Preview
Jason W. Estavillo (Bar No. 188093)
1
David L. Chaffin (Bar No. 258459)
2 ESTAVILLO LAW GROUP
555 12th Street, Suite 1280
3 Oakland, CA 94607
Telephone: (510) 982-3001
4
Facsimile: (510) 982-3002
5 Email: jason@estavillolaw.com
david@estavillolaw.com
6
7
Attorneys for Plaintiff,
8 GREGORY A. STEPRO
9 SUPERIOR COURT FOR THE STATE OF CALIFORNIA
10 COUNTY OF KERN
11
GREGORY A. STEPRO, ) Case No.: BCV-24-101264
12 )
13 Plaintiff, ) MEMORANDUM OF POINTS AND
) AUTHORITIES IN SUPPORT OF EX
14 vs. ) PARTE APPLICATION FOR
) TEMPORARY RESTRAINING ORDER TO
15 SPECIALIZED LOAN SERVICING, LLC; ) CANCEL AND ENJOIN SALE OF
GULF HARBOUR INVESTMENTS ) SUBJECT REAL PROPERTY AND ORDER
16 CORPORATION; THE MORTGAGE LAW ) TO SHOW CAUSE RE: PRELIMINARY
FIRM, PLC; and DOES 1-20, ) INJUNCTION
17
)
18 Defendants. )
) Filed Concurrently With:
19 ) 1. Ex Parte Applicaiton;
) 2. Declaration of Gregory A. Stepro;
20 ) 3. Declaration of Alejandra Cornejo
) Garcia; and
21 ) 4. Proposed Order
22 )
) Date: April 16, 2024
23 ) Time: 8:30 AM
) Dept.: H
24 )
25
26
27
28
ESTAVILLO LAW GROUP
555 12th Street, Suite 1280
Oakland, CA 94607
Telephone: (510) 982-3001
Facsimile: (510) 982-3002
Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities
1
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 Plaintiff alleges that the Defendants are currently in the process of effectuating a wrongful
4 foreclosure sale as a result of Defendants’ breach of contract and failure to comply with California law
5 by failing to send a Notice of Default, Notice of Sale or attempt to contact Plaintiff to discuss
6 alternatives since Plaintiff has ability to pay the loan in full.
7 II. STATEMENT OF FACTS
8 At all relevant times mentioned herein, Plaintiff, GREGORY A. STEPRO (“Plaintiff” or
9 “Homeowner”) is the rightful owner of the property commonly known as 456 East Hartley Ave.,
10 Ridgecrest CA 93555 (the “Property” or “Home”). (See Declaration of Gregory A. Stepro (“Stepro
11 Decl.”) ¶ 2)
12 On May 6, 2004, Plaintiff executed a Mortgage Loan Note and Deed of Trust (hereafter the
13 “Loan”), in the amount of $150,000.00 in favor of E*TRADE Bank. The Loan was secured by the
