Case Number: KC066968    Hearing Date: July 21, 2014    Dept: O

Landes, et al. v. Seterus, Inc., et al. (KC066968)

Plaintiffs L. and C. Landes’s MOTION FOR PRELIMINARY INJUNCTION

Respondent: Defendant Seterus, Inc.

TENTATIVE RULING

Plaintiffs L. and C. Landes’s motion for preliminary injunction is GRANTED. The court will set a bond at the hearing.

The court takes judicial notice of the documents submitted by Defendant.

In deciding whether to issue a preliminary injunction, a trial court weighs two interrelated factors: the likelihood the moving party ultimately will prevail on the merits, and the relative interim harm to the parties from the issuance or nonissuance of the injunction. A trial court may not grant a preliminary injunction, regardless of the balance of interim harm, unless there is some possibility that the plaintiff would ultimately prevail on the merits of the claim. (Hunt v. Superior Court (1999) 21 Cal. 4th 984, 999-1000.) PROOF OF FACTS IS ORDINARILY MADE BY AFFIDAVITS OR DECLARATIONS. (CCP 2009.)

Plaintiffs move for a preliminary injunction to enjoin Defendant from foreclosing on their home. Plaintiffs submit the declaration of Craig Landes, attesting that on 6/16/14, Plaintiff spoke to Seterus employee Thomas Leigao over the phone. Thomas advised and instructed Plaintiffs to submit a loan modification application to Seterus because Seterus would then postpone the July 3, 2014 sale date of Plaintiffs’ property. (Landes Decl., Par. 6.)

In opposition, Defendant contends Plaintiffs’ claims are invalid for lack of tender and preemption. Further, Defendant contends that Plaintiffs were told that no postponement would be provided.

PREEMPTION:
Under the Home Owners’ Loan Act of 1933, 12 U.S.C. § 1461 et seq., the federal Office of Thrift Supervision has issued 12 C.F.R. § 560.2, which delineates what is a matter for federal regulation, and what is a matter for state law… On the preempted side, § 560.2 includes: terms of credit, including amortization of loans and the deferral and capitalization of interest and adjustments to the interest rate, § 560.2(b)(4); balance, payments due, or term to maturity of the loan, § 560.2(b)(4); and the processing, origination, servicing, sale or purchase of, or investment or participation in, mortgages, § 560.2(b)(10). ON THE OTHER SIDE, LEFT FOR THE STATE COURTS, IS REAL PROPERTY LAW… THE PROCESS OF FORECLOSURE HAS TRADITIONALLY BEEN A MATTER OF STATE REAL PROPERTY LAW… Given the traditional state control over mortgage foreclosure laws, it is logical to conclude that if the Office of Thrift Supervision wanted to include foreclosure as within the preempted category of loan servicing, it would have been explicit. (Mabry v. Sup. Ct. (2010) 185 Cal.App.4th 208, 229-231.) Similarly, under the National Banking Act, laws regarding foreclosure processes, including Civil Code Section 2923.5, are not preempted by the National Bank Act. (Skov v. U.S. Bank Nat’l Assoc. (2012) 207 Cal.App.4th 690, 702.)

Plaintiffs allege Defendant violated CC 2923.6(c), which is a foreclosure violation, part of real property law that is left to the state regulation, and not preempted by HOLA. Defendant’s preemption argument is without merit.

TENDER:
A borrower need NOT tender the full amount of the mortgage indebtedness as a prerequisite for bringing an action under Civil Code Section 2923.5. (Mabry v. Sup. Ct. (2010) 185 Cal.App.4th 208, 225.)

Since foreclosure has not occurred, Plaintiffs are not required to tender based on a violation of CC 2923.6.

DUAL TRACKING:
Alternatively, in opposition to Plaintiff’s motion, Defendant submits the declaration of Brian Petrarca. Petrarca declares that Defendant “informed Plaintiffs that no such postponement would be provided and that the sale is “moving forward.” (Petrarca Decl., Par. 30.) However, this statement is inadmissible hearsay to the extent Petrarca seeks to claim no statement was given by anyone to the plaintiffs assuring them of a postponement, as they claim. Notably, Defendant failed to submit a declaration from the declarant, Thomas Leigao. Accordingly, the court finds Plaintiffs have demonstrated likely of success on the merits.

As property is unique, Plaintiffs will suffer irreparable harm if an injunction is not granted.

Motion is GRANTED. The court will set a bond at the hearing. Bond should equal the amount of mortgage payments due for the time this matter remains pending. Parties are to confer regarding the amount.