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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

STEPHEN J. MILLMAN, et al.,

Plaintiffs,

v.

WILMINGTON SAVINGS FUND 

SOCIETY FSB, et al.,

Defendants.

Case No. 16-cv-07402-EMC 

ORDER DENYING PRELIMINARY 

INJUNCTION

Docket No. 4

I. INTRODUCTION

Plaintiffs in this case are homeowners facing a foreclosure sale of their property. The 

Court previously issued a temporary restraining order and ordered further briefing on whether a 

preliminary injunction was warranted. Docket No. 10. Now pending before the Court is 

Plaintiffs’ request for a preliminary injunction. The Court DENIES the request.

II. FACTUAL AND PROCEDURAL BACKGROUND

On November 6, 2006, Plaintiffs obtained a loan in the amount of $901,600 from Bank of 

America, N.A., secured by a Deed of Trust (“DOT”) in connection with a house in San Ramon, 

CA. See Docket No. 1 (Compl.) ¶ 15; Docket No. 19-1 (Murphy Decl.) Ex. 1. The DOT was 

subsequently assigned to other parties a number of times. The present holder of the DOT is 

Defendant Wilmington Christiana. The present servicer of Plaintiffs’ loan is Defendant BSI. 

Prior to the assignment to Wilmington Christiana, the prior holder, Wilmington Primestar, 

recorded a Notice of Default and Election to Sell, see Murphy Decl. Ex. 6, which indicated that 

Plaintiffs were in default in the amount of $217,528.74. 

Beginning in April 2013, Plaintiffs have repeatedly sought loan modifications through the 

loans various successive servicers. See Compl. ¶¶ 32-43. Plaintiffs allege that on more than one 

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occasion, they were notified that their application for a modification was complete, only to receive 

subsequent notice that the servicing of their loan had been transferred to another party, requiring 

them to begin the process anew. In May 2015, Plaintiffs received notice from the then-servicer, 

Statebridge, denying their request for modification. Compl. ¶ 37. Plaintiffs appealed this 

determination and send additional documentation, but were informed in July 2016 that Statebridge 

would be proceeding with foreclosure. Compl. ¶ 39. In response to Plaintiffs’ inquiry, 

Statebridge notified them that their appeal had been denied on May 19, 2016. Id. 

In an effort to stave off foreclosure, Plaintiffs filed the Complaint in the present case, 

which asserted causes of action for (1) Attempted Wrongful Foreclosure under Cal. Civil Code §§ 

2924(a)(6) and 2923.55; (2) Cancellation of Instruments under Cal. Civil Code § 3412; (3) 

Violation of the UCL, Cal. Bus. and Prof. Code § 17200 et seq.; (4) Declaratory Relief; and (5) 

Breach of Contract.

III. DISCUSSION

“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. Nat. 

Res. Def. Council, Inc., 555 U.S. 7, 20, 129 S. Ct. 365, 374, 172 L. Ed. 2d 249 (2008). The party 

seeking the restraining order bears the burden of proving these elements. Klein v. City of San 

Clemente, 584 F.3d 1196, 1201 (9th Cir. 2009). In applying the Winter factors, courts in the Ninth 

Circuit employ a “sliding scale” approach whereby “the elements of the . . . test are balanced, so 

that a stronger showing of one element may offset a weaker showing of another.” Alliance for the 

Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011). In other words, “the required 

degree of irreparable harm increases as the probability of success decreases.” Winter, 502 F.3d at

862. But regardless of the strength of the showing of potential harm, a plaintiff must, at minimum, 

raise “serious questions going to the merits.” Cottrell, 632 F.3d at 1132.

Plaintiffs argue that they have established the requisite likelihood of success on the merits 

for four principal reasons. First, they argue that the assignment of the loan agreement from the 

original lender to Defendant Wilmington was not valid because Plaintiffs’ original promissory 

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note “lacks any endorsement by the original lender or any subsequent lender.” Docket No. 4-1 at 

4. This contention underlies Plaintiffs’ second, third, and fourth causes of action. However, 

Defendants have presented evidence showing both that the original promissory note was in fact 

endorsed by the original lender, see Murray Decl. Ex 1., and that there has been an unbroken chain 

of assignments of the DOT from the original lender to the present holder, see Docket No. 18 

(RJN) Exs. 1-4. Plaintiffs therefore have no likelihood of success on the merits on this issue.

