2018-00226175-CU-OR

Freddie Clariza vs. Wells Fargo Bank

Nature of Proceeding: Motion for Preliminary Injunction

Filed By: Wyatt, Russ

The Order to Show Cause is DISCHARGED and plaintiffs Freddie Clariza and Evangelina Clariza’s (“Plaintiffs”) Motion for Preliminary Injunction is UNOPPOSED and is GRANTED.

Factual and Procedural Background

This is a nonjudicial foreclosure case that was filed on January 29, 2018. In September of 2005, Plaintiffs borrowed $391,200, which was secured by a Deed of Trust on the real property located at 5328 Buckwood Way, Sacramento, California (the “Property”). The Property is Plaintiffs’ primary residence. (Declaration of Freddie Clariza (“Clariza Decl.”) at ¶ 2.)

Defendant Wells Fargo Bank, N.A. (“WFB”) is the current servicer of the loan.

Defendant Clear Recon Corporation (“CRC”) is the current foreclosing trustee.

In December of 2017, WFB invited Plaintiffs to apply for a loan modification. Plaintiffs submitted an application, which they contend was “complete,” on December 29, 2017, via fax. (Clariza Decl. at ¶ 4, Exhs. A, B.) On January 2, 2018, Mr. Clariza contacted

WFB to confirm receipt of the completed application, but he was placed on hold for an extended period of time and eventually hung up without speaking to a WFB agent. (Clariza Decl. at ¶ 5.)

On January 4, 2018, WFB and CRC recorded a Notice of Trustee’s Sale against the Property setting the sale to take place on February 1, 2018. (Exh. C.)

On January 11, 2018, Mr. Clariza called WFB and spoke with Reed, a WFB agent. Reed informed Mr. Clariza that WFB had received Plaintiffs’ application for a loan modification. (Clariza Decl. at ¶ 6.) Reed also informed Plaintiffs that two additional documents were required: (1) a copy of the lease agreement with tenant; and (2) proof of residency of non-borrower contributor (Plaintiffs’ son). (Clariza Decl. at ¶ 7.)

On January 17, 2018, Plaintiffs submitted these two additional documents to WFB via fax. (Clariza Decl. at ¶ 8, Exh. D.) The next day, Mr. Clariza called WFB and was told WFB had received Plaintiffs’ additional documents. (Clariza Decl. at ¶ 9.) During this call, WFB informed Mr. Clariza that if additional documents were needed, WFB would contact Plaintiffs within 48 to 72 hours. (Clariza Decl. at ¶ 10.)

WFB failed to return a written determination to Plaintiffs either granting or denying Plaintiffs’ application for a loan modification. (Clariza Decl. at ¶ 11.)

Plaintiffs then filed this instant action on January 29, 2018.

In this action, Plaintiffs allege violation of Civil Code sections 2924.11 (dual tracking) and 2923.7 (single point of contact).

On January 30, 2018, Plaintiffs applied ex parte for a temporary restraining order (“TRO”) enjoining the sale pending resolution of this matter. This Court issued an OSC, granted the TRO, and set the matter for hearing. This motion for preliminary injunction follows.

The order required Plaintiffs to serve the Order on Plaintiffs’ ex parte application for a TRO on WFB and CRC five court days prior to hearing. The proofs of service reflect WFB’s agent for service was personally served on January 31, 2018, and CRC’s agent for service was personally served on January 30, 2018. All proofs of service were filed with the Court on February 9, 2018.

CRC filed a Declaration of Non-Monetary Status on February 13, 2018, indicating its belief that it has only been named as a defendant in its capacity as Trustee under the Deed of Trust and not arising out of any wrongful acts or omissions on its part in the performance of its duties as Trustee. WFB has not filed any opposition.

Discussion

“As its name suggests, a preliminary injunction is an order that is sought by a plaintiff prior to a full adjudication of the merits of its claim[s]. [Citation.]” (White v. Davis (2003) 30 Cal. 4th 528, 554.) “The purpose of such an order ‘is to preserve the status quo . . .

. It ‘does not constitute a final adjudication of the controversy.’ [Citation.]” (Costa Mesa City Employees Assn v. City of Costa Mesa (2012) 209 Cal. App. 4th 298, 305.)

“To obtain a preliminary injunction, a plaintiff ordinarily is required to present evidence

of the irreparable injury or interim harm that it will suffer if an injunction is not issued pending an adjudication of the merits. (White v. Davis (2003) 30 Cal. 4th 528, 554 [emphasis added]; see generally Code Civ. Proc. § 426, subd. (a)(2) [a preliminary injunction “may be granted . . . [w]hen it appears . . . that the commission or continuance of some act during the litigation would produce . . . great or irreparable injury . . . to a party to the action].)

