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TIMOTHY L. MCCANDLESS, ESQ. SBN 147715LAW OFFICES OF TIMOTHY L. MCCANDLESS1881 Business Center Drive, Ste. 8ASan Bernardino, CA 92408Tel: (909) 890-9102Fax: (909) 382-9956
Attorney for Plaintiff (s)ERIC SHOCKLEY and CHARLES FETTERS
SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF CONTRA COSTA
ERIC SHOCKLEY and CHARLES FETTERS, Plaintiff,
V.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.;ALEXANDER ZAN HAMILTON, dba EAGLE HOME MORTGAGE; AMERITECH MORTGAGE INC., IRINA PETROVNA TRAJANOVICH, President of AMERITECH; ZORAN TRAJANOVICH, Chairman of Ameritech, CITIGROUP GLOBAL MARKETS REALTY CORP., HSBC MORTGAGE SERVICES, NDEX WEST LLC, and DOES 1 through 50 inclusive,
Defendants.
Case No.: C11-00865
EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE RE PRELIMINARY INJUNCTION; SUPPORTING MEMORANDUM OF POINTS AND AUTHORITIES AND SUPPORTING DECLARATION OF ERIC SHOCKLEY; CHARLES FETTERS; CERTIFICATE OF EX PARTE; DECLARATION OF TIMOTHY MCCANDLESS; [PROPOSED] ORDER
DATE: May 11, 2011TIME: 1:30 p.m.DEPT: 60
EX PARTE APPLICATION
This matter cannot wait to be heard on a regular notice because a non-judicial foreclosure
– trustee sale has been scheduled for May 16, 2011 Plaintiffs ERIC SHOCKLEY and
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CHARLES FETTERS [hereinafter PLAINTIFFS] hereby applies for a restraining order and
order to show cause why a preliminary injunction should not be issued, restraining and enjoining
defendants MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; AMERITECH
MORTGAGE INC., CITIGROUP GLOBAL MARKETS REALTY CORP., HSBC
MORTGAGE SERVICES, NDEX WEST LLC their agents, employees and all persons
associated with them and/or acting in concert with them, from taking any action whatsoever to
foreclose on PLAINTIFFS’ home. Plaintiffs’ home is that certain real property commonly
known as. 203 S. 13th Street, Richmond, CA 94084. The Legal descriptions are as follows: APN:
544120002; NYSTROMS ADD N LOTS 34 TO 37 BLK.
Plaintiffs will apply for an Order to Show Cause (“OSC”) why a preliminary injunction
should not be granted enjoining defendants MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC.; AMERITECH MORTGAGE INC., CITIGROUP GLOBAL MARKETS
REALTY CORP., HSBC MORTGAGE SERVICES, NDEX WEST LLC [“Foreclosing
Defendants”], their agents, employees, representatives, attorneys, and all persons acting in
concert or participating with them from foreclosing and/or selling Plaintiffs’ property located at
203 S. 13th Street, Richmond, CA 94084.
Concurrently, plaintiffs hereby apply for a hearing date to obtain a preliminary
injunction. To be certain, loss of the Plaintiffs’ property would constitute irreparable harm,
whereas, if the court issues the Temporary Restraining Order, there will be no prejudice to the
Defendants whatsoever.
This application is made, because pecuniary compensation would not afford adequate
relief for the loss of Plaintiffs' Home, that Defendants are seeking to foreclose on Plaintiffs'
Home in violation of the rights of Plaintiffs and that great and irreparable injury will result to
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Plaintiffs before the matter can be heard on notice. Defendants’ action to proceed with the sales
in violation of the rights of plaintiffs. Plaintiffs have previously obtained an order for similar
relief in this case but with a different lawsuit and most of these parties, have been dismissed.
The application is based upon this notice; the Complaint on file; the attached memorandum of
points and authorities; and any oral argument, which may be heard at the time of the hearing of
this matter.
Dated: May 10, 2011THE LAW OFFICES OF TIMOTHY MCCANDLESS
By _____________________________
Timothy McCandless, Attorney for PlaintiffsERIC SHOCKLEY AND CHARLES FETTERS
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I.
