Estrada v. Real Time Resolutions Inc.

Background

Byron Estrada, representing himself, moved for a temporary restraining order against Real Time Resolutions Inc. and Direct Default Services, LLC. He asked the court to prevent foreclosure of his property, stop additional interest from accruing on the disputed debt, and stop further collection activity. Real Time opposed the motion. Estrada did not appear at the hearing, while defense counsel appeared.

Estrada alleged that he obtained a second mortgage loan in 2006, secured by a deed of trust on the property, and that Real Time was the loan’s current servicer. He had filed claims involving the Truth in Lending Act, federal and California debt-collection laws, promissory estoppel, unfair business practices, wrongful foreclosure, negligent misrepresentation, California Civil Code section 2924.17, financial duress, and the resetting of limitation periods. The opinion states that the court had previously granted Estrada’s motion to dismiss several claims against Direct Default and denied his request to return the case to state court.

Legal standard

The court applied the same standard used for a preliminary injunction. A temporary restraining order is an extraordinary remedy, and the person seeking it must clearly show: a likely success on the merits, likely irreparable harm without relief, a favorable balance of hardships, and consistency with the public interest. A person who shows serious questions about the merits may obtain relief under a lower merits showing only if the balance of hardships strongly favors that person and the other requirements are met.

Court’s analysis

The court concluded that Estrada had not shown likely irreparable harm. Although losing a home through foreclosure can constitute irreparable harm, the court found that no foreclosure was pending. Estrada offered no facts or evidence showing that foreclosure was ongoing or would be initiated. The court also noted Real Time’s explanation that applicable law prohibited it from initiating foreclosure at that time.

The court found that Estrada had not shown that the interest accruing on the defaulted debt or the defendants’ collection activities would cause irreparable harm. The court also noted that Estrada sought monetary relief and fees, including recovery of a $12,874.20 payment that he said was made under financial pressure.

The court further concluded that Estrada had not shown a likely chance of success on the merits. Although the complaint was difficult to follow, the court understood his claims to appear based on the theory that Real Time lacked supported legal ownership of the debt and refused to work toward an equitable solution. The court found that Estrada presented no evidence supporting that theory and noted that similar theories about a defendant’s ownership of mortgage notes had been rejected by California courts and other courts in the Northern District of California.

Because Estrada had not established irreparable harm or a likely chance of success, the court did not address the remaining requirements for injunctive relief.

Disposition

The court denied Estrada’s motion for a temporary restraining order without prejudice to filing a noticed motion for a preliminary injunction. The opinion does not state that the court finally resolved Estrada’s underlying claims.