United States District Court, W.D. Washington, Seattle
EARL F. ANDERSON and MARY ELLEN ANDERSON, TWIN CEDARS TRUST, Plaintiffs,
GOLF SAVINGS BANK, et al., Defendants.
ORDER DENYING PLAINTIFFS' MOTION FOR A PRELIMINARY INJUNCTION, GRANTING DEFENDANTS' MOTION TO DISSOLVE TRO, AND TERMINATING REMAINING MOTIONS
JOHN C. COUGHENOUR, District Judge.
This matter comes before the Court pursuant to its order requesting additional briefing (Dkt. No. 37), Plaintiffs' motion for a preliminary injunction (Dkt. No. 38), the response of Defendant Quality Loan Service Corporation (Dkt. No. 41), and the opposition of remaining Defendants (Dkt. No. 43). The Court also considers pending motions to dissolve an Island County Temporary Restraining Order ("TRO") (Dkt. No. 24), Plaintiffs' motion for a TRO (Dkt. No. 26), and Plaintiffs' motion to file an over-length and late brief (Dkt. No. 30).
Having thoroughly considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary and hereby DENIES Plaintiffs' motion for a preliminary injunction, GRANTS Defendants' motion to dissolve the Island County TRO (Dkt. No. 24), and TERMINATES the remaining pending motions (Dkt. Nos. 26, 30) for the reasons explained herein.
The Court does not recite the detailed factual background as stated in its previous order. See Dkt. No. 37. Briefly, Plaintiffs oppose the nonjudicial foreclosure of their residence located at 323 Bambi Drive, Camano Island. On October 16, 2014, in Island County Superior Court, Plaintiffs filed their original Complaint, as well as a motion for a TRO to block the imminent foreclosure sale. Dkt. No. 24, p. 2. The TRO was entered by the Island County court, without an expiration date. Id. A foreclosure sale of the residence is currently set for February 13, 2015. Dkt. No. 38, p. 1.
Defendant Bayview Loan Servicing, joined by Defendant JP Morgan Chase, moved to dissolve the otherwise-indefinite Island County TRO. Dkt. No. 24. Plaintiffs moved for an additional TRO from this Court enjoining the foreclosure sale until the merits of this case have been resolved. Dkt. No. 26. Finding Plaintiffs' request for a TRO inappropriate, the Court ordered additional briefing as to whether Plaintiffs should be entitled to a preliminary injunction rather than a TRO. Dkt. No. 37. The present motion for a preliminary injunction is understood to constitute Plaintiffs' response to that Court order.
Until now, despite the continued existence of a state court TRO, whether or not Plaintiffs are entitled to a preliminary injunction has not been considered. When the Island County Superior Court granted a TRO, it struck Plaintiffs' proposed findings regarding a preliminary injunction and set a show cause hearing on the issue. See Dkt. No. 24, p. 2. Though the show cause hearing was set in state court, the case was removed before the hearing took place. Id. As a result, the trustee sale of Plaintiffs' residence has been blocked by a state court TRO with no expiration date. See Dkt. No. 24.
Plaintiffs' argument against the foreclosure of their residence relies entirely on a reconveyance document containing a scrivener's error. In 2005, Plaintiffs purchased two properties: (1) Lot 3 of Island County Short Plat No. 81/45.XXXXX-XXX-XXXX, a vacant lot, and (2) Lot 56 of Camano Laguna Visa, the residence located at 323 Bambi Drive. See Dkt. No. 33, p. 2. The two lots were secured by separate mortgage loans from Defendant Golf Savings Bank. Id. In 2007, Plaintiffs refinanced the mortgage on the vacant lot, resulting in a full repayment. Id. at 3. However, a document entitled "Full Reconveyance" filed February 5, 2007 erroneously listed Lot 56, the residence, as having had "the obligations secured by the Deed of Trust... fully satisfied, " though it was the vacant lot which had been paid for. See Dkt. No. 17-3. This error was later corrected to show the correct property description, Lot 3. See Dkt. Nos. 25-1, 39-1 (captioned: "RERECORDED TO CORRECT SCRIVNER'S ERROR LEGAL DESCRIPTION").
Plaintiffs continue to assert that their obligations under the residence mortgage are "fully discharged" and their "debt fully satisfied." Dkt. No. 38, p. 2. Their arguments rely entirely on the mistaken "Full Reconveyance" document, despite their knowledge of the subsequent correction. Plaintiffs offer no other support for their assertion that the mortgage on their residence has been satisfied. See Dkt. Nos. 26, 38.
A. Preliminary Injunction
Under Fed.R.Civ.P. 65(a),  the Court may issue a preliminary injunction after providing notice to the adverse party. A request for a preliminary injunction is evaluated under the familiar four-part test articulated in Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008). In so evaluating, courts weigh whether or not the party seeking the injunction has demonstrated that: (1) he is likely to suffer irreparable harm in the absence of preliminary relief, (2) the balance of equities tips in his favor, (3) he is likely to succeed on the merits, and (4) an injunction is in the public interest. Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008).
1. Likelihood of irreparable harm
First, the Court considers the threat of irreparable harm to Plaintiffs. This factor does not require a showing of actual harm, but simply "a strong threat of irreparable harm before trial." Diamontiney v. Borg, 918 F.2d 793, 795 (9th Cir. 1990) (internal citation omitted). Analysis of this factor leans in Plaintiffs' favor, as the February 13, 2015 trustee sale will result both in a loss of their home and waiver of the right to contest the sale. As Plaintiffs put it, this would nearly amount to their ...