Nowaid v. American Capital Group, LLC

Background

Ali Nowaid and Breeze Capital Group LLC asked the court to stop American Capital Group, LLC from conducting a foreclosure sale of property located at 1183 Central Blvd., Hayward, California. Nowaid obtained a loan in August 2022 and signed a deed of trust in favor of American Capital. The loan matured on October 1, 2024.

Plaintiffs said Nowaid obtained replacement financing through CV3 Financial Services but that American Capital obstructed his efforts to obtain a payoff demand. American Capital disputed that account and said it provided multiple payoff quotes before and after maturity. The court noted that American Capital submitted declarations about the dates of the alleged payoff requests but did not attach the actual payoff letters or communications.

According to the record before the court, American Capital ultimately provided a payoff demand on December 7, 2024, seeking $880,374. A notice of default was recorded on March 12, 2025, and a notice of trustee’s sale was recorded on June 17, 2025, seeking more than $981,000 through foreclosure.

The court had previously granted a temporary restraining order and ordered American Capital to show why a preliminary injunction should not issue. At the hearing, American Capital asked to reopen the record to submit email communications and signed payoff letters. The court denied that request because American Capital did not show good cause or diligence, and because Breeze Capital would have been prejudiced after being unable to respond to the proposed evidence.

Ownership and Claims

The court found no basis to grant a preliminary injunction to Nowaid. Official county records showed that Nowaid deeded the property to Pine Country, LLC, on February 27, 2024. The court therefore found that Nowaid was not likely to suffer irreparable harm from the foreclosure sale based on his remaining status as the borrower.

The court reached a different conclusion for Breeze Capital. Breeze Capital submitted an August 11, 2024 quitclaim deed transferring the property back to it. The court held that the deed was valid between the parties even though it was not recorded, so the lack of recording alone did not defeat Breeze Capital’s standing to challenge the foreclosure sale.

American Capital argued that Breeze Capital lacked standing to assert claims under California Civil Code § 1671, the implied covenant of good faith and fair dealing, and California’s Unfair Competition Law. The court concluded that Breeze Capital had standing under the Unfair Competition Law because it was likely to lose its interest in the property if the foreclosure proceeded.

The court also found serious questions about the merits of Breeze Capital’s Unfair Competition Law claim. Breeze Capital presented evidence that American Capital engaged in unfair and deceptive practices, and American Capital had not adequately refuted that account. The court stated that Breeze Capital did not need to allege that it had tendered payment to pursue this claim and seek the preliminary injunction.

Ruling

The motion for preliminary injunction was granted. American Capital and its agents were enjoined, during the pendency of the action, from conducting a trustee’s sale of the property.

The court also denied American Capital’s request to supplement the record. The court granted American Capital’s request for judicial notice of the county-record document showing Nowaid’s transfer of the property. The court exercised its discretion not to require Breeze Capital to post a bond because American Capital submitted no evidence of the specific monetary harm it would suffer from the injunction.