14 Property by the Deed of Trust recorded with the Kern County Recorder’s Office on June 15, 2004, as
15 Instrument No. 0204137063. (See Stepro Decl. ¶ 3, Exhibits A and B)
16 Thereafter, Plaintiff experienced financial hardship, had challenges in making payments on the
17 Loan, and Defendants ceased providing Plaintiff with monthly mortgage statements. (See Stepro Decl.
18 ¶ 4)
19 The Note states in relevant part in page 3 the following:
20 “Notices. All notices will be sent to your address as shown in this Agreement…”
21 (See Stepro Decl. ¶ 5, Exhibit A)
22 Further, the Deed of Trust states in relevant part in page 6 the following:
23 NOTICES. Any notice required to be given under this Deed of Trust shall be given
24 in writing, and shall be effective when actually delivered, when actually received
25 by telefacsimile (unless otherwise required by law, when deposited with a
26 nationally recognized overnight courier, or, if mailed, when deposited in the United
27 States mail, as first class, certified or registered mail postage prepaid, directed to
28 the addresses shown near the beginning of this Deed of Trust. Trustor requests that
ESTAVILLO LAW GROUP
555 12th Street, Suite 1280
Oakland, CA 94607
Telephone: (510) 982-3001
Facsimile: (510) 982-3002
Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities
2
1 copies of any notices of default and sale be directed to Truster's address shown near
2 the beginning of this Deed of Trust…”
3 (See Stepro Decl. ¶ 6, Exhibit B)
4 On September 6, 2023, Defendants caused to be recorded a Notice of Default (NOD), on
5 Plaintiff’s property for a default amount of $66,566.25 as of September 11, 2023. (See Stepro Decl. ¶
6 7, Exhibit C)
7 Subsequently, on March 13, 2024, Defendants caused to be recorded a Notice of Trustee’s Sale
8 (NOTS) on Plaintiff’s property. (See Stepro Decl. ¶ 8, Exhibit D)
9 Defendants failed to comply with the terms of the Note and Deed of Trust when they failed to
10 send the Notice of Default (NOD) and the Notice of Trustee’s Sale (NOTS) to the Plaintiff as agreed
11 under the Note p. 3 and Deed of Trust p. 6, as such the pending Trustee sale is in breach of the Note
12 and Deed of Trust terms and therefore is void and should be vacated. (See Stepro Decl. ¶ 9)
13 The Plaintiff did not receive any notice that his Home is being foreclosed upon. Had Defendants
14 sent the NOD and NOTS to Plaintiff as agreed on the Note and Deed of Trust, Plaintiff would have
15 either remedied the default by paying $66,566.25, which is the amount due per the NOD or seek other
16 loss mitigation options. Rather, Defendants choose to pursue a Trustee Sale of Plaintiffs’ Property that
17 is worth $275,000.00 to recover a default amount of $66,566.25. (See Stepro Decl. ¶ 10; Exhibit C)
18 Further, Defendant Mortgage Law Firm, as alleged trustee under the DOT, recorded the NOD
19 without fulfilling the requirements (2) and (c) set forth in Cal. Civ. Code § 2923.55:
20 (2) A mortgage servicer shall contact the borrower in person or by telephone in order to
21 assess the borrower's financial situation and explore options for the borrower to avoid
22 foreclosure. During the initial contact, the mortgage servicer shall advise the borrower
23 that he or she has the right to request a subsequent meeting and, if requested, the
24 mortgage servicer shall schedule the meeting to occur within 14 days. The assessment
25 of the borrower's financial situation and discussion of options may occur during the first
26 contact, or at the subsequent meeting scheduled for that purpose. In either case, the
27 borrower shall be provided the toll-free telephone number made available by the United
28
ESTAVILLO LAW GROUP
555 12th Street, Suite 1280
Oakland, CA 94607
Telephone: (510) 982-3001
Facsimile: (510) 982-3002
Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities
3
1 States Department of Housing and Urban Development (HUD) to find a HUD-certified
2 housing counseling agency. Any meeting may occur telephonically.
3 (See Stepro Decl. ¶ 11)
4 Defendants recorded NOD without complying with the requirement of Cal. Civ. Code §
5 2923.55. Defendants failed to contact the Plaintiff or show efforts made to contact the Plaintiff. (See
6 Stepro Decl. ¶ 12; Exhibit C)
7 Plaintiff never received mails or phone calls from Defendants, nor was Plaintiff provided with
8 the toll-free telephone number made available by the United States Department of Housing and Urban
9 Development (HUD) to find a HUD-certified housing counseling agency. (See Stepro Decl. ¶ 13)
10 Defendants recorded the NOD without contacting Plaintiff “in person or by telephone” to assess
11 Plaintiff’s financial situation and explore options to avoid foreclosure. Subsequently, Defendants
12 recorded a Notice of Trustee’s Sale (“NOTS”) resulting from the recorded NOD. Thus, the NOD and
13 the resulting NOTS were recorded in violation of Cal. Civ. Code § 2923.55. (See Stepro Decl. ¶ 14)
14 Since Defendants also failed to notify or correspond with Plaintiff in writing concerning its
15 options regarding the NOD and alleged default, Defendants recorded the NOD in violation of Cal.