INTRODUCTION/BACKGROUNDAll of these facts are established are in the complaint filed on April 11, 2011 which is on
file in this matter and plaintiffs respectfully requested on their declaration that the courts take
judicial notice of said complaint.
On or about June 7, 2006 financed their purchase through LIME FINANCIAL by virtue
of a Trust Deed and Notes securing the Loans. [See Exhibit “A” to plaintiffs’ complaint]. When
plaintiffs chose to refinance this loan, BRENDA FRASIER, a broker, represented defendant
AMERITECH assisted them with the paperwork. On June 13, 2006, the Deed of Trust [“DOT”]
was recorded at Contra Costa Recorder’s office. Plaintiffs chose to execute this DOT in 2006
and refinanced their home in 2006. Brenda Frasier, the broker, suggested Ameritech for a 30-
year note to pay this debt. They were advised that they could not obtain the 30-year note but
were able to obtain a new first with a prepayment penalty due in two years. At her suggestion,
they obtained a second loan which had a balloon payment.
Plaintiffs were also instructed by Frasier, broker for defendant AMERITECH that the
loan had to be only under plaintiff ERIC SHOCKLEY’S name. Reluctantly, plaintiffs followed
AMERITECH’s advice. Plaintiffs discovered later that their broker did not execute the required
Mortgage Loan Origination with the borrower. There is no evidence of one being executed and
under California law, a broker is required to execute this document because it establishes the
relationship between the broker and client and the services be provided. Thus, plaintiffs allege
that defendant AMERITECH violated California Business and Professions Code 10240-10248.3,
10241. Moreover, plaintiffs allege that the underwriting for this loan was flawed. There was no
determination whatsoever of plaintiffs’ ability to repay the loan with complete disregard for the
Guidance Letters issued by Federal Agencies and even Federal and State Laws. Another
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important factor was, at the time the loan was being executed, it stated that plaintiffs’ income
was $9,380.00 per month. Plaintiffs’ income was purposely inflated.
Plaintiff alleges, there were no initial disclosures for either interest rate. Defendant
AMERITECH violated California Civil Code Civil Section 1916.7 10(c). Plaintiffs were not
given full disclosure about the adjustable payment and adjustable rate loan. Plaintiffs did not
know that their monthly payments could go substantially up. Plaintiffs eventually discovered
that DEFENDANT LIME was a wholesaler of loans and sold their loan to .J.P. CHASE and
HSBC.
Because the two-year prepayment was coming due, plaintiffs immediately contacted
CHASE to do a loan modification. CHASE did modify the loan but never reduced the principal.
They lowered the interest rate which was not helpful since they increased the payment by finally
setting up the impound account. Because of this, plaintiffs defaulted on the loan. Plaintiffs
allege that on June 15, 2009 Defendants NDEX and CHASE HOME FINANCE allege that
Plaintiffs became in default of their loan. On June 17, 2009, defendant NDEX caused the
Notice of Default [NOD] to be recorded and on this NOD, instructions were to contact CHASE
HOME FINANCE for payment arrangements. CHASE and NDEX are not on the Deed of Trust.
. Plaintiffs, on August 17, 2009, arranged to have a Forensic Loan Audit Examination.
This report shows the glaring deficiencies of what has transpired regarding the loan and loan
modification. The report speaks for itself and plaintiffs allege that the defendants, all of them,
did not comply with foreclosure laws and more importantly, blatantly provided a loan that was
set up to fail. [See Exhibit 1 to plaintiffs’ Declaration re Ex parte and Exhibit D to their
complaint].
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Foreclosure laws were not complied with. No proper assignment has taken place. Thus,
the Notice of Default and all subsequent actions are unlawful because The Notice of Default was
recorded on June 17, 2009. The Substitution of Trustee was executed after the Notice of Default
was filed, thus rendering the Notice of Default voidable. The Assignment Deed of Trust was
also executed after the Notice of Default was recorded, which was July 10, 2009. How then
can these defendants claim they are proper foreclosers? Defendants did not comply with the new
foreclosure laws – Civil Code 2923.5 et seq, 2934(a) et seq. They were not contacted by the
lender even though they submitted a Declaration of Due Diligence on their Notice of Default.
