United States District Court, D. Oregon
GARY C. GOSHA, an individual; and KIT M. GOSHA, an individual, Plaintiffs,
BANK OF NEW YORK MELLON CORPORATION FKA THE BANK OF NEW YORK, as Trustee CWALT 2005-72, a Delaware Corporation; BAYVIEW LOAN SERVICING LLC, a Florida Corporation; and CLEAR RECON CORP., a California Corporation, Defendants.
OPINION & ORDER
A. HERNÁNDEZ, UNITED STATES DISTRICT JUDGE
Plaintiffs Gary C. Gosha and Kit M. Gosha bring this action
against Defendants Bank of New York Mellon, Bayview Loan
Servicing LLC, and Clear Recon Corp., alleging breach of
contract; unfair trade practices under Or. Rev. Stat. §
(“ORS”) 646.608; violations of the Fair Debt
Collection Practices Act, 15 U.S.C. § 1692(f)(6); and
violations of the Real Estate Settlement Procedures Act, 12
U.S.C. § 2605(e). Plaintiffs also seek a declaratory
judgment regarding: (1) the rights of the parties under the
Oregon Trust Deed Act, ORS 86.705, et seq.; and (2)
Defendants Bank of New York's standing under the Note and
Deed of Trust. Compl. ¶¶ 6, 63, ECF 1. With the
filing of their complaint, Plaintiffs moved for a Temporary
Restraining Order (“TRO”) to prevent the
foreclosure sale of their home.
April 15, 2019, the Court issued a TRO restraining Defendants
from conducting the foreclosure sale of Plaintiffs' home,
then scheduled for April 23, 2019. Opinion & Order, ECF
18. On April 24, 2019, the Court held a preliminary
injunction hearing. Mins. Proceedings, ECF 33. Because
Plaintiffs are likely to succeed on the merits of their
breach of contract claim and suffer irreparable harm in the
absence of an injunction, the Court enjoins Defendants from
pursuing the pending non-judicial foreclosure of
claims arise out of various alleged procedural defects
rendering Defendants' current non-judicial foreclosure of
Plaintiffs' home unlawful, including but not limited to a
breach of the notice provisions of the Deed of Trust. Compl.
¶¶ 1-5. Plaintiffs defaulted on their loan in
September 2011, after their loan payments increased from $1,
500 to $2, 550 per month and their loan servicer allegedly
told them that help was only available if they were in
default. Compl. ¶ 29. Their servicer subsequently issued
a “Notice of Attempt to Accelerate” and
“threatened foreclosure.” Compl. ¶¶
29-30. What followed was seven years of conflict and
litigation between Plaintiffs and Defendants over the
foreclosure of Plaintiffs' home.
Plaintiffs' prior suit was dismissed under Fed.R.Civ.P.
12(b)(6), Defendants voluntarily rescinded their initial
non-judicial foreclosure proceedings. Compl. ¶ 18. To
begin the non-judicial foreclosure process a second time,
Defendant Bayview-the loan servicer- invited Plaintiffs to
participate in the Oregon Foreclosure Avoidance Program
(OFAP) in June of 2018. Compl. ¶ 25. The OFAP conference
ended “with an adverse result for” Plaintiffs
because Bayview was provided with a certificate of
compliance, required for them to pursue the non-judicial
foreclosure under Oregon law. Compl. ¶ 43.
October 10, 2018, Defendant Clear Recon Corp. filed its
second Notice of Default in Washington County. Compl. Ex. J.
On October 29, 2018, Plaintiffs sent a dispute letter to
Defendant Clear Recon Corp. demanding that the foreclosure be
rescinded. Compl. ¶ 47. The next day, Defendant Clear
Recon Corp. rescinded the second notice of default and
acceleration of the debt. Compl. ¶ 48, Ex. K.
December 22, 2018, Plaintiffs were served with another
Trustee's Notice of Sale commencing the pending
non-judicial foreclosure at the heart of the present case.
Compl. ¶ 49, Ex. A. The Notice indicates that the
current beneficiary of the Deed of Trust is Defendant Bank of
New York Mellon and the trustee is Defendant Clear Recon
Corp. Id. at 4-5. The Notice reflects delinquent
payments by Plaintiffs beginning in September of 2011, with a
total required to reinstate of $247, 892.26. Id.
Along with the Notice of Sale, Defendants issued a third
Notice of Default, which was recorded in the official records
of Washington County on December 20, 2018. Clear Recon Decl.
¶¶ 7, 9, Ex. B, ECF 21. Since Defendants began the
present judicial foreclosure, Plaintiffs have received
unsolicited mail, calls, and flyers regarding the sale of
their home. Compl. ¶¶ 56-57.
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.”
Winter v. Natural Res. Def. Council, Inc., 555 U.S.
7, 20 (2008). The plaintiff “must establish that
irreparable harm is likely, not just
possible[.]” Alliance For The Wild Rockies v.
Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011). The court
may apply a sliding scale test, under which “the
elements of the preliminary injunction test are balanced, so
that a stronger showing of one element may offset a weaker
showing of another.” Id. Thus, a party seeking
an injunction may show greater irreparable harm as the
probability of success on the merits decreases. Id.
(noting also that the relevant test in the Ninth Circuit is
described as the “serious questions” test where
the likelihood of success is such that “serious
questions going to the merits were raised and the balance of
hardships tips sharply in plaintiff's favor”)
(internal quotation marks and brackets omitted).
party requesting a preliminary injunction must carry its
burden of persuasion by a “‘clear
showing'” of the four required elements set forth
above. Mazurek v. Armstrong, 520 U.S. 968, 972
(1997) (per curiam); Lopez v. Brewer, 680 F.3d 1068,
1072 (9th Cir. 2012) (quoting Mazurek, 520 U.S. at
972) (A “‘preliminary injunction is an
extraordinary and drastic remedy, one that should not be
granted unless the movant, by a clear showing,
carries the burden of persuasion.'”).
now seek a preliminary injunction, arguing that the pending
non-judicial foreclosure of their home is unlawful. In part,
Plaintiffs argue that Defendants breached the terms of the
Deed of Trust by failing to comply with the notice provisions
in § 22 before initiating the present non-judicial
foreclosure. Pls. Mot. TRO 2, ECF 2. In response, Defendants
argue that Plaintiffs are unlikely to succeed on the merits
of this claim and point to an earlier notice sent to
Plaintiffs that complies with the notice provisions of §
22. Def. Opp'n TRO 14-15, ECF 19. Defendants further
argue that the balance of the equities and the public
interest factors both weigh in their favor. Hr'g Tr.
29:22-23, ECF 34. On the record before it, the Court agrees
with the Plaintiffs and, after considering each of the
Winter factors, finds that the issuance of a
preliminary injunction is appropriate in this case.
Plaintiffs are likely to succeed on the merits on their
breach of contract claim. Section 22 of the Deed of Trust
provides that the Lender must give the Borrower notice prior
to acceleration following the ...