16 Civ. Code § 2923.55. (See Stepro Decl. ¶ 15)
17 Defendants’ failures to discuss options and provide notice to Plaintiff have caused Plaintiff
18 significant harm because Plaintiff is now at imminent risk of losing his Property. (See Stepro Decl.
19 ¶ 16)
20 The declaration of Defendant SLS attached to the NOD states that, “The mortgage servicer has
21 tried with due diligence to contact the borrower as required by California Civil Code § 2923.55(1) but
22 has not made contact despite such due diligence. Thirty days have passed since these due diligence
23 efforts were satisfied.” (See Stepro Decl. ¶ 17; Exhibit C)
24 The declaration is false because Defendant SLS never made an attempt to contact Plaintiff as
25 stated in the declaration. Plaintiff did not receive any mail from Defendant SLS stating that it was trying
26 to contact him. Plaintiff has not changed his phone number nor was his phone disconnected and did not
27 receive any call or missed call from Defendant SLS showing that it is trying to contact him. (See Stepro
28 Decl. ¶ 18)
ESTAVILLO LAW GROUP
555 12th Street, Suite 1280
Oakland, CA 94607
Telephone: (510) 982-3001
Facsimile: (510) 982-3002
Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities
4
1 Defendants by making a false declaration, breached the covenant of good faith and fair dealing
2 by frustrating and denying Plaintiff the benefit of the loan agreement through their wrongful conduct,
3 thereby causing a wrongful foreclosure of Plaintiff’s Home.
4 As a result, the NOD and NOTS were executed and recorded in grave breach of the Note and
5 Deed of Trust terms, as well as in violation of Cal. Civ. Code § 2923.55, and are therefore void.
6 As a result, Plaintiff is being wrongfully deprived of title to the Property and of its beneficial
7 use and enjoyment.
8 Had Defendants and its agents sent the notices as alleged herein, Plaintiff would have tendered
9 the amount due, so that the claimed default may be cured and Plaintiff may be reinstated to his rights
10 and privileges under the Loan. (See Stepro Decl. ¶ 19)
11 Had Defendants and its agents contacted Plaintiff to assess his financial situation and explore
12 alternatives to foreclosure in compliance with Cal. Civ. Code § 2923.55, Plaintiff would have pursued
13 alternatives to foreclosure such as loss mitigation options offered by Defendants. (See Stepro Decl. ¶
14 20)
15 The NOD and NOTS are clouds on the Plaintiff’s title to the Property, resulting in depreciation
16 of its market value, restricting Plaintiff’s use and enjoyment of the Property, and hindering Plaintiff’s
17 right to unrestricted alienation of the Property. If the NOD and NOTS are not delivered and canceled,
18 serious injury will result to Plaintiff. (See Stepro Decl. ¶ 21)
19 If Plaintiff loses his Home, Plaintiff with his family, will suffer severe irreparable harm and
20 extreme hardship. As such he cannot be compensated for its loss through money damages. (See Stepro
21 Decl. ¶ 22)
22 III. LEGAL ARGUMENT
23 A. Legal Standard.
24 Preliminary Injunctions may issue under Cal. Code Civ. Proc. § 527. This injunctive relief is
25 appropriate where: (1) it appears from the complaint that the plaintiff is entitled to the relief demanded,
26 and the relief, or any part thereof, consists in restraining the commission or continuance of the act
27 complained of; or (2) pecuniary compensation would not afford adequate relief; or (3) it would be
28 extremely difficult to ascertain the amount of compensation which would afford adequate relief. (Cal.