Second, Plaintiffs claim that the Notice of Default is invalid under Cal. Civ. Code § 

2923.55, which provides, inter alia, that before recording a notice of default, a lender must 

“contact the borrower in person or by telephone in order to assess the borrower’s financial 

situation and explore options for the borrower to avoid foreclosure.” As noted above, however, 

Plaintiffs have previously applied for loan modification. As this Court has explained, the purpose 

of the contact requirement of § 2923 is “to appraise the borrower of her loan modification 

options.” Foote v. Wells Fargo Bank, N.A., No. 15-CV-04465-EMC, 2016 WL 2851627, at *5–6 

(N.D. Cal. May 16, 2016). But where a plaintiff has pursued loan modification applications, such 

that she is “well aware of her loan modification options,” and has “actively communicated” with 

her lender about those applications, any violation of § 2923.55 would not “deprive[] [her] of the 

opportunity to obtain loss mitigation.” Id. For that reason, “[s]everal courts have concluded that a 

section 2923(b)(2) claim fails where the plaintiff mortgagor and the defendant mortgage servicer 

had been in communication regarding a loan modification before a notice of default was 

recorded.” Green v. Cent. Mortg. Co., 148 F. Supp. 3d 852, 871 (N.D. Cal. 2015) (collecting 

cases). The same is true here. Plaintiffs’ past applications for loan modifications demonstrate 

their awareness of their modification options, and are accordingly fatal to their § 2923.55 claim.

The Court recognizes that Plaintiffs submitted a declaration alleging that their lender never 

contacted them to explore options to avoid foreclosure, contradicting the declaration of 

compliance with the requirements of § 2923.55 included as part of the Notice of Default. But 

even if the Court were to accept Plaintiffs’ declaration in full, their claim would still fail. Even 

assuming that Defendants failed entirely to contact Plaintiffs, the fact that Plaintiffs had filed 

multiple loan modification applications, including an appeal after they were denied, demonstrates 

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that they were fully aware of their options. Because the purpose of § 2923.55 was satisfied, 

Plaintiffs claim fails even in the face of a technical violation of the statute.1

Third, Plaintiffs dispute that they are, in fact, in default in the amount claimed by 

defendants, $217,528.74. But Plaintiffs’ bare denial of their obligation, unsupported by any other 

factual allegations, is not enough to raise a serious question as to the validity of the Notice of 

Default. Plaintiffs’ Reply again states that they “have disputed that they are in default in the 

amount alleged in the Notice of Default,” Docket No. 23 at 4, but Plaintiffs have not elaborated on 

this contention or provided any kind of corroboration of their claims. 

Finally, Plaintiffs’ initial brief also argued that they were likely to succeed on their breach 

of contract claim because of Defendants’ alleged failure to comply with various terms and 

conditions of the DOT. But as Defendants correctly argue, under California law, a Plaintiff must 

prove four elements to prevail in a breach of contract claim: “the existence of the contract, 

performance by the plaintiff or excuse for nonperformance, breach by the defendant and 

damages.” First Commercial Mortg. Co. v. Reece, 89 Cal. App. 4th 731, 745 (2001). While 

Plaintiffs have claimed, without support, that they are not in default in the amount indicated by 

Defendants, they have never claimed not to be in default at all. Accordingly, Plaintiffs cannot 

demonstrate their own performance. Indeed, in their reply brief, Plaintiffs appear almost entirely 

to have abandoned this cause of action, claiming only in a single, conclusory sentence that they 

“have stated sufficient facts to support their breach of contract claim” without responding at all to 

the substance of Defendants’ argument. Docket No. 23 at 5.

In sum, Plaintiffs have failed to any likelihood of success on the merits. Accordingly, they

have not carried their burden under Winter, which requires that a plaintiff must, at minimum, raise 

“serious questions going to the merits.” Cottrell, 632 F.3d at 1132. Plaintiffs have not done so 

here. Because there is no likelihood of success on the merits, the Court DENIES the request for a 

 

1 While the decision of this Court in Castillo v. Bank of Am., N.A., No. C 14-02957 JSW, 2014 

WL 4290703, at *5 (N.D. Cal. Aug. 29, 2014) could be read to suggest the contrary, the Court 

declines to follow Castillo, as it is clearly distinguishable from the present case. The plaintiff in 

that case only appeared to have met in person with bank representatives. There was, accordingly, 

an evidentiary question as to what he had actually been told regarding his modification options. 

By contrast, the Plaintiffs in this case actually went through a full loan modification application. 

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preliminary injunction. This Order is, however, without prejudice to any further request for 

injunctive relief should Plaintiffs file an additional application for a loan modification.

The $9,500 bond posted by Plaintiffs is exonerated and shall be returned to them.

IT IS SO ORDERED.

Dated: January 30, 2017

______________________________________

EDWARD M. CHEN

United States District Judge

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