Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_10-cv-00627/USCOURTS-caed-2_10-cv-00627-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 15:1601 Truth in Lending

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28 This matter is deemed suitable for decision without oral *

argument. E.D. Cal. R. 230(g).

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

DAVID FREUDENBERGER, )

)

Plaintiff, ) 2:10-cv-00627-GEB-DAD

)

v. ) ORDER DENYING MOTION FOR

) A TEMPORARY RESTRAINING ORDER*

CITIMORTGAGE, INC., DIVERSIFIED )

CAPITAL FUNDING, INC., BAYVIEW )

LOAN SERVICING LLC, MORTGAGE )

ELECTRONIC SYSTEMS, INC., MERSCORP,)

INC., CR TITLE SERVICES, INC., and )

DOES 1 to 100, inclusive, )

)

Defendants. )

)

Late Wednesday afternoon on March 17, 2010, Plaintiff David

Freudenberger filed a motion for a temporary restraining order

(“TRO”). Plaintiff seeks in his TRO motion to enjoin a trustee’s sale

of property located at 9240 Granite Bay Court, Granite Bay, California

95746, scheduled for March 18, 2010 at 10:00 a.m.

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I. Legal Standard

“Temporary restraining orders are governed by the same 

standard applicable to preliminary injunctions.” Pimentel v. Deutsche

Bank Nat. Trust Co., 2009 WL 3398789, at *1 (S.D. Cal. 2009). 

Plaintiff “must establish that he is likely to succeed on the merits,

that he is likely to suffer irreparable harm in the absence of

[injunctive] relief, that the balance of equities tips in his favor,

and that an injunction is in the public interest.” Id. (citing Winter

v. Natural Resources Defense Council, Inc., –- U.S. –-, 129 S.Ct. 365,

374 (2008)).

II. Analysis

A. Irreparable Harm

Plaintiff argues he will suffer irreparable harm if he loses 

his home in the foreclosure sale. (Mot. 13:3-4.) Plaintiff alleges

in his complaint that he took out a “high risk” $1,995,000.00 loan to

refinance his home and that he can not afford to make monthly payments

on that loan. (Compl. ¶ 17.) Plaintiff avers he made his last

payment on the loan in March 2009. (Freudenberger Decl. ¶ 10.) 

Plaintiff also avers that since making his last loan payment, he has

met with a financial counseling company which advised him that he

“could not possibly afford the current mortgage payment.” (Id. ¶ 13.) 

Plaintiff avers he made failed attempts to “work out a loan

modification.” (Id.) 

“[W]hether a particular foreclosure constitutes irreparable

harm turns in part on the reasons for foreclosure.” Mandrigues v.

World Savings, Inc., 2009 WL 160213, at *3 (N.D. Cal. 2009). Here,

the record suggests Plaintiff took out a loan beyond his financial

means and that he has not made a payment on his loan for almost a

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year; the resulting harm of which does not entitle him to injunctive

relief. See Alcaraz v. Wachovia Mortg. FSB, 2009 WL 30297, at *4

(E.D. Cal. 2009) (denying motion for preliminary injunction because

while the “loss of a home is a serious injury[,] . . . . the record

suggests that Ms. Alcaraz sought a loan beyond her financial means and

expectation of job loss[,] . . . [and the] resulting harm does not

alone entitle her to injunctive relief”). Even though Plaintifff’s

loss of his home may yet constitute an irreparable injury, Plaintiff

has failed to adequately explain why he has delayed in seeking a TRO,

that he has a probable chance of success on the merits, that the

balance of equities tips in his favor, or that public interests favors

the TRO he seeks.

Plaintiff has not provided facts shedding light 

on why Plaintiff waited until less than twenty four hours before the

foreclosure proceeding to file his TRO motion. Plaintiff avers that

he received Notice of Sale “on or about February 25, 2010.” (Id. ¶

11.) However, Plaintiff offers no explanation why he did not seek

relief weeks ago, thus permitting Defendants to file a response to

Plaintiff’s TRO motion. “It is self-evident that a trustee’s sale

could not have been scheduled without notice or without a host of

preliminary legal processes involving Plaintiff[’s] . . . non-payment

of [his] mortgage.” Carnero v. EMC Mortg. Corp., 2009 WL 3619316, at

*1 (N.D. Cal. 2009). Under Local Rule 231(b), “[s]hould the Court

find that the applicant unduly delayed in seeking injunctive relief,

the Court may conclude that the delay constitutes laches or

contradicts the applicant’s allegations of irreparable injury and may

deny the motion solely on either ground.” E.D. Cal. R. 231(b).