ESTAVILLO LAW GROUP
555 12th Street, Suite 1280
Oakland, CA 94607
Telephone: (510) 982-3001
Facsimile: (510) 982-3002
Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities
5
1 Code Civ. Proc. § 526.) When determining whether injunctive relief should issue, courts consider (a)
2 the likelihood that the moving party will prevail on the merits of his claim and (b) the harm to the
3 respective parties if relief is granted or denied. (Sahlolbei v. Providence Healthcare, Inc. (2003) 112
4 Cal.App.4th 1137, 1145.) In addition, the court must conduct a two-prong equitable balancing test,
5 weighing the probability of prevailing on the merits against the determination as to who is likely to
6 suffer greater harm. (Robbins v. Superior Court (1985) 38 Cal.3d 199, 206. Shoemaker v. County of
7 Los Angeles (1995) 37 Cal.App.4th 618, 633.) This determination involves a mix of the two elements,
8 and the greater the Plaintiff’s showing on one element, the weaker it may be on the other. (Butt v. State
9 of Calif. (1992) 4 Cal.4th 668, 678.)
10 B. Plaintiff is Likely to Succeed on the Merits of His Causes of Action.
11 1. Plaintiff is Likely to Succeed on the Merits of His Cause of Action for Breach of
12 Contract.
13 A cause of action for breach of contract lies where (1) a contract exists; (2) plaintiff performed
14 under the contract; (3) defendant breached its obligations under the contract; and (4) plaintiff has been
15 damaged from the breach. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222
16 Cal.App.3d 1371, 1388.)
17 A contract existed between Plaintiff and Defendants in the Note and Deed of Trust documents.
18 Defendants breached the loan agreement in the following ways.
19 The Note states in relevant part in page 3 the following:
20 “Notices. All notices will be sent to your address as shown in this Agreement…”
21 (See Stepro Decl. ¶ 5, Exhibit A)
22 Further, the Deed of Trust states in relevant part in page 6 the following:
23 NOTICES. Any notice required to be given under this Deed of Trust shall be given
24 in writing, and shall be effective when actually delivered, when actually received
25 by telefacsimile (unless otherwise required by law, when deposited with a
26 nationally recognized overnight courier, or, if mailed, when deposited in the United
27 States mail, as first class, certified or registered mail postage prepaid, directed to
28 the addresses shown near the beginning of this Deed of Trust. Trustor requests that
ESTAVILLO LAW GROUP
555 12th Street, Suite 1280
Oakland, CA 94607
Telephone: (510) 982-3001
Facsimile: (510) 982-3002
Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities
6
1 copies of any notices of default and sale be directed to Truster's address shown near
2 the beginning of this Deed of Trust…”
3 (See Stepro Decl. ¶ 6, Exhibit B)
4 On September 6, 2023, Defendants caused to be recorded a Notice of Default (NOD), on
5 Plaintiff’s property for a default amount of $66,566.25 as of September 11, 2023. (See Stepro Decl. ¶
6 7, Exhibit C)
7 Subsequently, on March 13, 2024, Defendants caused to be recorded a Notice of Trustee’s Sale
8 (NOTS) on Plaintiff’s property. (See Stepro Decl. ¶ 8, Exhibit D)
9 Defendants failed to comply with the terms of the Note and Deed of Trust when they failed to
10 send the Notice of Default (NOD) and the Notice of Trustee’s Sale (NOTS) to the Plaintiff as agreed
11 under the Note p. 3 and Deed of Trust p. 6, as such the pending Trustee sale is in breach of the Note
12 and Deed of Trust terms and therefore is void and should be vacated. (See Stepro Decl. ¶ 9)
13 The Plaintiff did not receive any notice that his Home is being foreclosed upon. Had Defendants
14 sent the NOD and NOTS to Plaintiff as agreed on the Note and Deed of Trust, Plaintiff would have
15 either remedied the default by paying $66,566.25, which is the amount due per the NOD or seek other
16 loss mitigation options. Rather, Defendants choose to pursue a Trustee Sale of Plaintiffs’ Property that
17 is worth $275,000.00 to recover a default amount of $66,566.25. (See Stepro Decl. ¶ 10; Exhibit C)
18 Defendants breached the terms of the contract when they failed to send the NOD and NOTS in
19 the manner required by the Note and Deed of Trust to notify Plaintiff that a foreclosure proceeding has
20 commenced on his Property.
21 As a result of Defendants’ misconduct, Plaintiff has suffered, and continues to suffer various
22 damages and injuries, including but not limited to, the imminent loss of his property. (See Stepro Decl.
