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Ditech Financial LLC v. American West Village II Owners Association

United States District Court, D. Nevada

August 22, 2017

DITECH FINANCIAL LLC, et al., Plaintiff(s),
v.
AMERICAN WEST VILLAGE II OWNERS ASSOCIATION, et al., Defendant(s).

          ORDER

         Presently before the court is defendant Saticoy Bay LLC Series 8829 Cornwall Glen's (“Saticoy”) “emergency motion for preliminary injunction.” (ECF No. 10).

         I. Background

         On August 25, 2004, Doreen Stewart purchased property commonly known as 8829 Cornwall Glen Ave. (“the property”). (ECF No. 1). The property was encumbered by a deed of trust. Countrywide Home Loans was the trustee, and Mortgage Electronic Registration Systems (“MERS”) was the beneficiary. (Id.). The property is subject to Covenants, Conditions, and Restrictions in favor of American West Village II Owners Association (“the HOA”). (Id.).

         Plaintiffs allege that “[i]n September 2004, Federal National Mortgage Association (“Fannie Mae”) acquired ownership of the Note and Deed of Trust.” (Id.). On January 8, 2016, MERS assigned its beneficial interest in the deed of trust to Ditech Financial LLC (“Ditech”). (Id.). Plaintiffs allege that Ditech was the servicer of the loan for Fannie Mae at the time. (Id.).

         On February 16, 2016, Nevada Association Services, Inc. (“NAS”) recorded a notice of delinquent assessment lien against the property on behalf of the HOA. (ECF No. 1-2). On April 6, 2016, NAS recorded a notice of default and election to sell on behalf of the HOA. (Id.) On April 12, 2017, NAS recorded a notice of foreclosure sale on behalf of the HOA. (Id.)

         On May 9, 2017, the HOA conducted a non-judicial foreclosure sale, at which Saticoy was the successful bidder. (ECF No. 1). On May 18, 2017, a certificate of foreclosure sale subject to redemption was recorded, listing Saticoy as the purchaser at the HOA foreclosure sale. (ECF No. 1-3). On July 11, 2017, NAS issued a foreclosure deed in favor of Saticoy. (Id.). Saticoy alleges in its motion for injunctive relief that the deed was recorded on July 17, 2017.[1]

         Saticoy seeks to enjoin plaintiffs Ditech and Fannie Mae from proceeding with a foreclosure sale of the property. Plaintiffs' foreclosure sale is currently set for August 24, 2017.

         II. Legal Standard

         “An injunction is a matter of equitable discretion . . . an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief. Id. at 22. Courts must consider the following elements in determining whether to issue a temporary restraining order and preliminary injunction: (1) a likelihood of success on the merits; (2) likelihood of irreparable injury if preliminary relief is not granted; (3) balance of hardships; and (4) advancement of the public interest. Winter v. N.R.D.C., 555 U.S. 7, 20, 129 S.Ct. 365, 374 (2008). The test is conjunctive, meaning the party seeking the injunction must satisfy each element. However, “‘serious questions going to the merits' and a balance of hardships that tips sharply towards the [movant] can support issuance of a preliminary injunction, so long as the [movant] also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest.” Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011) (citing Winter, 129 S.Ct. at 392).

         “The purpose of a temporary restraining order is to preserve the status quo before a preliminary injunction hearing may be held; its provisional remedial nature is designed merely to prevent irreparable loss of rights prior to judgment.” Estes v. Gaston, no. 2:12-cv-1853-JCM-VCF, 2012 WL 5839490, at *2 (D. Nev. Nov. 16, 2012) (citing Sierra On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1422 (9th Cir. 1984)). Thus, a court may issue a temporary restraining order only when the moving party provides specific facts showing that immediate and irreparable injury, loss, or damage will result before the adverse party's opposition to a motion for preliminary injunction can be heard. Fed.R.Civ.P. 65(b). Further, the movant's attorney must certify in writing efforts made to give notice and reasons why it should not be required. Id.

         III. Discussion

         Here, Saticoy's motion is titled a motion for a preliminary injunction. However, the requested relief is an ex parte order enjoining plaintiffs from conducting a foreclosure sale. Thus, the court considers Saticoy's motion to be a motion for a temporary restraining order under F.R.C.P. 65(b). See LR 2-2(b) (“For each type of relief requested or purpose of the document, a separate document must be file and a separate event must be selected for that document.”).

         Saticoy's motion satisfies the elements for granting a temporary restraining order. If the motion is not granted, Saticoy will be subjected to immediate and irreparable harm that far outweighs any potential harm suffered by plaintiffs. Saticoy's motion also demonstrates a reasonable likelihood of success on the merits and that the public interest favors the granting of a temporary restraining order. Further, Saticoy's affidavit satisfies F.R.C.P. 65(b)(1)(B), as it states efforts to give notice to plaintiffs and the reasons why notice should not be required on these facts.

         Saticoy will suffer irreparable harm if the court does not grant its motion for a temporary restraining order before plaintiffs' opposition to injunctive relief can be heard. If the court does not grant the motion before August 24, 2017, plaintiffs will presumably proceed with the foreclosure sale. Any purchaser at plaintiffs' sale will attempt to assert title free-and-clear of Saticoy's interest in the property. A temporary restraining order would prevent irreparable harm by preserving ...


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