The Notice of Default is defective in that there is no declaration under penalty of perjury.
Plaintiffs were not given alternatives to foreclosure as mandated by the law.
Real property is unique, and plaintiff’s injury will be uncompensable in damages if
defendants are allowed to proceed. Demarist v. Quickloan Funding Inc., 2009 WL 940377 at 9
(C.D. Cal.2009).
In contrast, foreclosing defendants will suffer no hardship if the instant motion is granted.
They will retain whatever security interest they have in the property and will be able to seek
liquidation of the assets protecting their interest if they prevail. If the subject property is sold
plaintiffs' injury will be uncompensable.
Statistics show that defendants are not even marketing the properties upon which they
foreclose but rather are sitting on them so foreclosure gains defendants nothing. Indeed, an
unoccupied home is subject to damages and resulting loss, while an occupied home will be
maintained and preserved. Because the balance of hardship tips heavily in plaintiffs’ favor,
plaintiff needs only to establish a serious question going to the merits upon which plaintiffs has a
better than fair chance of prevailing.
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Here, plaintiffs alleged and can establish prima facie violations of law and at the very
least have a fair chance of prevailing on the merits. Defendants are not only guilty of wrongful
foreclosure and predatory lending, they have also committed fraud and violated a host of statutes.
This Court should exercise its authority and enter the requested injunctive relief.
II.ARGUMENT
A. The Standard for Preliminary Injunctive Relief
The standard for granting a preliminary injunction requires balancing plaintiffs’
likelihood of success on the merits against the relative hardship to the parties. Here, the balance
of hardships tips sharply in support of plaintiffs –they will lose their home if an injunction does
not issue. In contrast, defendants will suffer no serious hardship as their security in their home
will remain (Demarest v Quick Loan Funding, Inc. 2009 WL 940377 at 9 (C.D. Cal 2009) and it
seems likely they will not immediately sell the property even if they do foreclose.
California Code of Civil Procedure Section 526(a)(1)-(5) states:(a) An injunction may be granted in the following cases:
(1) When it appears by the complaint that the plaintiff is entitled to the relief demanded, and the relief, or any part thereof, consists in restraining the commission or continuance of the act complained of, either for a limited period or perpetually.(2) When it appears by the complaint or affidavits that the commission or continuance of some act during the litigation would produce waste, or great or irreparable injury, to a party to the action.(3) When it appears, during the litigation, that a party to the action is doing, or threatens, or is about to do, or is procuring or suffering to be done, some act in violation of the rights of another party to the action respecting the subject of the action, and tending to render the judgment ineffectual.(4) When pecuniary compensation would not afford adequate relief.(5) Where it would be extremely difficult to ascertain the amount of compensation which would afford adequate relief.
A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION SHOULD BE ISSUED IF PLAINTIFF’S RIGHT TO RELIEF IS APPARENT FROM
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THE COMPLAINT AND THE RELIEF CONSISTS IN RESTRAINING THE COMMISSION OR CONTINUANCE OF THE ACT COMPLAINED OF.
Code of Civil Procedure § 526(a) (1)
In this case, the complaint demonstrates that, unless restrained, defendants will proceed
with a non-judicial foreclosure against plaintiffs’ real property without justification and in
violation of California Civil Code section 2924(c). As set forth in the complaint and as
evidenced by the Notices of Default and Trustee’s Sale recorded by one or more of the
defendants without right or privilege, defendants and their predecessors or successors in interest
have commenced a non-judicial foreclosures against plaintiffs’ property despite their attempts to
negotiate terms with the lender through NACA and on their own with Chase. More importantly,
despite the apparent fact the Deed of Trust defendants hold and which is alleged by defendants to
be a valid lien against plaintiffs’ home, is void and does not constitute a valid lien against their
home. It is clear SHOCKLEY and FETTERS are the true and rightful owners of the real
property and did not enter into an enforceable loan transaction with defendants as evidenced both
by the allegations set forth in their Complaint, the exhibits thereto and the fact defendants knew
or should have known the terms contained in various loan documents they prepared and tendered
to plaintiffs were not, in view of the facts then known to defendants, capable of being performed
by plaintiffs and were, in fact, impossible, were therefore void and otherwise unenforceable as
shown by the documents themselves.