23 ¶ 15)
24 ///
25 ///
26 ///
27 ///
28 ///
ESTAVILLO LAW GROUP
555 12th Street, Suite 1280
Oakland, CA 94607
Telephone: (510) 982-3001
Facsimile: (510) 982-3002
Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities
7
1 2. Plaintiff is Likely to Succeed on the Merits of His Cause of Action for Violation of
2 Cal. Civ. Code § 2923.55.
3 Defendant Defendant Mortgage Law Firm, as alleged trustee under the DOT, recorded the
4 NOD without fulfilling the requirements (2) and (c) set forth in Cal. Civ. Code § 2923.55:
5 (2) A mortgage servicer shall contact the borrower in person or by telephone in order to
6 assess the borrower's financial situation and explore options for the borrower to avoid
7 foreclosure. During the initial contact, the mortgage servicer shall advise the borrower
8 that he or she has the right to request a subsequent meeting and, if requested, the
9 mortgage servicer shall schedule the meeting to occur within 14 days. The assessment
10 of the borrower's financial situation and discussion of options may occur during the first
11 contact, or at the subsequent meeting scheduled for that purpose. In either case, the
12 borrower shall be provided the toll-free telephone number made available by the United
13 States Department of Housing and Urban Development (HUD) to find a HUD-certified
14 housing counseling agency. Any meeting may occur telephonically.
15 (See Stepro Decl. ¶ 11)
16 Defendants recorded NOD without complying with the requirement of Cal. Civ. Code §
17 2923.55. Defendants failed to contact the Plaintiff or show efforts made to contact the Plaintiff. (See
18 Stepro Decl. ¶ 12; Exhibit C)
19 Plaintiff never received mails or phone calls from Defendants, nor was Plaintiff provided with
20 the toll-free telephone number made available by the United States Department of Housing and Urban
21 Development (HUD) to find a HUD-certified housing counseling agency. (See Stepro Decl. ¶ 13)
22 Defendants recorded the NOD without contacting Plaintiff “in person or by telephone” to assess
23 Plaintiff’s financial situation and explore options to avoid foreclosure. Subsequently, Defendants
24 recorded a Notice of Trustee’s Sale (“NOTS”) resulting from the recorded NOD. Thus, the NOD and
25 the resulting NOTS were recorded in violation of Cal. Civ. Code § 2923.55. (See Stepro Decl. ¶ 14)
26 Since Defendants also failed to notify or correspond with Plaintiff in writing concerning its
27 options regarding the NOD and alleged default, Defendants recorded the NOD in violation of Cal.
28 Civ. Code § 2923.55. (See Stepro Decl. ¶ 15)
ESTAVILLO LAW GROUP
555 12th Street, Suite 1280
Oakland, CA 94607
Telephone: (510) 982-3001
Facsimile: (510) 982-3002
Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities
8
1 Defendants’ failures to discuss options and provide notice to Plaintiff have caused Plaintiff
2 significant harm because Plaintiff is now at imminent risk of losing his Property. (See Stepro Decl.
3 ¶ 16)
4 The declaration of Defendant SLS attached to the NOD states that, “The mortgage servicer has
5 tried with due diligence to contact the borrower as required by California Civil Code § 2923.55(1) but
6 has not made contact despite such due diligence. Thirty days have passed since these due diligence
7 efforts were satisfied.” (See Stepro Decl. ¶ 17; Exhibit C)
8 The declaration is false because Defendant SLS never made an attempt to contact Plaintiff as
9 stated in the declaration. Plaintiff did not receive any mail from Defendant SLS stating that it was trying
10 to contact him. Plaintiff has not changed his phone number nor was his phone disconnected and did not
11 receive any call or missed call from Defendant SLS showing that it is trying to contact him. (See Stepro
12 Decl. ¶ 18)
13 Defendants by making a false declaration, breached the covenant of good faith and fair dealing
14 by frustrating and denying Plaintiff the benefit of the loan agreement through their wrongful conduct,
15 thereby causing a wrongful foreclosure of Plaintiff’s Home.
