Pok v. ZBS Law LLP

District Court, E.D. California·Decided July 18, 2025·No. 2:25-cv-01084·Unknown

Opinion

RATTANA POK, et al., No. 2:25-cv-01084-DJC-CSK Plaintiffs, v. ORDER DENYING PRELIMINARY ZBS LAW, LLP, et al., Defendants. Plaintiffs Rattana Pok and Sokeo Chhit have moved to preliminarily enjoin all foreclosure proceedings against their home, arguing the foreclosure arises out of a fraudulently procured deed of trust securing a home equity line of credit that Plaintiffs “neither applied for, executed, nor received.” Following its issuance of a temporary restraining order, the Court held an evidentiary hearing during which Plaintiffs and Defendant Real Time Resolutions, Inc., the prime servicer of the loan, presented evidence concerning the validity of the deed of trust. Having carefully weighed the testimony at the hearing, as well as the evidence in the record, the Court finds that Plaintiffs have failed to demonstrate their entitlement to a preliminary injunction at this stage. It is well established that notarized deeds are presumed to be valid. Plaintiffs’ evidence is insufficient to rebut that presumption here, as Defendant presented credible testimony and evidence at the hearing that the notarization of the deed was valid and that Plaintiff Pok was the signatory. Plaintiffs’ testimony and evidence, by contrast, was far less credible or persuasive. In sum, based on the evidentiary record before the Court, the Court does not find that Plaintiffs have shown either a likelihood of success on the merits or serious questions going to the merits of their claims by demonstrating the deed of trust was likely fraudulent. Accordingly, the Court will not enjoin the foreclosure proceedings against Plaintiffs’ residence at this time. The Parties and the Court are familiar with the background of this matter as set forth in the Court’s Temporary Restraining Order. (See Temporary Restraining Order (“TRO”) (ECF No. 19) at 2–4.) As is relevant here, Plaintiffs purchased their residence located at 3850 Montaro Lane, Stockton, California, 95212 (“Property”) in May 2003. (Ex Parte Appl. Temporary Restraining Order (“Mot. TRO”) (ECF No. 6) at 1.) Plaintiffs allege that, on or about July 12, 2005, a fraudulent a Deed of Trust (“2005 DOT”) was recorded against their Property without their knowledge purporting to secure a $90,000 Home Equity Line of Credit (“2005 Loan”) from Countrywide Home Loans, Inc. (Id. at 2.) Plaintiffs further allege that, on or about August 23, 2006, a Modification Agreement to the Home Equity Line of Credit Agreement (“Modification Agreement”) amended the terms of the 2005 Loan by increasing the credit limit from $90,000 to $180,000. (Id.) However, Plaintiffs allege they “never consented to, authorized, or signed this Modification Agreement, nor were Plaintiffs made aware of its execution.” (Id.) Further, Plaintiffs allege they “never applied for, authorized, or executed any documents related to the purported 2005 Loan, nor did Plaintiffs receive or benefit from any disbursement of its proceeds.” (Id.) Nevertheless, from approximately May 2005 through February 2007, Plaintiffs allege withdrawals exceeding $123,000 were made against the 2005 Loan without Plaintiffs’ knowledge or consent. (Id.) Plaintiffs allege they first became aware of the 2005 Loan on July 28, 2021, when a Notice of Default was recorded by ZBS Law LLP acting as trustee on behalf of Defendant. (Id. at 2–3.) Plaintiffs allege that Defendant commenced foreclosure proceedings against the Property in 2023, and on January 5, 2024, a Notice of Trustee’s Sale was recorded. (Id. at 3.) In response, Plaintiffs brought this action in San Joaquin County Superior Court on January 31, 2024, and Defendant removed the action based on diversity jurisdiction on April 11, 2025. (ECF No. 1.) Plaintiffs filed a First Amended Complaint on May 6, 2025, alleging 16 causes of action arising from the allegedly fraudulent 2005 DOT and Modification Agreement for (1) quiet title, (2) cancellation of instrument, (3) declaratory relief, (4) unfair competition under California Business and Professions Code section 17200 et seq., (5) lack of standing to foreclose, (6) wrongful foreclosure, (7) negligence, (8) negligent misrepresentation, (9) fraud, (10) violation of the Fair Debt Collection Practices Act, (11) violation of the Rosenthal Fair Debt Collection Practices Act, (12) violation of the Truth in Lending Act, (13) slander of title, (14) violation of California Civil Code section 2924.17, (15) identity theft, and (16) intentional infliction of emotional distress. (ECF No. 4.) Two days later, Plaintiffs brought an Ex Parte Application for Temporary Restraining Order and Order to Show Cause re: Preliminary Injunction, seeking to enjoin a foreclosure sale of the Property scheduled for May 14, 2025, and any other foreclosure proceedings. (Mot. TRO at 1.) The Court granted the Temporary Restraining Order on May 21, 2025, set an evidentiary hearing to determine the propriety of converting the Temporary Restraining Order into a preliminary injunction, and granted the Parties leave to file supplemental briefing. (TRO at 8–9.) The Court held an evidentiary hearing on July 9, 2025, with Allison Erggelet and John Moore appearing for Plaintiffs, and Nathaniel Lucey and Scott Mangum appearing for Defendant. The matter was submitted. //// //// “A preliminary injunction is an extraordinary remedy never awarded as of right.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). “A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” Id. at 20. A preliminary injunction may only be awarded “upon a clear showing” of evidence that supports each relevant preliminary injunction factor. Id. at 22. “This ‘clear showing’ requires factual support beyond the allegations of the complaint, but the evidence need not strictly comply with the Federal Rules of Evidence.” CI Games S.A. v. Destination Films, No. 2:16-cv-05719-SVW-JC, 2016 WL 9185391, at *11 (C.D. Cal. Oct. 25, 2016). Alternatively, courts in the Ninth Circuit apply a “sliding scale” approach, under which “[a] preliminary injunction is appropriate when a plaintiff demonstrates . . . that serious questions going to the merits were raised and the balance of hardships tips sharply in the plaintiff’s favor . . . so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest.” All. for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1134–35 (9th Cir. 2011) (quoting Lands Council v. McNair, 537 F.3d 981, 987 (9th Cir. 2008).) Serious questions are those “which cannot be resolved one way or the other at the hearing on the injunction.” Bernhardt v. Los Angeles Cnty., 339 F.3d 920, 926 (9th Cir. 2003) (quoting Republic of the Philippines v. Marcos, 862 F.2d 1355, 1362 (9th Cir. 1988)). When seeking a preliminary injunction, “[l]ikelihood of success on the merits is a threshold inquiry and is the most important factor.” Env’t Prot. Info. Ctr. v. Carlson, 968 F.3d 985, 989 (9th Cir. 2020). Plaintiffs’ claims here turn primarily on the validity of the 2005 DOT, which was purportedly signed by Plaintiff Pok and notarized by Jennifer Bradford, formerly Gardea, on May 21, 2005. (See Bra

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