A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION SHOULD BE ISSUED IF AN ACT WOULD PRODUCE WASTE OR GREAT OR
IRREPARABLE INJURY TO A PARTY DURING LITIGATION.An injunction may be granted when it appears by the complaint or affidavits (or
declarations) that the commission or continuance of some act during the litigation would produce
waste, or great or irreparable injury to a party to the action (Code Civ. Proc. § 526(a)(2), 2015.5;
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Volpicelli v. Jared Sydney Torrance Memorial Hosp. (1980) 109 Cal. App. 3d 242 ; Smith v.
Smith (1942) 49 Cal. App. 2d 716 ). The term ''irreparable injury'' means that species of
damages, whether great or small, that ought not to be submitted to on the one hand or inflicted on
the other (Wind v. Herbert (1960) 186 Cal. App. 2d 276). This definition warrants the use of the
injunctive power of the court against a wrong that a trial judge deems insufferable because it
constitutes an overbearing assumption by one person of superiority and domination over the
rights and property of others (Fretz v. Burke (1967) 247 Cal. App. 2d 741). It is plain that
defendants’ recording a Notice of Default and Assignment Deed of Trust and the Substitution of
Trustee is not justified, particularly where, as here, such Notice of Default l was filed improperly
and that, specifically, NDEX– the servicer was NOT the Trustee of Record at the time such
Notice was filed nor did NDEX know, as evidenced by documents contained in the public
records of the Contra Costa County Recorder, who the actual beneficiary of the Deed of Trust
pursuant to which the Notice was filed actually was. Further, defendants know or should have
known they have no presently cognizable interest in the property and that pursuance of
foreclosure would result in loss of plaintiffs’ home at worst or so cloud his title as to make it
impossible for him to continue to reside in his home without incurring enormous legal expense.
Such a loss ought not to be submitted to by plaintiffs, nor suffered to be inflicted by the
defendants.
A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION SHOULD BE ISSUED IF AN ACT WOULD RENDER THE JUDGMENT
INEFFECTUALAn injunction may be granted when it appears, during the litigation, that a party to the
action is doing, or threatens, or is about to do, or is procuring or suffering to be done, some act in
violation of the rights of another party to the action respecting the subject of the action, and
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tending to render the judgment ineffectual ( Code Civ. Proc. § 526(a)(3) ; Heckman v.
Ahmanson (1985) 168 Cal. App. 3d 119; Lenard v. Edmonds (1957) 151 Cal. App. 2d 764;
Rossi v. Rossi (1955) 134 Cal. App. 2d 639). While the conduct alleged in the complaint is
outrageous, and may justify an award of monetary damages, the principal relief sought herein is
to prevent defendants from foreclosing on plaintiff’s property. Thus, if defendants were
permitted to proceed with their non-judicial foreclosure, any subsequent judgment relative to
such an action would be ineffectual.
California Code of Civil Procedure Section 527 states:
(a) A preliminary injunction may be granted at any time before judgment upon a verified complaint, or upon affidavits if the complaint in the one case, or the affidavits in the other, show satisfactorily that sufficient grounds exist therefor. No preliminary injunction shall be granted without notice to the opposing party.
With the pending trustee sale of plaintiffs’ home impending April 15, 2011, they face a
real, imminent, and severe harm that cannot be adequately compensated with a monetary award.
Once this home is sold, no amount of money can compensate them for the loss of their home.