16 As a result, the NOD and NOTS were executed and recorded in grave breach of the Note and
17 Deed of Trust terms, as well as in violation of Cal. Civ. Code § 2923.55, and are therefore void.
18 As a result, Plaintiff is being wrongfully deprived of title to the Property and of its beneficial
19 use and enjoyment.
20 Had Defendants and its agents sent the notices as alleged herein, Plaintiff would have tendered
21 the amount due, so that the claimed default may be cured and Plaintiff may be reinstated to his rights
22 and privileges under the Loan. (See Stepro Decl. ¶ 19)
23 Had Defendants and its agents contacted Plaintiff to assess his financial situation and explore
24 alternatives to foreclosure in compliance with Cal. Civ. Code § 2923.55, Plaintiff would have pursued
25 alternatives to foreclosure such as loss mitigation options offered by Defendants. (See Stepro Decl. ¶
26 20)
27 ///
28 ///
ESTAVILLO LAW GROUP
555 12th Street, Suite 1280
Oakland, CA 94607
Telephone: (510) 982-3001
Facsimile: (510) 982-3002
Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities
9
1 As a result of Defendants’ misconduct, Plaintiff has suffered, and continues to suffer various
2 damages and injuries, including but not limited to, the imminent loss of the Property. (See Stepro Decl.
3 ¶ 16) Pursuant to Civil Code § 2924.12, Plaintiff is entitled to injunctive relief.
4 3. Plaintiff is Likely to Succeed on the Merits of His Cause of Action for Negligence.
5 Defendants’ conduct, as alleged above, at the very least constitutes negligence. The elements
6 of a cause of action for negligence are: (a) a legal duty to use due care; (b) a breach of such legal duty;
7 (c) injury; and (4) the breach as the proximate or legal cause of the resulting injury. (Paz v. State of
8 California (2000) 22 Cal.4th 550, 559.)
9 A contract existed between Plaintiff and Defendants in the Loan document. Parties have a legal
10 duty to carry out the obligation and terms of the Agreement with due care. Defendants’ conduct
11 constitute breach of that legal duty in the following ways.
12 The Note states in relevant part in page 3 the following:
13 “Notices. All notices will be sent to your address as shown in this Agreement…”
14 (See Stepro Decl. ¶ 5, Exhibit A)
15 Further, the Deed of Trust states in relevant part in page 6 the following:
16 NOTICES. Any notice required to be given under this Deed of Trust shall be given
17 in writing, and shall be effective when actually delivered, when actually received
18 by telefacsimile (unless otherwise required by law, when deposited with a
19 nationally recognized overnight courier, or, if mailed, when deposited in the United
20 States mail, as first class, certified or registered mail postage prepaid, directed to
21 the addresses shown near the beginning of this Deed of Trust. Trustor requests that
22 copies of any notices of default and sale be directed to Truster's address shown near
23 the beginning of this Deed of Trust…”
24 (See Stepro Decl. ¶ 6, Exhibit B)
25 On September 6, 2023, Defendants caused to be recorded a Notice of Default (NOD), on
26 Plaintiff’s property for a default amount of $66,566.25 as of September 11, 2023. (See Stepro Decl. ¶
27 7, Exhibit C)
28 ///
ESTAVILLO LAW GROUP
555 12th Street, Suite 1280
Oakland, CA 94607
Telephone: (510) 982-3001
Facsimile: (510) 982-3002
Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities
10
1 Subsequently, on March 13, 2024, Defendants caused to be recorded a Notice of Trustee’s Sale
2 (NOTS) on Plaintiff’s property. (See Stepro Decl. ¶ 8, Exhibit D)
3 Defendants failed to comply with the terms of the Note and Deed of Trust when they failed to
4 send the Notice of Default (NOD) and the Notice of Trustee’s Sale (NOTS) to the Plaintiff as agreed
5 under the Note p. 3 and Deed of Trust p. 6, as such the pending Trustee sale is in breach of the Note
6 and Deed of Trust terms and therefore is void and should be vacated. (See Stepro Decl. ¶ 9)
7 The Plaintiff did not receive any notice that his Home is being foreclosed upon. Had Defendants
8 sent the NOD and NOTS to Plaintiff as agreed on the Note and Deed of Trust, Plaintiff would have
9 either remedied the default by paying $66,566.25, which is the amount due per the NOD or seek other
10 loss mitigation options. Rather, Defendants choose to pursue a Trustee Sale of Plaintiffs’ Property that
11 is worth $275,000.00 to recover a default amount of $66,566.25. (See Stepro Decl. ¶ 10; Exhibit C)
12 Defendants also breached the covenant of good faith and fair dealing by frustrating and denying
13 Plaintiff the benefit of the loan agreement through their wrongful conduct, thereby, causing a wrongful
14 foreclosure of Plaintiff’s Home.
