KANDIS A. WESTMORE, Magistrate Judge.
Plaintiff Jeff Velasquez filed the instant case, alleging that under the terms of the Deed of Trust and Promissory Note, Plaintiff's principal balance could not increase beyond a maximum of 125% of the original principal balance of $220,000.00, or $275,000.00. (First Amended Compl. ("FAC") ¶ 10, Dkt. No. 11.) Plaintiff asserts that in May 2017, Plaintiff received a notice that his principal balance and deferred interest had grown to $335,000. (FAC ¶ 11.)
Plaintiff originally asserted claims for declaratory relief and violation of California Business & Professions Code § 17200. (Dkt. No. 1 at 12.) Defendant Wells Fargo, N.A. then removed the case, and filed a motion to dismiss the complaint. (Dkt. Nos. 1, 7.) On July 24, 2017, Plaintiff filed an amended complaint, asserting claims for declaratory relief and violation of California Civil Code § 1788.17. (FAC ¶¶ 15, 19.) On July 28, 2017, Plaintiff filed an ex parte application for a temporary restraining order ("TRO application"), to restrain a foreclosure sale of Plaintiff's property scheduled for August 2, 2017. (Plf.'s Mot. at 4, Dkt. No. 14-3.) Defendant filed an opposition on July 31, 2017. (Def.'s Opp'n, Dkt. No. 22.)
The Court deems the matter suitable for disposition without hearing pursuant to Civil Local Rule 7-1(b).
Federal Rule of Civil Procedure 65(b) allows a court to issue a temporary restraining order to prevent "immediate and irreparable injury, loss, or damage . . . to the movant." The standard for issuing a temporary restraining order is "substantially identical" to that of a preliminary injunction. Stuhlbarg Int'l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001). Thus, as the moving party, Plaintiff has the burden of establishing 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." Klein v. City of San Clemente, 584 F.3d 1196, 1199 (9th Cir. 2009) (internal quotation omitted). All four factors must be established for an injunction to issue. Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011).
The Court finds that Plaintiff is unable to establish that he is likely to prevail on the merits or that he can demonstrate a serious question going to the merits of his claims. Here, Plaintiff's claims are premised on his contention that the Promissory Note does not allow Plaintiff's principal balance to go over $275,000 cap, or 115% of the original principal balance of $220,000. (Plf.'s Mot. at 3.) Plaintiff appears to rely on the following language of the adjustable rate mortgage note:
(Velasquez Decl., Exh. A at 3
The fact that Plaintiff owes $297,474.30, however, does not mean that Plaintiff's principal balance is $297,474.30. Such an amount could, for example, include interest, late charges, and escrow amounts, all separate and apart from the principal balance. Indeed, Defendant provides a proof of claim dated February 18, 2015, which was filed in Plaintiff's recent bankruptcy proceeding. (Newman Decl., Exh. C, Dkt. No. 22-1.) The proof of claim seeks $276,300.36 in total, of which the principal balance makes up $207,558.70, well below the $275,000 threshold. (Id. at 4.) The remainder of the amount due includes interest, late charges, attorney's fees, advertisement costs, title costs, property inspection fees, escrow shortages. (Id. at 5-6.) Defendant also provides an account summary, dated May 1, 2017, which lists the unpaid principal balance as $203,576.80, again below the $275,000 threshold.
To the extent Plaintiff intends to assert that the total amount owed is the principal balance, the Court notes that Plaintiff's counsel has twice brought lawsuits alleging similar claims, i.e. that the total payoff amount of a loan exceeded a "cap" in the loan documents that provided that the principal amount cannot exceed a certain percentage of the original amount loaned. In both cases, the argument was soundly rejected. In Nadaf-Rahrov v. Shellpoint Mortgage Servicing, the district court described the argument as "frivolous," explaining that:
Case Nos. 16-cv-2112-RS, 16-cv-6323-RS, 2016 U.S. Dist. LEXIS 162796, at *5 (N.D. Cal. Nov. 23, 2016).
Likewise, in Diamos v. Fay Servicing, LLC, the district court rejected the plaintiff's argument that the "principal balance" cap of $931,500 was exceeded because the current loan balance was $1,264,223.48. Case No. 16-cv-5164-DMR, 2016 WL 7230896, at *3 (N.D. Cal. Dec. 14, 2016). In arguing that any unpaid interest was added to the principal balance, the plaintiff pointed to language similar to that of the instant case, which stated that interest could become capitalized into the unpaid principal balance if the borrower's monthly payments were less than the interest payment. Id. at *3-4. The district court found that such language did not suggest that all accrued interest became part of the principal balance. Id. at *4. Instead, such language:
The Court, therefore, finds that Plaintiff has failed to show that he is likely to succeed on the merits, or that there are serious questions going to the merits. Because Plaintiff must establish all four elements to receive a temporary restraining order, Plaintiff's TRO application is DENIED. See Aniel v. GMAC Mortg., LLC, No. C 12-4201 SBA, 2012 WL 5373388, at *8 (N.D. Cal. Oct. 30, 2012) (denying TRO application because the "[p]laintiffs have not met their burden to establish a likelihood of success on the merits or raised `serious questions' going to the merits, and because they must show each of the requisite elements to obtain a TRO"); Michael J. Weber Living Trust v. Wells Fargo Bank, N.A., No. 13-cv-542-JST, 2013 WL 1196959, at *6 (N.D. Cal. Mar. 25, 2013) (denying TRO application because "the [p]laintiff has failed to establish that it is likely to succeed on the merits of its claim, or even that there is any serious question of the merits, [and therefore] it has failed to establish one of the required elements for preliminary injunctive relief"); Galindo v. BSI Fin. Servs., Inc., Case No. 17-cv-21-LHK, 2017 WL 3007081, at *9 (N.D. Cal. July 14, 2017) (denying TRO application where the plaintiffs failed to establish a likelihood of success on the merits of their claims).
For the reasons stated above, the Plaintiff's TRO application is DENIED.
IT IS SO ORDERED.