CCP 526(a)(2), (4)-(5). This fact is also recognized under California law in the context of a
home purchase. California law recognizes that both irreparable injury and inadequacy of money
damages are presumed to be present where real property is involved. California law further
recognizes that where a single-family residence is involved, the presumption of the inadequacy
of money damages is conclusive. Civil Code Section 3387 states:
“It is presumed that the breach of an agreement to transfer real property be adequately relieved by pecuniary compensation. In the case of a single-family dwelling which the party seeking performance intends to occupy, this presumption is conclusive.” In determining whether to grant a preliminary injunction, the Court shall consider the
probability of Plaintiff’s success on the merits, and whether greater injury will result to the
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Defendants in granting the injunction than to the Plaintiff in refusing it. Continental Baking Co.
v. Katz (1968) 68 Cal.2d 512, 528, 67 Cal.Rptr. 761, 771. Similarly, in Robbins v. Superior
Court of Sacramento County (1985) 38 Cal.3d 199, 211 Cal.Rptr. 398, the California Supreme
Court explained the trial court’s proper balancing of hardships in determining whether a
preliminary injunction should issue:
“The trial courts consider two interrelated questions in deciding whether to issue a preliminary injunction:
Are the plaintiffs likely to suffer greater injury from a denial of the injunction than the defendants are likely to suffer from its grant; andIs there a reasonable probability that the plaintiffs will prevail on the merits.”
In applying the first prong of this two-prong test, Defendants are wealthy individuals and
institutions sophisticated in financial matters and will not be harmed by the issuance of the
preliminary injunction. However, if the temporary restraining order and preliminary injunction
are denied, Plaintiffs will be rendered homeless.
In applying the second prong of the aforementioned two-prong test, Plaintiff has more than a
reasonable probability of success on their complaint. The Complaint and declaration submitted
in support of this application clearly demonstrate that Plaintiffs are victims of fraudulent and
oppressive business practices by people regulated by State and Federal law and who have taken
undue advantage of many numerous persons in the general public such as Plaintiff, for huge
profit and gain. Defendants are clearly in violation of law set forth in Wyatt v. Union Mortgage
Co. (1979) 24 Cal.3d 773, 157 Cal.Rptr. 392 in that their agent, Brenda Frasier, broker for
defendant AMERITECH, a fiduciary, had “duties which extended beyond bare written disclosure
or terms of the transaction to duties of oral disclosure and counseling, which applies to
transactions with “mortgage loan brokers.” AMERITECH failed to disclose or counsel Plaintiffs
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as to the disastrous loan she was offering them in a market that Defendants knew was about to
collapse. It was not until plaintiffs received the forensic analysis did they see the glaring
discrepancies and non-compliance with the law.
Finally, no undertaking should be required because if the Deed of Trust is valid, the
Defendants are fully secured and, in fact, may NOT obtain any relief against Plaintiffs except for
that they receive from a trustee's sale. If the Deed of Trust is void then Defendants are NOT
entitled to the property in any fashion. In contrast, Plaintiffs are without resources as a result of
Defendants’ wrongful actions and unable to raise additional funds to post a bond and still seek
legal redress against Defendants. Restraining the foreclosure will not materially affect the
Defendants in the same way a foreclosure will harm Plaintiffs.
Foreclosure is a drastic sanction. Baypoint Mortgage Corp. v. Crest Premium Real Estate
etc. Trust, (1985) 168 Cal.App.3d 818, 837. Irreparable injury will almost always be involved in
a home foreclosure, especially if the grounds for invalidating the foreclosure rest on the
voidability rather than the voidness of the transaction. Furthermore, courts presume in a
foreclosure context that the property is unique, that its loss is irreparable and that money
damages are inadequate unless the property is being openly marketed and has no special value to
the owner than its market price. Jessen v. Keystone Sav. & Other Loa Assn. 142 Cal.App.3d
454, 457-58.
III.
CONCLUSION
Based on the foregoing, Plaintiffs SHOCKLEY and FETTERS respectfully requests a
temporary restraining order and an order requiring foreclosing Defendants to show cause why a
preliminary injunction should not issue pending trial in this action, enjoining Defendants and
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their employees, agents, and persons acting with them or on their behalf, from selling, attempting
to sell, or causing to be sold the trust property described in the second on file in this action either
under the power of sale in the deeds of trust or by foreclosure action.
DATED: May 10, 2011
THE LAW OFFICES OF TIMOTHY MCCANDLESS
By _____________________________
Timothy McCandless, Attorney for PlaintiffsCHARLES FETTERS ANDERIC SHOCKLEY
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