15 As a result, the Trustee’s Sale and the subsequent recording of a TDUS were carried out in
16 grave breach of the Loan Agreement term, is therefore, void.
17 Defendants violated their legal duties when they failed to carry out the terms of the Agreement
18 with due care which include giving proper notices to the Plaintiff.
19 Defendants had a legal duty to carry out the Trustee’s Sale with due care by ensuring that the
20 foreclosure proceeding and supporting documents are in compliance with operative law.
21 This has damaged Plaintiff. Had Plaintiff been given proper notice of the foreclosing procedure,
22 he would have remedied any default or seek other alternatives to avoid the sale. (See Stepro Decl. ¶
23 10)
24 As a result of Defendants’ misconduct, Plaintiff has suffered, and continues to suffer various
25 damages and injuries, including but not limited to, the imminent loss of his property. (See Stepro Decl.
26 ¶ 15)
27 ///
28 ///
ESTAVILLO LAW GROUP
555 12th Street, Suite 1280
Oakland, CA 94607
Telephone: (510) 982-3001
Facsimile: (510) 982-3002
Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities
11
1 4. Plaintiff is Likely to Succeed on the Merits of His Cause of Action for Breach of
2 Covenant of Good Faith and Fair Dealing.
3 In every contract there is an implied covenant of good faith and fair dealing that neither party will
4 do anything which will injure the right of the other to receive the benefits of the agreement. This duty
5 is independent of the contract and attaches over and above the terms of the contract. (Digerati Holdings,
6 LLC v. Young Money Entertainment, LLC (2011) 194 Cal.App.4th 873, 885).
7 Defendants, acting by and through their agents, breached the covenant of good faith and fair
8 dealing by frustrating and denying Plaintiff the benefit of the loan agreement through their wrongful
9 conduct.
10 Defendants failed to send the NOD and NOTS to Plaintiff to notify Plaintiff that a foreclosure
11 proceeding has begun on his property. Had Defendants sent the NOD and NOTS, Plaintiff would have
12 either remedied the default or seek other options to avoid the sale. Rather, Defendants choose to pursue
13 a Trustee sale of Plaintiff’s Property that is worth $275,000.00 to recover a default amount of
14 $66,566.25. (See Stepro Decl. ¶ 10; Exhibit C)
15 Defendants breached the covenant of good faith and fair dealing by frustrating and denying
16 Plaintiff the benefit of the loan agreement through their wrongful conduct, thereby, causing a wrongful
17 foreclosure of Plaintiff’s Home.
18 These breaches of the covenant of good faith and fair dealing are material, intentional, and
19 Defendants failed, refused, and neglected to cure same.
20 As a result of Defendants’ misconduct, Plaintiff has suffered, and continues to suffer various
21 damages and injuries, including but not limited to, the imminent loss of his property. (See Stepro Decl.
22 ¶ 15)
23 5. Plaintiff is Likely to Succeed on the Merits of His Cause of Action for Wrongful
24 Foreclosure.
25 To state a claim for wrongful foreclosure, a plaintiff must show that (1) the trustee or mortgagee
26 caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale
27 in a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or
28 mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenge the
ESTAVILLO LAW GROUP
555 12th Street, Suite 1280
Oakland, CA 94607
Telephone: (510) 982-3001
Facsimile: (510) 982-3002
Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities
12
1 sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from
2 tendering. (Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal. App. 4th 394, 408 [emphasis
3 added].)
