United States District Court, D. Oregon
A. HERNÁNDEZ United States District Judge
Michal Irvin and Suzanne Irvin bring this action against
Defendants HSBC Bank USA, Wells Fargo Bank, and Quality Loan
Service Corporation of Washington (“Quality”),
alleging breach of contract, violation of 12 C.F.R. §
1024.36, intentional interference with economic relationship,
violation of the Oregon Unfair Trade Practices Act, and
breach of the covenant of good faith and fair dealing. Compl.
1, ECF 1. Plaintiffs also seek a declaratory judgment
regarding the rights of Defendants to foreclose on
Plaintiffs' home. Compl. ¶ 36. In conjunction with
their Complaint, Plaintiffs filed a Motion for a Temporary
Restraining Order (“TRO”) to restrain Defendants
from conducting a foreclosure sale of Plaintiff's home
currently scheduled for November 9, 2017. Mot. TRO, ECF 2.
motion largely revolves around an alleged unlawful assignment
of the beneficial interest under the Deed of Trust associated
with their home loan. Mot. TRO ¶¶ 1-10. Plaintiffs
allege that they entered into a thirty-year loan with
Hyperion Capital Group, LLC, in November 2006 to purchase
their home, the property located at what is commonly known as
9160 SW 161st Ave., Beaverton, Oregon 97007. Compl.
¶¶ 1, 11. Plaintiffs claim that they defaulted on
their loan in July 2013 while trying to qualify for a loan
modification through Defendant Wells Fargo Bank. Compl.
¶ 12. Years later, around July 7, 2017, Defendant
Quality provided Plaintiffs with a Trustee's Notice of
Sale. Compl. ¶ 29; Ex. 2.
allege that Defendant Quality “has no authority, power,
standing or otherwise to initiate a non-judicial
foreclosure.” Mot. TRO ¶ 4. They allege that the
assignment purportedly giving Defendant Quality the power to
enforce the Deed of Trust is the result of an unlawful
assignment of both the Note and Deed of Trust by Mortgage
Electronic Registration System (MERS) to Defendant HBSC Bank
on August 11, 2011. Compl. ¶ 14; Ex. 3. Plaintiffs
claim, therefore, that Defendant Quality is not the
“duly appointed trustee of the deed of trust” and
cannot pursue a non-judicial foreclosure. Mot. TRO ¶ 4.
To prevent Defendant Quality from conducting the wrongful
foreclosure sale, Plaintiffs bring this claim. Compl. ¶
Rule 65(b), a TRO may issue without notice to the opposing
party or its attorney only if the movant shows (1) through
“specific facts in an affidavit or a verified
complaint” that “immediate and irreparable
injury, loss, or damage will result to the movant before the
adverse party can be heard in opposition[, ]” and (2)
that “the movant's attorney certifies in writing
any efforts made to give notice and the reasons why it should
not be required.” Fed.R.Civ.P. 65(b)(1).
standard for a temporary restraining order (TRO) is
"essentially identical" to the standard for a
preliminary injunction. Chandler v. Williams, No. CV
08-962-ST, 2010 WL 3394675, at *1 (D. Or. Aug. 26, 2010)
(citing Stuhlbarg Int'l Sales Co, v. John D. Brushy
& Co., 240 F.3d 832, 839 n. 7 (9th Cir. 2001));
see also Daritech, Inc. v. Ward, No. CV-11-570-BR,
2011 WL 2150137, at * 1 (D. Or. May 26, 2011) (applying
preliminary injunction standard to motion for TRO). “A
plaintiff seeking a preliminary injunction must establish
that he is likely to succeed on the merits, that he is likely
to suffer irreparable harm in the absence of preliminary
relief, that the balance of equities tips in his favor, and
that an injunction is in the public interest.”
Am. Trucking Ass'ns Inc. v. City of L. A., 559
F.3d 1046, 1052 (9th Cir. 2009) (quoting Winter v. Nat.
Res. Defense Council, Inc., 555 U.S. 7, 21 (2008)).
“The elements of [this] test are balanced, so that a
stronger showing of one element may offset a weaker showing
of another. For example, a stronger showing of irreparable
harm to plaintiff might offset a lesser showing of likelihood
of success on the merits.” Alliance for the Wild
Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir.2011).
Plaintiffs have met both requirements of Rule 65(b). First,
as required by Rule 65(b)(2), Plaintiffs' counsel
certified in writing his efforts to give notice to
Defendants. Jeffrey Long Decl. at 2, ECF 2. Second,
Plaintiffs demonstrate they are likely to suffer significant
irreparable harm from the imminent sale of their home. This
Court has repeatedly held that the loss of a home may result
in irreparable harm. See Dawson v. Bank of New York
Mellon, 3:16-cv-01427-HZ, 2016 WL 3592438, at * 1 (D.
Or. July 18, 2016) (finding non-judicial foreclosure would
cause irreparable harm from the loss of the plaintiff's
real property); Gosha v. Bank of New York Mellon
Corp., 3:16-CV-00073-BR, 2016 WL 9211686, at *1 (D. Or.
Jan. 25, 2016) (granting a TRO where it was a close question
on the merits but the potential harm to plaintiffs- who were
senior citizens on a fixed income-was great); Barnett v.
BAC Home Loan Servicing, L.P., 772 F.Supp.2d 1328, 1338
(D. Or. Feb. 23, 2011) (finding the scheduled foreclosure
sale would likely cause irreparable harm). Plaintiffs have
lived in their home for 11 years. Compl. ¶ 2. They have
retrofitted and customized this home to adapt to the needs of
their special needs children. Compl. ¶ 3. The loss of
this property, therefore, would likely cause substantial,
irreparable harm to Plaintiffs. Because this sale is
scheduled for November 9, 2017, this harm may result before
Defendants can be heard on this matter.
the merits of Plaintiffs' claims, it is not clear from
the pleadings whether Plaintiffs will succeed. However, the
severity of the harm that Plaintiffs would face with the loss
of their home offsets their lesser showing of this element of
the Winter test. See Cottrell, 632 F.3d at
1131; Gosha, 2016 WL 9211686, at *1. The harm that
Plaintiffs face also outweighs any potential harm to
Defendants from postponing the foreclosure sale.
the public interest factor in this case is neutral.
“When the reach of an injunction is narrow, limited
only to the parties, and has no impact on non-parties, the
public interest will be at most a neutral factor in the
preliminary injunction analysis.” Stormans v.
Selecky, 586 F.3d 1109, 1138-39 (9th Cir. 2009). But, if
the impact of the injunction reaches beyond the parties and
potentially impacts the public, the public interest is
relevant to the analysis. Id. Here, this factor is
not relevant to the analysis: Plaintiffs' request is
limited to restraining Defendants from conducting the
foreclosure sale and does not involve any non-parties to the
a TRO may issue only if the movant “gives security in
an amount that the court considers proper to pay the costs
and damages sustained by any party found to have been
wrongfully enjoined or restrained.” Fed.R.Civ.P. 65(c).
The Court has discretion as to the amount of security, if
any, that should be required. Johnson v. Couturier,
572 F.3d 1067, 1086 (9th Cir. 2009). While Plaintiffs fail to
address the security issue at all, the Court orders
Plaintiffs to pay a security in the amount of $4, 000 to
offset costs sustained by Defendants in the event they have
been wrongfully restrained.
motion for a temporary restraining order  is granted. This
order will expire within 14 days of its issuance.
Plaintiffs' are further ordered to pay a ...