Case Number: KC070609 Hearing Date: December 11, 2018 Dept: O

Plaintiff Xhixing Zhou’s application for preliminary injunction is DENIED. The Temporary Restraining Order (“TRO”) is extinguished.

JUDICIAL NOTICE is taken of defendant Fay Servicing LLC’s exhibits.

Plaintiff Xhixing Zhou (“Plaintiff”) moves for a preliminary injunction to enjoin foreclosure proceedings.

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.)

The Court finds that plaintiff failed to establish likely success on the merits. Plaintiff asserts that a preliminary injunction should issue because defendant Fay Servicing LLC filed a Notice of Default while her loan modification application was pending. (See Declaration of Xhixing Zhou (“Zhou Decl.” ¶¶ 9-10.) This claim is based on violation of the Homeowner’s Bill of Rights (“HBOR”), which prohibits dual tracking.

“Unless otherwise provided, Sections 2923.5, 2923.7, and 2924.11 shall apply only to first lien mortgages or deeds of trust that are secured by owner-occupied residential real property containing no more than four dwelling units. For these purposes, “owner-occupied” means that the property is the principal residence of the borrower and is security for a loan made for personal, family, or household purposes.” (CC § 2924.15.)

The HBOR does not apply to plaintiff’s claims because judicially noticeable documents establish that plaintiff resides at “513 Luminous, Irvine, CA 92603” and not at the real property at issue in this case, “1640 Farmstead Avenue, Hacienda Heights Area, CA 91745.” (See Complaint ¶ 1.) The real property at issue in this case was a rental property and not plaintiff’s “principal residence.” Further, in reply, plaintiff admits that “renters” were released from their “leases” and vacated the property. (See Zhou Decl. ¶ 4.)

Plaintiff’s remaining claims are not supported by her declaration. Noticeably, plaintiff’s declaration does not identify any misrepresentation made by defendant Fay Servicing LLC.

Further, plaintiff’s negligence cause of action fails because plaintiff has not articulated any breach of duty outside the traditional lender-borrower relationship.

[A]s a general rule, a financial institution owes no duty of care to a borrower when the institution’s involvement in the loan transaction does not exceed the scope of its conventional role as a mere lender of money. Thus, for example, a lender has no duty to disclose its knowledge that the borrower’s intended use of the loan proceeds represents an unsafe investment. [] The success of the borrower’s investment is not a benefit of the loan agreement which the lender is under a duty to protect. [] Liability to a borrower for negligence arises only when the lender actively participates in the financed enterprise beyond the domain of the usual money lender.[]

(See Nymark v. Heart Fed. Sav. & Loan Ass’n (1991) 231 Cal.App.3d 1089, 1096.)

Lenders do not have a common-law duty of care in negligence, to offer, consider, or approve a loan modification, to offer foreclosure alternatives, or to handle loans so as to prevent foreclosure. (Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App. 4th 49, 68.)

Accordingly, the request for preliminary injunction is DENIED. The TRO is dissolved.