WEN v. GreenPoint Mortgage Funding, Inc.

Background

Wen sought to prevent GreenPoint Mortgage Funding, Inc., Real Time Resolutions, Inc., and RRA CP Opportunity Trust 1 from foreclosing on her property. The court had previously granted a temporary restraining order blocking a foreclosure sale until October 19, 2021, and asked the parties to address whether that order should become a preliminary injunction.

Wen alleged that she entered into a $100,000 home-equity line of credit with GreenPoint and did not receive periodic statements from Real Time Resolutions after it became the loan servicer. She argued that the lack of statements left her unaware of the payment amount, payment method, and payment recipient. Her complaint asserted claims for breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment, violation of the Rosenthal Fair Debt Collection Practices Act, unfair competition under California law, and fraud.

Legal Standard

To obtain a preliminary injunction, a plaintiff generally must show a likelihood of success on the merits, likely irreparable harm without an injunction, a favorable balance of equities, and that an injunction serves the public interest. Under a sliding-scale version of that test, a strong showing on the balance of hardships can sometimes compensate for a weaker showing of likely success, but the plaintiff must still raise serious questions on the merits.

Analysis

The court concluded that Wen could not satisfy the first requirement. The evidence showed that her last loan payment was made on or about April 28, 2011, and that she acknowledged in September 2011 that she had defaulted because she lost her job. GreenPoint assigned the loan to the Trust in September 2012, with Real Time Resolutions as servicer. Wen later communicated with the defendants through counsel in 2013 and again attributed her default to her job loss. The court found no evidence that the defendants’ later failure to provide monthly statements caused the original default.

The court also rejected Wen’s argument that the alleged failure to provide statements excused her continued nonpayment. Under the contract principles discussed by the court, a breach excuses the other party’s performance only if it is material—that is, if it frustrates the purpose of the contract. The court found no evidence that Wen could or would have made payments if she had received statements, or that she had the ability to cure the default. It also noted that she did not produce evidence of trying to make a payment or ask the defendants about the loan’s status, payment amount, or cure process.

Because Wen had not shown even a serious question on the merits, the court stated that the other preliminary-injunction factors could not overcome that deficiency. The court therefore denied the motion for a preliminary injunction, lifted the temporary restraining order, and stated that the order disposed of Docket Nos. 8 and 15. Judge Edward M. Chen signed the order.