Perun v. Carrington Mortgage Services, LLC ( 2021 )

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 STEVE PERUN, 10 Case No. 21-cv-03888-RS Plaintiff, 11 v. ORDER DENYING TEMPORARY 12 RESTRAINING ORDER AND CARRINGTON MORTGAGE SERVICES, GRANTING MOTION TO DISMISS 13 LLC, et al., 14 Defendants. 15 16 I. INTRODUCTION 17 Plaintiff Steve Perun seeks a Temporary Restraining Order (“TRO”) to prevent the 18 foreclosure of his home, scheduled for tomorrow. Perun did not prevail on a Motion to Dismiss 19 (“MTD”) on all his claims, and his subsequent amended Complaint does not help his case 20 sufficiently to change the outcome. Thus, Carrington’s current Motion to Dismiss is granted, and 21 consequently, because Perun cannot show he is likely to succeed on the merits, his application for 22 a TRO is denied. 23 II. BACKGROUND 24 Perun fell behind on his mortgage payments, and the lenders sent a notice of Default in 25 January 2021. He applied for a modification, and the lenders aver they sent him a letter on 26 February 10, 2021, notifying him that his application was complete, as required by 12 C.F.R. § 27 1024.41(b). Next, the lenders aver they sent a letter effectively denying his application on 1 sale, which is considered a loan modification option. He claims he never received that letter, and 2 they must not have sent it, in violation of § 1024.41(c).1 A copy of the letter the lenders prepared 3 was introduced as part of their earlier MTD, which was granted because it was implausible the 4 lenders prepared the letter and did not send it. Even if they had not sent it, violations of the 5 relevant statute (12 C.F.R. § 1024.41(c)) require actual damages to be actionable, and Perun 6 cannot show actual damages because of the subsequent modification offers, among other reasons. 7 See Dkt. No. 32, Order Granting Mot. to Dismiss, at 6 n.2. 8 III. LEGAL STANDARD 9 Rule 12(b)(6) governs motions to dismiss for failure to state a claim. A complaint must 10 contain a short and plain statement of the claim showing the pleader is entitled to relief. Fed. R. 11 Civ. P. 8(a). While "detailed factual allegations" are not required, a complaint must have sufficient 12 factual allegations to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 13 U.S. 662, 678, (2009) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570, (2007)). A Rule 14 12(b)(6) motion tests the legal sufficiency of the claims alleged in the complaint. Parks Sch. of 15 Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Thus, dismissal under Rule 12(b)(6) 16 may be based on either the "lack of a cognizable legal theory" or on "the absence of sufficient 17 facts alleged" under a cognizable legal theory. UMG Recordings, Inc. v. Shelter Capital Partners 18 LLC, 718 F.3d 1006, 1014 (9th Cir. 2013). When evaluating such a motion, courts generally 19 "accept all factual allegations in the complaint as true and construe the pleadings in the light most 20 favorable to the nonmoving party." Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). 21 However, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory 22 statements, do not suffice." Iqbal, 556 U.S. at 678. 23 24 1 At times Perun also claims the lenders violated § 1024.41(b), which requires notification when the lender receives an application and determines whether it is complete or not. See, e.g., Dkt. No. 25 48, Application for TRO, at 12. Here, that was the February 10 letter, which Perun has consistently acknowledged receiving. See Dkt. No. 48-1, Declaration of Perun, at 3; Dkt. No. 23, 26 First Amended Complaint, at Para. 21. Thus, his references to violations of subsection (b) will be disregarded as error, as the clear import of his numerous acknowledgements of receiving the 27 February 10 letter is he is not in fact alleging the lenders violated this section as well. 1 A TRO may be granted upon a showing “that immediate and irreparable injury, loss, or 2 damage will result to the movant before the adverse party can be heard in opposition.” Fed. R. 3 Civ. P. 65(b)(1)(A). The purpose of such an order, as a form of preliminary injunctive relief, is to 4 preserve the status quo and prevent irreparable harm “just so long as is necessary to hold a hearing, and no longer.” Granny Goose Foods, Inc. v. Brotherhood of Teamsters, 415 U.S. 423, 5 439 (1974). A request for a TRO is evaluated by the same factors that generally apply to a 6 preliminary injunction, see Stuhlbarg Int'l. Sales Co. v. John D. Brushy & Co., 240 F.3d 832, 839 7 n. 7 (9th Cir. 2001), and as a form of preliminary injunctive relief, a TRO is an “extraordinary 8 remedy” that is “never granted as of right.” Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 9 24 (2008). Rather, the moving party bears the burden of demonstrating that “he is likely to 10 succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary 11 relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” 12 Winter, 555 U.S. at 20. Alternatively, if the moving party can demonstrate the requisite likelihood 13 of irreparable harm, and show that an injunction is in the public interest, a preliminary injunction 14 may issue so long as there are serious questions going to the merits and the balance of hardships 15 tips sharply in the moving party's favor. Alliance for Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 16 (9th Cir. 2011) (concluding that the “serious questions” version of the sliding scale test for 17 preliminary injunctions remains viable after Winter). 18 IV. DISCUSSION 19 A. Motion to Dismiss 20 Carrington’s MTD is granted. Perun attempts to show he can succeed where he previously 21 failed by noting it is conceivable the lenders prepared the February 26 denial letter but did not 22 send it because there were issues with the application, even though it had been certified as 23 complete.2 He adds to his argument that the lenders asked for supplemental documents in March 24 and April. The much more plausible explanation for those communications is that they related to 25 26 2 The lenders’ request that the letter be incorporated by reference is granted, for the same reasons 27 it was granted before. See Dkt. No. 32, Order Granting Mot. to Dismiss, at 4-5. 1 the subsequent modification offers. Indeed, the lenders had already deemed his application 2 complete in the February 10 letter. It would be nonsensical for the lenders to come to that 3 conclusion, prepare a letter denying the application, and then hold the letter while they asked for 4 more documents. This fatally undercuts all of his claims, and entitles the lenders once more to 5 dismissal. 6 Perun also argues the subsequent communications in March and April mean even if the 7 lenders sent the letter, they were “dual-tracking” him. Yet, the subsequent communications do not 8 constitute the start of a foreclosure process sufficient to qualify as dual-tracking. Perun also 9 attempts to argue the loan modification offers were in bad faith, and did not constitute a 10 meaningful opportunity to obtain loss mitigation options. The modification offer required him to 11 pay $16,000 before reducing the payments on $171,437.90 in arrearages (on a $1,499,250 12 mortgage). As such, it represented a meaningful loss mitigation option. Recall that a home 13 liquidation sale is also considered a modification option, which is practically equivalent to the 14 foreclosure Perun seeks to avoid here (the main difference being less impact on one’s credit 15 score). Plaintiff does not have a right to a particular result. See Civil Code § 2923.4. 16 Perun is not likely to be able to demonstrate a violation of § 1024.41 – all of those claims 17 depend on his not having received the letter, which he almost certainly would not be able to show. 18 Beyond that, he also would not be able to show any damages. See Dkt. No. 32, Order Granting 19 Mot. to Dismiss, at 6 n.2. His other claims are denied for the same reasons explained in the earlier 20 order – nothing in the new complaint or application for TRO changes the analysis of those claims. 21 B. Application for a TRO 22 Consequently, Perun’s application for a TRO must be denied because he cannot show one 23 of the required elements: likelihood of success on the merits. In fact, he does not even address 24 certain of his claims in the TRO. While he can establish he is likely to suffer irreparable harm in 25 the absence of relief the test for a TRO starts with a list of required elements, per Winter. 555 U.S. 26 at 20. Even under the sliding scale approach Perun must be able to show there are serious 27 questions going to the merits. This he cannot do. As explained above in granting the MTD, his 1 request for a TRO must fail as well. 2 V. CONCLUSION 3 For the reasons set forth above, the motion to dismiss the Second Amended Complaint is 4 || granted and the application for a TRO is denied. Leave to amend is denied. Perun has had several 5 attempts to amend, but without success. Also, the case will soon be largely or entirely mooted by 6 the foreclosure. Further amendment would be futile. AmerisourceBergen Corp. v. Dialysist W., 7 || Inc., 465 F.3d 946, 951 (9th Cir. 2006). 8 9 || ITISSO ORDERED. 10 11 || Dated: December 7, 2021 KAA a (12 RICHARD SEEBORG 13 Chief United States District Judge © 15 16 = 17 Z 18 19 20 21 22 23 24 25 26 27 28 ORDER DENYING TRO AND GRANTING MTD CASE No. 21-cv-03888-RS