Case Number: EC062360    Hearing Date: August 22, 2014    Dept: A

Petrosyan v HSBC Bank USA

OSC REGARDING PRELIMINARY INJUNCTION

Calendar: 11
Case No: EC062360
Date: 8/22/14

MP: Plaintiff, Luiza Petrosyan
RP: Defendants, HSBC Bank, et al.

RELIEF REQUESTED:
Order restraining defendants from conducting a foreclosure or sale of the Plaintiff’s property.

DISCUSSION:
This case arises from the Plaintiff’s claim that the Defendants are improperly attempting to foreclose on her property because there is a dispute over the amount that she owes.
On June 4, 2012, the Plaintiff appeared with an ex parte application for a temporary restraining order to halt the sale of property. The Court granted the temporary restraining order and an OSC regarding the request for a preliminary injunction for June 27, 2014. The hearing was continued to August 22, 2014.

CCP section 527(a) requires a motion for a preliminary injunction to establish with facts in affidavits or in a verified complaint that there are grounds to issue a preliminary injunction. Declarations may be used under CCP section 2015.5 because they are equivalent to an affidavit.
Under CCP section 526(a), a preliminary injunction may be issued in the following cases:

1) When it appears by the complaint that the plaintiff is entitled to the relief demanded, and the relief, or any part thereof, consists in restraining the commission or continuance of the act complained of, either for a limited period or perpetually.
2) When it appears by the complaint or affidavits that the commission or continuance of some act during the litigation would produce waste, or great or irreparable injury, to a party to the action.
3) When it appears, during the litigation, that a party to the action is doing, or threatens, or is about to do, or is procuring or suffering to be done, some act in violation of the rights of another party to the action respecting the subject of the action, and tending to render the judgment ineffectual.
4) When pecuniary compensation would not afford adequate relief.
5) Where it would be extremely difficult to ascertain the amount of compensation which would afford adequate relief.
6) Where the restraint is necessary to prevent a multiplicity of judicial proceedings.
7) Where the obligation arises from a trust.

The Plaintiff has the burden of establishing grounds exist for the injunction with evidence offered under oath. Ancora-Citronelle Corp. v. Green (1974) 41 Cal. App. 3d 146, 148. The granting or denial of a preliminary injunction rests in the sound discretion of the Court and is based upon a consideration of all the particular circumstances of each individual case. Froomer v. Drollinger (1960) 183 Cal. App. 2d 787, 788-789. If granted, the preliminary injunction does nothing more than to preserve the status quo until the merits of plaintiffs’ claim can be adjudicated. Id.
The Plaintiff must first show that they she is entitled to the relief requested. Injunctive relief may be available to prevent an improper private sale of encumbered property on such grounds as that there is no actual default justifying the sale, Bisno v. Sax (1959) 175 Cal App 2d 714, that the secured transaction is itself invalid, Daniels v. Williams (1954) 125 Cal App 2d 310, or that inadequate notice of default was given, Lupertino v. Carbahal (1973) 35 Cal App 3d 742. If this is established, a preliminary injunction is appropriate to maintain the status quo pending the trial on the merits because the loss of residential real property is assumed to be an irreparable harm and the loss cannot be compensated in monetary damages. Jessen v. Keystone Savings & Loan Assn. (1983) 142 Cal.App.3d 454.

