Ernest v. Select Portfolio Servicing, Inc

Background

Frobie Ernest alleged that Select Portfolio Servicing, Inc. mishandled a forbearance request concerning a residential mortgage on Ernest’s home. The complaint stated that the loan-forbearance issues began during the COVID-19 pandemic, that a notice of default was recorded on July 11, 2023, and that a notice of trustee’s sale was recorded on February 29, 2024.

Ernest filed the complaint and an application for a temporary restraining order on April 8, 2024, seeking to stop a trustee’s sale scheduled for April 10, 2024, at 1:00 p.m. Although he labeled the application “ex parte,” his declaration described efforts to notify SPS. The court therefore evaluated the application as a noticed motion under the standards for a preliminary injunction, which the court described as more favorable to Ernest than the standards for a true emergency application without notice.

Court’s analysis

The court explained that a preliminary injunction is an extraordinary remedy. A plaintiff generally must show a likelihood of success, likely irreparable harm, that the balance of the equities favors an injunction, and that an injunction serves the public interest. Alternatively, relief may be available when serious questions exist, the balance of hardships sharply favors the plaintiff, and the plaintiff also shows likely irreparable harm and a public benefit.

The court found that Ernest had not shown irreparable harm. The complaint indicated that he had known for about nine months that SPS considered him in default and for more than one month that a trustee’s sale was scheduled. Nevertheless, he waited until 5:52 p.m. on April 8 to seek relief for a sale scheduled less than 48 hours later. The application did not explain the delay, which the court said seriously weakened the required showing of imminent harm.

The court also found Ernest’s showing on the apparent merits unpersuasive. It said the complaint did not provide the particular facts required for fraud or mistake under Federal Rule of Civil Procedure 9(b), including facts about what SPS allegedly said about the forbearance program and when it said it. The court also found tensions between Ernest’s allegations and other allegations in the complaint concerning information SPS provided, reinstatement quotes, his request for a more affordable payment option, and his ability to make the quoted payments. The opinion discussed alleged violations of Sections 2923.7 and 2924 of the California Civil Code.

Disposition

The court denied the temporary restraining order. The opinion did not enter a final ruling on the underlying claims.