“‘[T]he extraordinary remedy of injunction’ cannot be invoked without showing the likelihood of irreparable harm. [Citation.]” (Intel Corp. v. Hamidi (2003) 30 Cal. 4th 1342, 1352.) The threat of “irreparable harm” must be imminent. “An injunction cannot issue in a vacuum based on the proponents’ fears about something that may happen in the future.[..i]t must be supported by actual evidence that there is a realistic prospect that the party enjoined intends to engage in the prohibited activity.” (Korean Philadelphia Presbyterian Church v. California Presbytery (2000) 77 Cal. App. 4th 1069, 1084.)

“If the threshold requirement of irreparable injury is established, then [the court] must examine two interrelated factors to determine whether . . . a preliminary injunction should be [issued]: ‘(1) the likelihood that the moving party will ultimately prevail on the merits and (2) the relative interim harm to the parties from issuance or non-issuance of the injunction.’ [Citation.]” (Costa Mesa City Employees Assn., supra, 209 Cal. App. 4th at 306.) The greater the showing on one factor, the lesser the showing must be on the other. (Butt v. State of California (1992) 4 Cal. 4th 668, 678.) However, a preliminary injunction may not be granted, regardless of the balance of interim harm, unless it is reasonably probable that the moving party will prevail on the merits. (San Francisco Newspaper Printing Co. v. Superior Court (1985) 170 Cal. App. 3d 438, 442.)

The party seeking injunctive relief bears the burden of showing all elements necessary to support issuance of a preliminary injunction. (O’Connell v. Super. Ct. (2006) 141 Cal. App. 4th 1452, 1481.)

“The ultimate goal of any test to be used in deciding whether a preliminary injunction should issue is to minimize the harm which an erroneous interim decision may cause.” (IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 73.)

Irreparable Injury

Plaintiffs argue the loss of their home through a foreclosure sale would result in irreparable injury. WFB and CRC do not proffer any argument in opposition and the Court agrees. ““Losing one’s home through foreclosure is an irreparable injury.” ( Wrobel v. S.L. Pope & Associates, 2007 U.S. Dist. LEXIS 59779, 2007 WL 2345036 at *1 (S.D. Cal. August 15, 2007).) Accordingly, the Court must now weigh the two interrelated factors of balancing of the harm and likelihood of success.

Balancing of the Harm

The comparative harm to Plaintiffs is greater than that to defendants. Whereas Plaintiffs stand to lose their home, defendants only stand to lose immediate use of the security. Any harm to defendants, if it is later found that the injunction was improvidently granted, is purely financial.

Plaintiffs’ Likelihood of Success

Civil Code Section 2924.11 (Dual Tracking)

The court concludes there is at least some likelihood that Plaintiffs will prevail on their dual tracking claim. Civil Code section 2924.11 generally prohibits mortgagees, beneficiaries and mortgage servicers, among others, from proceeding with a trustee’s sale where the borrower has applied for a loan modification and the mortgage servicer has not yet made a written determination regarding the borrower’s eligibility. Plaintiffs have produced evidence that they applied for a modification and that no written determination followed. Notably, defendants have not produced any evidence contradicting this evidence.

Civil Code Section 2923.7 (Single Point of Contact)

Plaintiffs allege they requested a single point of contact (“SPOC”) be assigned to their loan application, but they were never informed of any identifiable person from WFB claiming to be their SPOC. Plaintiffs presented evidence that they contacted WFB multiple times and spoke with various agents, rather than a SPOC.

Civil Code section 2923.7(a) provides that “Upon request from a borrower who requests a foreclosure prevention alternative, the mortgage servicer shall promptly establish a single point of contact and provide to the borrower one or more direct means of communication with the single point of contact.” A “single point of contact” is defined in subsection (e) to mean an individual or team of personnel each of whom has the ability and authority to perform the responsibilities set forth in that section.

WFB and CRC have offered no argument in opposition. Based on the foregoing, the Court finds there is at least some likelihood Plaintiffs will prevail on this cause of action.

Conclusion

On the evidence before it, and in the absence of any opposition from defendants, the Court concludes the evidence tips in favor of an order preserving the status quo pending disposition of Plaintiffs’ legal claims. The Court therefore grants the requested Preliminary Injunction that the above named defendants and each of their officers, agents, employees, representatives, and all persons acting in concert or participating with them, are restrained and enjoined from resetting, scheduling, or rescheduling, conducting, or carrying to completion, any Trustee’s Sale of the Property, more commonly known as 5328 Buckwood Way, Sacramento, California 95835, pending resolution of a trial on the merits in this action.

On granting an injunction, the Court must require an undertaking on the part of the applicant to the effect that the applicant will pay to the party enjoined any damages, not exceeding an amount to be specified, the party may sustain by reason of the injunction, if the Court finally decides that the applicant was not entitled to the injunction. (Code Civ. Proc. § 529.)

The issuance of a preliminary injunction is conditioned on proof that Plaintiffs have posted an undertaking with the Court in the amount of $10,000.00.