The Plaintiff argues that the notice of default is invalid because it does not identify the correct amount that is due. A trustee’s sale in a non-judicial foreclosure must strictly comply with the procedures for foreclosing on a security by a trustee’s sale pursuant to a deed of trust in Civil Code section 2924 et seq. Miller v. Cote (1982) 127 Cal. App. 3d 888, 894. Civil Code section 2924f(b)(7), before a sale under the power of sale in a deed of trust may occur, a notice of sale must be given that contains “a statement of the total amount of the unpaid balance of the obligation secured by the property to be sold.”
The notice of sale indicates that the unpaid balance is $929,317.72. The Plaintiff attempts to establish that this amount is incorrect with a copy of her mortgage statement for January 16, 2014. The mortgage statement indicates that the principal balance is $688,759.15. However, the statement indicates that this is not the payoff balance. Further, the statement indicates that $318,531.04 is due, of which $291,260.49 is past due.
The Plaintiff claims that the amount due of $318,531.04 added to the principal of $688,759.15 is $1,007,290.19 and that this amount exceeds the unpaid balance of $929,317.72 identified in the notice of sale. However, the Plaintiff’s argument fails to understand that the $318,531.04 is not an amount owed in addition to the principle. Instead, a portion of the $318,579.15 due will be applied to the principal and the rest will be applied to the interest that has accrued on the loan. This becomes clear when the statement is analyzed because it indicates that the regular monthly payment is $4,151.92 of which $1,732.93 will be applied to the principle, $1,519.96 will be applied to the interest, and $908.03 will be used to pay taxes and insurance. Accordingly, the Plaintiff’s attempt to do math offers no grounds to find that the notice of sale is incorrect because the argument is based on a lack of understanding regarding loans and the manner in which payments are applied to the principal and interest in a multi-year loan agreement.
Further, the Plaintiff does not offer more than speculation that the amount is incorrect. The Plaintiff does not offer evidence of the amount she has paid in order to establish that the amount in the notice of sale is incorrect because the Defendants have not credited her account for payments made. The Plaintiff provides no accounting of her payments and offers no copies of bank or checks to demonstrate that the amount is incorrect in light of the amounts that she has paid.
As such, the Plaintiff offers no admissible evidence that the $929,317.72 amount is incorrect.

Further, the Plaintiff’s attempt to argue that the amounts are incorrect ignores a substantial defect in her claims, which is that the Plaintiff cannot establish the essential element of her own performance of the loan agreement at issue. Based on the $291,260.49 past due amount in her January 16, 2014 statement, it appears that the Plaintiff has not made her loan payments for a substantial amount of time, i.e., years. The Plaintiff admits this in paragraph 12 of her Complaint, in which she alleges that she has not made payments for years. The Plaintiff offers no evidence to explain her failure to make loan payments for years. Since the Plaintiff offers on evidence that she has attempted to make any payments, the Plaintiff does not establish that she is entitled to the relief sought in her pleadings.

Further, the Plaintiff offers no evidence that she has tendered any amount due on her loan. Under California law, the Plaintiff must allege that she tendered the amount of the secured indebtedness to the Defendant to plead any cause of action for irregularity in the foreclosure sale procedure. Abdallah v. United Sav. Bank (1996) 43 Cal. App. 4th 1101, 1109 (affirming an order sustaining a demurrer without leave to amend in a case claiming that the foreclosure and sale of a home was improper). A valid tender must be nothing short of the full amount due the creditor. Gaffney v. Downey Sav. & Loan Ass’n (1988) 200 Cal. App. 3d 1154, 1165. The Court of Appeal found that the following summary of the tender rule describes this requirement:

The rules which govern tenders are strict and are strictly applied, and where
the rules are prescribed by statute or rules of court, the tender must be in such
form as to comply therewith. The tenderer must do and offer everything that
is necessary on his part to complete the transaction, and must fairly make
known his purpose without ambiguity, and the act of tender must be such that
it needs only acceptance by the one to whom it is made to complete the
transaction. Id.

The underlying principle for the tender rule is that “equity will not interpose its remedial power in the accomplishment of what seemingly would be nothing but an idle and expensively futile act, nor will it purposely speculate in a field where there has been no proof as to what beneficial purpose may be subserved through its intervention.” Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal. App. 3d 112, 118.
The same reasoning applies in the pending case. It would be an idle and expensively futile act to permit the Plaintiff to claim that there was an irregularity in the foreclosure sale procedure when the Plaintiff cannot repay the loan amount, irrespective of whether the notice identifies the correct amount.

Therefore, the Court will deny the Plaintiff’s request for a preliminary injunction because she does not establish that the notice of sale is incorrect, that she can prevail on her claims, or that she has tendered the amount due in order to bring a claim based on an irregularity in the foreclosure sale procedures.

RULING:
DENY application for a preliminary injunction.