IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

GARY C. GOSHA and KIT M.

GOSHA,

Plaintiffs,

v.

THE BANK OF NEW YORK MELLON

CORPORATION fka THE BANK OF

NEW YORK, AS TRUSTEE (CWALT

2005-72), Delaware 

Corporation; BANK OF AMERICA

N.A., a Delaware Corporation;

BAYVIEW LOAN SERVICING LLC, a

Florida Corporation; and CLEAR

RECON CORP, a California

Corporation,

Defendants.

3:16-cv-00073-BR 

 

OPINION AND ORDER

BROWN, Senior Judge.

This matter comes before the Court on Plaintiffs’ Motion

(#164) for Order to Withdraw and Disburse Funds and the Motion

(#165) to Disburse Funds filed by Defendant Bank of New York

Mellon Corporation (BONY).

For the reasons that follow, the Court GRANTS Plaintiffs’

Motion and DENIES Defendant’s Motion.

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BACKGROUND

On January 15, 2016, Plaintiffs appearing pro se brought

this action to prevent foreclosure of the mortgage on their

property. The mortgage was held by BONY and serviced at various

times by Defendants Bayview Loan Servicing LLC and Clear Recon

Corp. Plaintiffs alleged several claims against all Defendants

for violation of various consumer-protection laws. Plaintiffs

also sought a temporary restraining order (TRO) to prevent the

foreclosure sale. 

On January 25, 2016, the day before the foreclosure sale on

Plaintiffs’ home was scheduled to occur, the Court granted

Plaintiffs’ Motion for a TRO and enjoined the foreclosure during

the pendency of this action. Order (#18). The Court also

directed Plaintiffs to deposit funds monthly with the Clerk of

Court as bond for the TRO.

Plaintiffs made various payments to the Clerk of Court

during this litigation pursuant to the Court’s Order. See Docket

#23, #47, #54, #90, #91, #109, #110, #129, and #132. The funds

held by the Clerk of Court total $5,300.

On December 13, 2016, the Court granted Defendants’ Motions

(#75, #79) to Dismiss Plaintiffs’ Complaint (Order #133) and

entered Judgment (#134) of Dismissal with prejudice against

Plaintiffs. 

On March 20, 2017, Plaintiffs filed with the Ninth Circuit a

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Notice of Appeal (#147) of this Court’s judgment.

On May 25, 2017, BONY cancelled its nonjudicial foreclosure

of Plaintiffs’ mortgage.

On June 22, 2018, the Ninth Circuit issued a Mandate (#157)

affirming this Court’s dismissal of Plaintiffs’ case.

STANDARDS

Federal Rule of Civil Procedure 65(c) provides: “The court

may issue a preliminary injunction or a temporary restraining

order only if the movant gives security in an amount that the

court considers proper to pay the costs and damages sustained by

any party found to have been wrongfully enjoined or restrained.”

There is a “rebuttable presumption” that a wrongfully

enjoined party is entitled to have the bond executed and to

recover provable damages up to the amount of the bond. Martin v.

Litton Loan Servicing, LP, 689 F. App’x 533, 533 (9th Cir. 2017)

(citing Nintendo of Am. v. Lewis Galoob Toys, Inc., 16 F.3d 1032,

1036 (9th Cir. 1994)). 

DISCUSSION

Plaintiffs contend they are entitled to the funds they

deposited with the Court on the ground that even though BONY is a

prevailing party, BONY waived its right to collect the funds when

it voluntarily cancelled the nonjudicial foreclosure of

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Plaintiffs’ mortgage and failed to show that it sustained any

damages as a result of the TRO.

BONY, in turn, contends it was wrongfully restrained from

proceeding with the foreclosure and, as the prevailing party in

this action, is entitled to the funds deposited with the Clerk of

Court.

The Court notes the fact that BONY rescinded the prior

foreclosure proceeding or that Defendants prevailed in this

action is not determinative of any party’s right to recover the

bond proceeds. Under Federal Rule of Civil Procedures 65(c) the

bond is intended to pay the costs and damages sustained by any

party found to have been wrongfully enjoined or restrained. 

Although BONY prevailed on the merits of Plaintiffs’ claims and

was wrongfully enjoined from proceeding with the foreclosure

sale, BONY is, nevertheless, only entitled to recover damages

pursuant to the bond for “provable” damages resulting from the

wrongful restraint. See Fidelity Nat'l Fin. Inc. v. Friedman,

472 F. App’x 577, 579 (9th Cir. 2012). 

Here BONY has failed to present evidence of any damages as a

result of the issuance of the TRO. In fact, BONY has a secured

interest in Plaintiffs’ property and states it will now pursue

nonjudicial foreclosure under the deed of trust at issue in this

litigation. To the extent that BONY succeeds in such a 

foreclosure action, it will recover damages resulting from

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Plaintiffs’ failure to pay their mortgage. Thus, on this record

BONY has not presented evidence of any damages to support their

Motion. Accordingly, the Court concludes the funds on deposit

with the Clerk of Court should be returned to Plaintiffs. 

CONCLUSION

For these reasons, the Court DENIES Defendants’ Motion

(#165) to Disburse Funds and GRANTS Plaintiffs’ Motion (#164) for

Order to Withdraw and Disburse Funds.

The Court will enter a separate Order of Disbursement that

complies with Local Rule 67-3 for disbursement of funds to

Plaintiffs by the Clerk of Court.

IT IS SO ORDERED.

DATED this 7th day of November, 2018.

/s/ Anna J. Brown

 

ANNA J. BROWN

United States Senior District Judge 

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