2014-00162063-CU-OR

Michael Monterrosa vs. PNC Bank

Nature of Proceeding: Motion for Preliminary Injunction

Filed By: Sims, W. Christopher

Plaintiffs’ Application for Preliminary Injunction is granted on the same terms and
conditions as the TRO.

Plaintiff is ordered to post a bond in the amount of $20,000, or alternatively to make
monthly payments of $2,135.54 directly to defendant pending the trial of this action.

On April 17, 2014 the court issued a TRO/OSC enjoining the pending foreclosure of
plaintiffs’ residence at 2153 Kavine Way, Folsom, CA.

Plaintiffs contend that defendants breached a HAMP loan modification contract and
acted in contravention of Civil Code section 2923.6 and 2923.55. Plaintiffs contend
that after they completed the trial plan payments of $2,135.54 they were denied a
permanent loan modification and were forced to complete a new trial plan with higher
payments and to accept a permanent loan modification with higher payments.
Plaintiffs allege defendant violated Civil Code section 2923.6 when it failed to provide a
written denial and recorded a notice of trustee sale while the loan application was
pending. Plaintiffs also contend defendant violated Civil Code 2923.55 when it filed a
notice of default without exploring other options to avoid disclosure. (Declarations of
Michael Monterrosa, Cheranne Nobis)

In opposition, defendant PNC Mortgage contends that plaintiffs cannot establish
irreparable harm, and that if the court issues an injunction, it should require plaintiff to
post a bond. PNC offers no evidence in opposition to refute plaintiffs’ evidence that it
violated the foreclosure statutes, but rather relies on a case with distinguishable facts
in which the court denied the injunction, finding that plaintiff was making a transparent
attempt to buy time to delay the foreclosure. See Alcatraz v Wachovia Mort. FSB
(E.D. 2009) 592 F. Supp.2nd 1296, 1301. However, in this case plaintiffs have
provided evidence, not disputed by defendant, that defendant was “dual tracking” by
proceeding with a notice of foreclosure sale while also engaging in the loan
modification process.

In deciding whether to enter a preliminary injunction, the Court must evaluate two
interrelated factors: (1) the likelihood that the applicant will prevail on the merits at trial,
and (2) the interim harm that the applicant will likely suffer if preliminary relief is not
granted, as compared to the likely harm that the opposing party will suffer if the
preliminary injunction issues. (See, e.g., Langford v. Superior Court (Gates) (1987) 43
Cal.3d 21, 28.) One of these two factors may be accorded greater weight than the
other depending on the applicant’s showing. (See Common Cause v. Bd. of
Supervisors (1989) 49 Cal.3d 432, 447.)

In this case, plaintiffs would suffer irreparable harm if they were to lose their residence
before the merits of their claims were adjudicated. Any harm to the defendant in
granting the injunction is far outweighed by the damage to plaintiffs if the injunction
were to be denied. However, the Court is not persuaded that no bond should be
required pending the trial of the action. Plaintiffs Complaint alleges they should have
been given a permanent loan modification of $2,135.54 per month. By prevailing in
the action, plaintiffs would presumably obtain a monthly payment in this amount.

California Code of Civil Procedure Section 529(a) provides: “On granting an injunction,
the court or judge 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 tp be specified, the party may sustain by reason of the injunction…[emphasis
added].” (CCP §529(a).) The purpose of the bond is to compensate the defendant for
all reasonably foreseeable damages that may be proximately caused by issuance of
the injunction. Top Cat Productions, Inc. v. Michael’s Los Feliz (2002) 102 Cal.App.4th
474, 478; Abba Rubber Co. v. Seaquist (1991) 235 Cal.App.3d 1, 14.) The trial court’s
function is to estimate the harmful effect which the injunction is likely to have on the
restrained party, and to set the undertaking at that sum. (See Abba Rubber Co., supra,
at 14.)

Plaintiffs’ declarations requesting that no bond be required are conclusionary. Both
plaintiffs state “I request that the Court not order a substantial bond as it will create a
hardship for me and my spouse to pay for said bond or obtain a bond from a surety as
we do not have the financial ability to do so.” (Declarations of plaintiffs, paragraph 40)
Absent evidence of plaintiff’s income and their indigency, defendants are entitled to be
compensated pending trial for the fair market rental value of the residence and
attorneys fees. Moreover, if plaintiffs are unable to pay at least the amount of the trial
modification, they will be unable to prevail in this action. Therefore, the Court is
ordering that plaintiffs post a bond in the amount of $20,000, or alternatively make
payments to defendant in the amount of $2,135.54 per month pending the trial of the
action. If plaintiffs fail to make timely payments under the alternative, the defendant
may make a motion to dissolve the preliminary injunction.

The prevailing party shall prepare a formal order for the Court’s signature pursuant to
C.R.C. 3.1312. The Court will sign the formal order upon proof of payment of the
undertaking or in the alternative, the first payment of $2,135.54 to defendant. If the
monthly payment option is chosen the parties are ordered to meet and confer to agree
upon the time and other terms of making the monthly payments.

If the parties are unable to agree on the time and other terms, the prevailing party shall
make an appointment on the court’s ex parte calendar and the court will set the time
and other terms of the monthly payments.