SFR Investments Pool 1, LLC v. NewRez LLC

Opinion

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 SFR Investments Pool 1, LLC, Case No.: 2:22-cv-00567-JAD-EJY

4 Plaintiff

5 v. Order Denying Motion for Preliminary Injunction 6 Newrez LLC dba Shellpoint Mortgage Servicing, et al., [ECF No. 26] 7 Defendants 8

9 Plaintiff SFR Investments Pool 1, LLC moves to enjoin Newrez LLC dba Shellpoint 10 Mortgage Servicing from enforcing its rights under the deed of trust that secures the long-unpaid 11 mortgage on 1622 Colloquium Drive, in Henderson, Nevada, by foreclosing on the property. 12 SFR argues that it properly tendered the payoff amount of $219,136.23, discharging the debt and 13 precluding foreclosure.1 Newrez rejected that tender, contending that SFR’s check reflected 14 merely the sum required to bring current the loan (which had been in default since 2009), and the 15 full payoff amount to discharge the debt and stop the foreclosure is nearly twice that sum.2 16 Because SFR has not demonstrated that its tender was sufficient under Nevada law to discharge 17 this debt, I deny the motion. 18 Analysis 19 A preliminary injunction is an “extraordinary” remedy “never awarded as of right.”3 The 20 Supreme Court clarified in Winter v. Natural Resources Defense Council, Inc. that, to obtain an 21 22 1 ECF No. 26. 23 2 ECF No. 27. 3 Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). 1 injunction, plaintiffs “must establish that [they are] likely to succeed on the merits, that [they are] 2 likely to suffer irreparable injury in the absence of preliminary relief, that the balance of equities 3 tips in [their] favor, and that an injunction is in the public interest.”4 The Ninth Circuit 4 recognizes an additional standard: if “plaintiff[s] can only show that there are ‘serious questions

5 going to the merits’—a lesser showing than likelihood of success on the merits—then a 6 preliminary injunction may still issue if the ‘balance of hardships tips sharply in the plaintiffs’ 7 favor,’ and the other two Winter factors are satisfied.”5 Under either approach, the starting point 8 is a merits analysis. 9 SFR has not shown that there are serious questions going to the merits of its suit, let alone 10 a likelihood of success. Its theory that the $219,136.23 was the payoff amount is based on the 11 December 2, 2021, letter from the mortgage servicer. SFR argues that “the only amount 12 identified was $219,136.23. Thus, this is exactly what SFR tendered prior to the sale.”6 13 But the $219,136.23 amount is not the only one identified in this letter. The letter also 14 identifies various fees and charges and the principal loan balance.7 The $219,136.23 figure is

15 characterized as the “Total Delinquent Amount Due,” which a sophisticated real-estate investor 16 like SFR8 would understand referred to the loan payments that were delinquent because they had 17 come due but had not been made.9 And that this sum was not the payoff amount needed to 18

4 Id. at 20. 19 5 Shell Offshore, Inc. v. Greenpeace, Inc., 709 F.3d 1281, 1291 (9th Cir. 2013) (quoting All. for 20 the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011)). 6 ECF No. 29 at 4. 21 7 ECF No. 26-9 at 5. 22 8 SFR was the plaintiff in the seminal HOA case of SFR Invs. Pool 1 v. U.S. Bank, 334 P.3d 408, 409 (Nev. 2014), and has since been actively litigating hundreds, if not thousands, of these cases 23 in Nevada’s state and federal courts. 9 ECF No. 26-9 at 5. 1} discharge the debt was further evidenced by the instruction in the letter to contact Newrez’s 2|| office “if you need a formal payoff quote,”!° suggesting that the $219,136.23 figure was not 3] itself the payoff amount: 4 Per your request, listed below is some of your detalled loan information. Loan Number: 0579378365 Pro Addrer: COLLOQUI HENDERSON > Nex! Payment Due Date: 12/1/2009 ona ne UMDR ney Lite Charge: 5188.40 Regular Payment Amount: $1,395.18 6 Other Fees: $9,462.75 NSF Changes: 000 Principal Balance: $193,058.24 Legal Fees: 5,456.2) 7 Total Delinquent Amount Dic: 5219,136.23 Please noc that the information fisted above is as of 12/2/2021. A payment sent tous in the mail may take 5 - 7 days to be recelved here in office. Also, please note that the principal balance figure listed above fs only your principal balance, It is 8 Nel 4 payolTamount. Please contact our office al (B00) 365-7107 if you need « formal payoll quotc. 9 We would be glad bo ditnus any questions you may leave about your ReCOUNL, 10 So, when SFR tendered its check for $219,136.23 as “the full amount owed” and “‘to 11]| discharge the debt for which the deed of trust secures, and in turn receive a reconveyance of the 12|| deed of trust[,]” it appears that SFR had no right to insist on such conditions.!'! SFR thus has not 13]| shown that its tender was improperly refused, entitling SFR to enjoin an impending foreclosure. 14) IT IS THEREFORE ORDERED that the motion for preliminary injunction [ECF No. 26] is DENIED. 16 17 (hoes U.S. District Judge Jennifer’A. Dorsey 18 February 21, 2023 19 20 ——____ 10 Td. 22H 11 Bank of Am., N.A. v. SFR Invs. Pool 1, LLC, 427 P.3d 113, 118 (Nev. 2018), as amended on denial of reh’g (Nov. 13, 2018) (“In addition to payment in full, valid tender must be 23 . . ey unconditional, or with conditions on which the tendering party has a right to insist.”), known locally as the Diamond Spur case.