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An injunction is an equitable remedy, and as such, it is not

favored when the record indicates Plaintiff unduly delayed in seeking

injunctive relief.

B. Likelihood of Success on the Merits

Plaintiff has not shown he is likely to succeed on the 

merits of his claims. Plaintiff argues that “Defendant MERS was not

authorized to conduct business in California [and therefore] the

appointment of Defendant CRT [as trustee] was void . . . and CRT is

not duly authorized to proceed with [the] trustee’s sale.” (Mot.

9:14-16.) However, “MERS is not required to obtain a certificate of

qualification from the Secretary of State because it does not transact

intrastate business within the meaning of the statute.” Pok v.

American Home Mortg. Servicing, Inc., 2010 WL 476674, at *1 n.1 (E.D.

Cal. 2010). Further, Plaintiff has not demonstrated how CRT’s status

as trustee affects Plaintiff’s ability to rescind the loan. 

Therefore, Plaintiff has not established a likelihood of success on

this claim.

Plaintiff also argues he is entitled to a TRO since 

“Defendants are not the beneficiary, owner or holder in due course of

the Promissory Note [and therefore] they do not have standing or the

legal authority to foreclose upon the Deed of Trust securing payment.” 

(Mot. 10:14-16.) However, “[u]nder California law, there is no

requirement for the production of the original note to initiate a

non-judicial foreclosure.” Casteneda v. Saxon Mortg. Services, Inc., 

--- F.Supp.2d ----, 2009 WL 4640673, at *7 (E.D. Cal. 2009) (compiling

cases). Therefore, Plaintiff has not established a likelihood of

success on this claim.

Plaintiff also argues he has rescinded the loan under the 

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Truth in Lending Act, 16 U.S.C.§ 1535(b) (“TILA”), and thus “the

mortgage is voided by operation of law.” (Mot. 11:13-18.) Plaintiff

argues he did not receive the statutorily required notices of his

right to cancel his loan, and he “served Defendants with their

rescission notice on March 3, 2010.” (Id.)

Unless the lender acquiesces in the rescission, the

rescission is not automatic. If rescission were

automatic, ‘a borrower could get out from under a

secured loan simply by claiming TILA violations,

whether or not the lender had actually committed

any’ . . . . [Plaintiff does] not assert, nor could

[he] given the pending sale, that [Defendants]

acquiesced in the rescission. Furthermore,

[Plaintiff does] not specify whether [he] offered

to repay the loan amount or [is] able to make such

an offer. Accordingly, the record before the court

does not show that [Plaintiff is] capable of

performing [his] own rescission obligations. 

Gerth v. American Mortg. Exp. Fin., at *1 (S.D. Cal. 2009) (quoting

Yamamoto v. Bank of New York, 329 F.3d 1167, 1172 (9th Cir. 2003)

(emphasis in original)). Therefore, Plaintiff has not established a

likelihood of success on the merits of his TILA claim.

C. Public Interest

Plaintiff argues the public interest favors granting his 

request for a TRO since “if the Plaintiff’s property is foreclosed

upon and left vacant – it will likely fall into disrepair and decline

in value.” (Mot. 13:19-21.) However, Plaintiff has not made a

payment on his loan since March 2009 and has received financial advice

that he can “not possibly afford the current mortgage payment.” 

(Freudenberger Decl. ¶ 13.) Plaintiff has not demonstrated that

allowing him to remain in his home without making payments on his loan

is in the public interest.

D. Balance of Equities

Finally, Plaintiff argues the balance of equities weigh in 

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his favor since “Defendants suffer nothing by preserving the status

quo.” (Mot. 13:16-18.) However, Plaintiff’s conclusory assertion

that Defendants will suffer no harm from an order postponing the

foreclosure sale is insufficient to establish that the balance of

equities weigh in favor of granting the TRO.

III. Conclusion

Since Plaintiff has failed to demonstrate that ex parte

relief is justified under the present circumstances, that he has a

likelihood of success on the merits of his claims, that the public

interest favors granting his motion, or that the equities tip in his

favor, Plaintiff’s motion is DENIED.

Dated: March 18, 2010

 

GARLAND E. BURRELL, JR.

United States District Judge

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