United States District Court, D. Oregon
WILLIAM X. NIETZCHE, et al., Plaintiffs,
FREEDOM HOME MORTGAGE CORPORATION, et al., Defendants.
MICHAEL H. SIMON UNITED STATES DISTRICT JUDGE.
Motion for Temporary Restraining Order (ECF 2) and Motion to
Stay Court Proceedings and for Sanctions (ECF 10), which the
Court construes as a motion for a temporary restraining order
to stay related state court proceedings, came before the
Court on December 10, 2018. The matters were scheduled for
hearing at 8:00 a.m. The Courtroom Deputy previously had
confirmed by email and telephone with Plaintiff William
Nietzche the date, time, and place of the hearing. Mr.
Nietzche did not express any objection and confirmed
Plaintiffs' availability and intention to attend the
hearing. Mr. Nietzche also confirmed that he would notify the
other two plaintiffs, his parents Mr. and Mrs. Kinney, of the
date, time, and location of the hearing.
personnel and counsel for Defendants who have appeared in
this action were present in court at 8:00 a.m., but none of
the Plaintiffs were present. The Courtroom Deputy looked for
Plaintiffs at the courthouse entrance and checked for any
telephone messages from Plaintiffs. The Court waited until
8:15 a.m. to begin the hearing without Plaintiffs.
Plaintiffs did not appear at the hearing, the Court
nonetheless addressed the motions on the merits. The Court
explained that it had read all the materials submitted by
Plaintiffs and understood the facts and legal issues. The
Court does not believe that oral argument by any party would
have been helpful. Defendants did not provide oral argument.
The Court orally denied the motions and stated a written
order would follow.
approximately 10:00 a.m. Plaintiffs arrived in court. Mrs.
Kinney indicated that she believed the hearing had been
scheduled for 10:00 a.m., and Mr. Nietzche acknowledged that
due to the stress of dealing with the case, he may have
misinformed his parents of the time of the hearing. Mr.
Nietzche stated that he had additional information prepared.
The Court did not permit oral argument by Plaintiffs but
allowed them to file their additional written materials,
noting the Court would construe them as a motion to
reconsider the Court's oral ruling from the bench at the
8:00 a.m. hearing.
Court has reviewed Plaintiffs' additional written
materials, which focus primarily on the line of cases
involving when MERS is named as a beneficiary in a trust
deed. Plaintiffs argue that MERS was improperly named as a
beneficiary of the Deed of Trust at issue in this case. This
argument fails for two reasons. First, Plaintiffs
misunderstand the Deed of Reconveyance, the document that
they believe is evidence of MERS' involvement as a
beneficiary. Second, the Deed of Reconveyance does not relate
to the Deed of Trust or Promissory Note at issue in this
cite to the Deed of Reconveyance, ECF 1 at 45, as evidence of
MERS' involvement as a beneficiary in this case. In 2002,
Plaintiffs Mr. and Mrs. Kinney borrowed money from Freedom
Mortgage Corporation dba Freedom Home Mortgage Corporation
(“Freedom”), which was secured by a Deed of Trust
on the Kinneys' real property. In 2004, Plaintiffs
refinanced and paid off Freedom's loan. It is the new
loan (after the refinance) and the Deed of Trust securing the
new loan that is the subject of this lawsuit.
Deed of Reconveyance was signed after Mr. and Mrs. Kinney
paid off Freedom's mortgage. It serves to extinguish
Freedom's lien on the Kinneys' property-it
essentially releases the Deed of Trust and transfers (or
“reconveys”) the property title to the Kinneys.
This is a routine document issued to demonstrate that a
lender no longer has a security interest in a subject real
property. See, e.g., 19A West's Legal Forms,
Real Estate Transactions, Residential § 41:1 (“The
most common method of discharging mortgages and extinguishing
their liens is by payment of the mortgage debt after it
becomes due. In states where a mortgage has the character of
a conveyance of the legal estate, a release, discharge, or
satisfaction usually has the form of a deed of reconveyance
or release of the mortgaged premises.”); Legal Almanac:
Home Mortgage Law Primer § 1:18 (“If the deed of
trust is used ‘in the nature' of a mortgage, upon
full payment of the note, the trustee generally executes a
‘deed of reconveyance,' or ‘release
deed,' which reconveys whatever title the trustee may
have had back to the grantor/borrower.”).
confusing about the 2004 Deed of Reconveyance is that in its
recital of the terms of the original Deed of Trust recorded
in 2002 relating to the Kinneys' loan with Freedom, it
recites that MERS was listed as the beneficiary. This appears
to be a scrivener's error. Although MERS was frequently
listed as the beneficiary of trust deeds at that time, for
the trust deed between the Kinneys and Freedom, MERS was not
the beneficiary. The beneficiary was Freedom. ECF 45 at 22.
The Deed of Reconveyance purports to be reciting the terms of
the trust deed as it was recorded in June 2002, and MERS was
not listed as the beneficiary. Thus, it appears that MERS was
not named as a beneficiary or later assigned an interest, but
was merely erroneously recited in the Deed of Reconveyance as
being the named beneficiary in the original 2002 Deed of
Trust between the Kinneys and Freedom. Because MERS was not
named as a beneficiary, Plaintiffs' arguments relating to
MERS are inapplicable.
regardless of the status of MERS with respect to the Deed of
Trust relating to the Freedom loan, that loan was paid off in
2004 and all interest of any lien holder of that Deed of
Trust was extinguished with the filing of the Deed of
Reconveyance. Therefore, even if that Deed of Trust had a
defect in its title history, it is irrelevant to this case
because that trust deed was extinguished when the loan was
paid off in 2004. A new Deed of Trust was signed in March
2004 between the Kinneys and Beneficial Oregon, Inc.
(“Beneficial”), in which Beneficial was named as
the beneficiary. This loan was later assigned, but there is
no allegation or evidence that any interest was ever
purportedly assigned to MERS with respect to this Deed of
Trust and related Promissory Note. It is the 2004 Deed of
Trust, Promissory Note, later assignments, and loan servicing
that are at issue in this case.
deciding whether to grant a motion for temporary restraining
order, courts look to substantially the same factors that
apply to a court's decision on whether to issue a
preliminary injunction. See Stuhlbarg Int'l Sales Co.
v. John D. Brush & Co., 240 F.3d 832, 839 n.7 (9th
Cir. 2001). A preliminary injunction is an
“extraordinary remedy that may only be awarded upon a
clear showing that the plaintiff is entitled to such
relief.” Winter v. Nat. Res. Defense Council,
Inc., 555 U.S. 7, 22 (2008). A plaintiff seeking a
preliminary injunction generally must show that: (1) he or
she is likely to succeed on the merits; (2) he or she is
likely to suffer irreparable harm in the absence of
preliminary relief; (3) the balance of equities tips in his
or her favor; and (4) that an injunction is in the public
interest. Id. at 20. The Supreme Court's
decision in Winter, however, did not disturb the
Ninth Circuit's alternative “serious
questions” test. All. for the Wild Rockies v.
Cottrell, 632 F.3d 1127, 1131-32 (9th Cir. 2011). Under
this test, “‘serious questions going to the
merits' and a hardship balance that tips sharply toward
the plaintiff can support issuance of an injunction, assuming
the other two elements of the Winter test are also
met.” Id. at 1132.
Court finds that Plaintiffs fail to show either a likelihood
of success on the merits or even serious questions going to
the merits, even considering Plaintiffs' additional
written materials submitted after the hearing. The Court
therefore declines to reach the remaining factors relevant to
deciding a temporary restraining order. Plaintiffs'
motions for a temporary restraining order (ECF 2, 10) are