SFR Investment Pool 1, LLC v. NewRez LLC

Opinion

3 SFR Investments Pool 1, LLC, Case No.: 2:22-cv-00192-JAD-BNW

4 Plaintiff v. 5 Order Granting Emergency Motion for Newrez LLC dba Shellpoint Mortgage Temporary Restraining Order 6 Servicing; et al., [ECF No. 7] 7 Defendants

8 Plaintiff SFR Investments Pool 1 moves for an order temporarily restraining Newrez LLC 9 dba Shellpoint Mortgage Servicing from foreclosing on the real property located at 2993 Via 10 Della Amore, Henderson, Nevada 89052, as scheduled for February 16, 2022.1 As SFR 11 explains, Shellpoint attempts to foreclose on the property based on the deed of trust securing the 12 unpaid mortgage on the property. But SFR takes the position that the deed of trust was 13 discharged by operation of Nevada Revised Statute 106.240, which conclusively presumes that a 14 lien is automatically extinguished ten years after the debt it secures becomes wholly due. And 15 even if the deed of trust is still enforceable, SFR adds, Shellpoint failed to take the steps required 16 under Nevada law to prove its authority to foreclose. With a day left before the scheduled sale, 17 Shellpoint has not filed a response to the motion. 18 The legal standard for issuing a temporary restraining order and the legal standard for 19 preliminary injunctive relief are “substantially identical.”2 Both are “extraordinary” remedies 20 and “never awarded as of right.”3 The Supreme Court clarified in Winter v. Natural Resources 21

22 1 ECF No. 7. 2 See Stuhlbarg Intern. Sales Co. v. John D. Bush and Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001) 23 (stating that the “analysis is substantially identical for the injunction and the TRO”). 3 Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). 1 Defense Council, Inc. that, to obtain an injunction, the plaintiff “must establish that [it] is likely 2 to succeed on the merits, that [it] is likely to suffer irreparable injury in the absence of 3 preliminary relief, that the balance of equities tips in [its] favor, and that an injunction is in the 4 public interest.”4 The Ninth Circuit also recognizes an additional standard: “if a plaintiff can

5 only show that there are ‘serious questions going to the merits’—a lesser showing than 6 likelihood of success on the merits—then a preliminary injunction may still issue if the ‘balance 7 of hardships tips sharply in the plaintiff’s favor,’ and the other two Winter factors are satisfied.”5 8 SFR argues and provides evidence to show that there are serious questions going to 9 whether Shellpoint has as valid and existing interest in the deed of trust that it intends to 10 foreclose upon via a trustee’s sale tomorrow. With its motion, evidence, and complaint, SFR has 11 demonstrated that it is likely to be irreparably harmed if the foreclosure sale is conducted before 12 these questions can be answered. And considering the nature of the property loss that could 13 occur should the foreclosure proceed, juxtaposed against the many years that this mortgage has 14 gone unpaid, the balance of hardships tips sharply in the plaintiff’s favor, and temporary

15 injunctive relief is in the public interest. 16 IT IS THEREFORE ORDERED that SFR’s motion for a temporary restraining order 17 [ECF No. 7] is GRANTED. Defendant Newrez LLC dba Shellpoint Mortgage Servicing and its 18 officers, agents, servants, employees, attorneys, and any other person acting in active concert or 19 participation with it are RESTRAINED from proceeding with the foreclosure sale of real 20 property known as 2993 Via Della Amore, Henderson, Nevada 89052. 21 22 4 Id. at 20. 23 5 Shell Offshore, Inc. v. Greenpeace, Inc., 709 F.3d 1281, 1291 (9th Cir. 2013) (quoting Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011)). ] IT IS FURTHER ORDERED that this temporary restraining order will automatically 2|| EXPIRE at 5:00 p.m. on February 25, 2022, unless it is extended by the court for cause or converted into a preliminary injunction. 4 IT IS FURTHER ORDERED that SFR must post a bond by the court in the amount 5|| of $1,000 by 5:00 p.m. on February 16, 2022, to effectuate this order and recompense the defendant if it is later determined that the foreclosure sale has been wrongfully restrained. 7 IT IS FURTHER ORDERED that SFR’s motion for a preliminary injunction [ECF No. 8] will be heard at 10:00 a.m. on Friday, February 25, 2022, in Courtroom 6D of the Lloyd D. George Federal Courthouse, 333 Las Vegas Blvd. So., Las Vegas, Nevada 89101. Defendant has until February 22, 2022, to file any response to the motion for preliminary injunction. SFR has noon on February 24, 2022, to file any reply. 12 oy DH a U.S. District Judge Jennifer (a. Dorsey 13 February 15, 2022 14 15 16 17 18 19 20 21 22 23

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