendant Mark Bridgewater’s Motion to

Dismiss Plaintiffs’ Amended Complaint (Doc. # 26) is denied without prejudice and with

leave to re-urge if appropriate.

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IT IS FURTHER ORDERED that Defendants’ Motion to Strike (Doc. # 29) is

denied as moot.

IT IS FURTHER ORDERED that Defendant Arch McDonald’s Request for

Summary Disposition (Doc. # 30) is denied as moot.

IT IS FURTHER ORDERED that Plaintiffs’ Motion Requesting Permission to File

Electronically (Doc. # 35) is granted. However, Plaintiffs are cautioned that they are only

permitted to file electronically in this case; and any abuse of the electronic system, such as

repeated frivolous filings or any other abuse, will cause the removal of Plaintiffs’ ability to

file electronically in this case.

IT IS FURTHER ORDERED that Plaintiffs’ Motion for Summary Judgment (Doc.

# 37) is denied as moot.

IT IS FURTHER ORDERED that Defendants’ Motion to Strike Plaintiffs’ Motion

for Summary Judgment (Doc. # 39) is denied as moot.

IT IS FURTHER ORDERED that Plaintiffs’ Motion for Leave to File Second

Amended Complaint (Doc. # 42) is granted.

IT IS FURTHER ORDERED that Plaintiffs shall file a non-strike out version of

their Second Amended Complaint on or before April 19, 2010. Plaintiffs are cautioned that

a failure to file their Second Amended Complaint will cause the Court to consider any refiled motions to dismiss without further amendment.

IT IS FURTHER ORDERED that if Plaintiffs fail to file their Second Amended

Complaint, Defendants shall re-respond to Plaintiffs’ First Amended Complaint (Doc. # 13),

including re-filing any motions to dismiss if they deem such response to be appropriate.

IT IS FURTHER ORDERED that Plaintiffs’ Motion to Accelerate Ruling (Doc. #

51) is denied as moot.

DATED this 31st day of March, 2010.

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