JAMES A. TEILBORG, District Judge.
Pending before the Court is Plaintiff's Motion for Temporary Injunction (Doc. 45). The Court held a preliminary injunction hearing on March 21, 2012. This Order states the Court's findings of fact and conclusions of law.
In 2006, Plaintiff obtained two loans, one for $442,000 and another loan for $102,000 from Bear Stearns. The loans were secured by at least one Deed of Trust on the real property located at 39658 N. Schnepf Road, Queen Creek, Arizona 85242 (the "Property"). MERS, as nominee for Bear Stearns, was named the beneficiary under the Deed of Trust. Fidelity National Title was the original Trustee.
On January 14, 2008, a Notice of Substitution of Trustee was recorded, in which Quality Loan Service Corporation ("Quality Loan") was appointed successor Trustee. (Doc. 1-1 at 2). The same day, Quality Loan recorded a Notice of Trustee's Sale. (Id. at 4). That Notice scheduled the trustee's sale for April 14, 2008 at 11:00 a.m. (Id. at 4). The trustee's sale has been postponed numerous times since April 14, 2008.
The Trustee's Sale of the Property is currently scheduled to occur on April 9, 2012. (Doc. 54).
On August 24, 2011, Plaintiff filed his Complaint in this Court. Plaintiff also filed an ex parte Motion for Temporary Restraining Order (Doc. 3), wherein Plaintiff requested that the Court enter a Temporary Restraining Order against Defendants, enjoining them from going forward with a Trustee's Sale on the Property. Plaintiff alleged that when the original Trustee's Sale did not occur on April 24, 2008, Defendants failed to comply with Arizona Revised Statutes section 33-810(B) by not making the required declaration pertaining to the status of the Trustee's Sale on the noticed sale date. (Doc. 11 at 2; Doc. 14 at 3). Arizona Revised Statutes section 33-810(B) provides,
Ariz. Rev. Stat. Ann. § 33-810(B).
On October 24, 2011, Defendant JP Morgan Chase Bank, N.A. filed a Response in Opposition to the Application for Temporary Restraining Order, wherein it argued that Plaintiff was not entitled to a temporary restraining order because he defaulted on his loan and his claims were barred by res judicata and/or collateral estoppel because he "has brought the same or similar claims now in at least three courts." (Doc. 15).
On November 7, 2011, this Court held a hearing on Plaintiff's Application for TRO. Plaintiff and counsel for JP Morgan Chase Bank appeared at the hearing. (Doc. 19). After finding that Plaintiff was likely to succeed on the merits that the notice and postponements were defective, the Court entered a Temporary Restraining Order. (Id.).
On February 17, 2012, Plaintiff filed a Motion for Preliminary Injunction (Doc. 45; Doc. 49) reasserting his claims regarding the defective sale. On March 5, 2012, Defendants Citibank, N.A. and Bear Stearns Residential Mortgage Corporation filed a Response, wherein they argue that the Trustee's Sale originally noticed for April 14, 2008 was properly continued and that Plaintiff's claims are frivolous.
After Defendants certified that the Trustee's Sale of the Property was to occur on April 9, 2012, Plaintiff requested a preliminary injunction hearing. The preliminary injunction hearing occurred March 21, 2012.
During the preliminary injunction hearing, Defendants called three witnesses: Bounlet Lovan, Tom Bromell, and Barbara Quiroz. Tom Bromell and Barbara Quiroz testified that they were employees of Priority Posting and Publishing, a company retained by Quality Loan Servicing to conduct Trustee's Sales and announce postponements. Both Mr. Bromell and Ms. Quiroz testified that, although they do not remember postponing the sale of the specific Property at issue in this case, it was their practice to go to Trustee's Sales, and sell properties and announce postponements based on the instructions given by the Trustee.
They both testified that they would then report that the Trustee's Sale and/or Postponement announcement had occurred to Priority Posting and Publishing, who would then create a "Certificate of Postponement," which they would then sign or have an employee of Priority Posting and Publishing electronically sign on their behalf. The signed certificates were accepted into evidence as Exhibits 16-58 at the preliminary injunction hearing.
Bounlet Louvan testified that he is an employee of Priority Posting and Publishing and liaison to Quality Loan, and the file containing the Certificates of Postponement were maintained in the ordinary course of business and consistently maintained in accordance with Priority Posting and Publishing's policies. Mr. Louvan also testified that it is Priority Posting and Publishing's routine practice to have the person who publicly announces the postponement of a Trustee's Sale report that such postponement occurred and to keep Certificates of Postponement as verification that the Trustee's Sale was postponed. Mr. Bromell and Ms. Quiroz further testified that their own records reflect that they did announce the postponements of the Trustee's Sale of the Property as described in the Certificates of Postponement.
Based on the testimony of these three witnesses, the Court finds that the Trustee's Sale of the Property was properly postponed on each and every occasion described in the Certificates of Postponement in accordance with Arizona Revised Statutes section 33-810(B).
To be entitled to a preliminary injunction, Plaintiff must show:
Winter v. Natural Res. Def. Council, 555 U.S. 7, 24-25 (2008). Even if Plaintiff has not demonstrated that he is likely to succeed on the merits, if plaintiff establishes factors [3] and [4], a preliminary injunction is also appropriate when Plaintiff has demonstrated "serious questions going to the merits" and the "hardship balance tips sharply toward plaintiff." Alliance for Wild Rockies v. Cottrell, 632 F.3d 1127, 1134-35 (2011).
In this case, Plaintiff has not shown that he is likely to succeed on the merits on his claim that the Trustee's Sale was not properly postponed in accordance with Arizona Revised Statutes section 33-810(B). During the preliminary injunction hearing, Tom Bromell, Barbara Quiroz, and Bounlet Louvan established that the Trustee's Sale of the Property was properly postponed on each occasion that a Trustee's Sale of the Property was set to occur. Accordingly, Plaintiff is unable to establish a likelihood of success on the merits or serious questions going to the merits of his Notice/defective postponement claim.
Based on the foregoing findings and conclusions,
To the extent Defendants are trying to suggest that Plaintiff could have brought his claims in that prior Complaint and thus are barred by res judicata and/or collateral estoppel, since the Pinal County Superior Court's May 21, 2012 Order dismissing Plaintiff's Complaint, the Trustee's Sale has been postponed at least twenty times. (See Doc. 50-1 at 6). Because Plaintiff's allegations that the Trustee's Sale was not properly postponed in accordance with section 33-810 are based on defects that occurred after May 21, 2010, res judicata and/or collateral estoppel do not apply to block his claims regarding such defects in this action. The Court has been clear that these defective notices were the basis for its Order and if Defendants were to notice a new sale in compliance with Arizona law, such new notice would not be affected by this Court's temporary restraining order. (See Doc. 47 at 1-2 ("Accordingly, Defendants may notice a new sale and proceed with such sale without implicating the Court's Temporary Restraining Order. However, if Defendants intend to conduct a sale based on the original notice and postponements (and further postponements after the hearing), Defendants do so at their peril in view of the fact that the Court has concluded that Plaintiff is likely to succeed on the merits that the notice and postponements were defective."). Accordingly, Defendants' continual reliance on res judicata and/or collateral estoppel in opposing the temporary restraining order and/or preliminary injunction is misplaced.