4 Here, Defendants conduct is illegal and constitute willful oppressive sale of Plaintiff’s property
5 in the following ways:
6 Defendants had the legal obligation and duty under the loan term to send notices to the Plaintiff
7 by delivering it through certified mail. Notices as important as NOD and NOTS showing that Plaintiff’s
8 home is being foreclosed upon were never sent to the Plaintiff. These notices were not sent by
9 Defendants through the means agreed to in the Loan Note, including via certified mail to ensure that
10 Plaintiff received it. Had Defendants sent the NOD and NOTS, Plaintiff would have either remedied
11 the default or seek other options to avoid the sale. Rather, Defendants choose to pursue a Trustee Sale
12 of Plaintiff’s Property that is worth $275,000.00 to recover a default amount of $66,566.25. (See Stepro
13 Decl. ¶ 10; Exhibit C)
14 As a result, the NOD and NOTS were executed and recorded in grave breach of the Loan Note
15 and Deed of Trust term, is therefore, void. (See Arroyo Decl. ¶ 9)
16 Plaintiff has undoubtedly been harmed by Defendant’s illegal and willful oppressive conduct
17 such that his home is being foreclosed and thus, constitutes Wrongful Foreclosure.
18 As a result of Defendants’ misconduct, Plaintiff has suffered, and continues to suffer various
19 damages and injuries, including but not limited to, the imminent loss of his property. (See Arroyo Decl.
20 ¶ 15)
21 6. Plaintiff is Likely to Succeed on the Merits of Its Cause of Action for Violation of
22 Business and Professions Code Section 17200 et seq.
23 Defendants’ conduct constitutes unlawful, unfair, and/or fraudulent business practices, as defined
24 in the California Business and Professions Code § 17200 et seq. California Business and Professions
25 Code § 17200 et seq. incorporates and provides a basis for enforcement of violations of other statutes
26 and laws and those violations as a business practice.
27 Specifically, Defendants’ violation of California Civil Code § 2923.55, constitutes unfair
28 business practices in violation of California Business and Professions Code § 17200 et seq.
ESTAVILLO LAW GROUP
555 12th Street, Suite 1280
Oakland, CA 94607
Telephone: (510) 982-3001
Facsimile: (510) 982-3002
Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities
13
1 As a result of Defendants’ misconduct, Plaintiff has suffered, and continues to suffer various
2 damages and injuries, including but not limited to, the imminent loss of the Property. (See Stepro Decl.
3 ¶ 22) Plaintiff seeks injunctive relief enjoining Defendants from engaging in the unfair business
4 practices described herein.
5 7. Plaintiff is Likely to Succeed on the Merits of His Cause of Action for Cancellation of
6 Instruments.
7 Under Cal. Civ. Code §3412, "[a) written instrument, in respect to which there is a reasonable
8 apprehension that if left outstanding it may cause serious injury to a person against whom it is void or
9 voidable, may, upon his application, be so adjudged, and ordered to be delivered up or cancelled."
10 Here, the NOD and NOTS are written instruments recorded in Kern County, California. The
11 Property to which all of the written instruments sought to be cancelled relates is situated in Kern
12 County. The documents appear valid on their face, when in fact, they are all subject to cancellation for
13 the reasons set forth herein.
14 Defendants had the legal obligation and duty under the loan term to send notices to the Plaintiff
15 by delivering it personally or through certified mail. Notices as important as NOD and NOTS showing
16 that Plaintiff’s home is being foreclosed upon were never sent to the Plaintiff. These notices were not
17 sent by Defendants through the means agreed to in the Loan Note and Deed of Trust, including via
18 certified mail to ensure that Plaintiff received them. Had Defendants sent the NOD and NOTS, Plaintiff
19 would have either remedied the default or seek other options to avoid the sale. Rather, Defendants
20 choose to pursue a Trustee Sale of Plaintiff’s Property that is worth $275,000.00 to recover a default
21 amount of $66,566.25. (See Stepro Decl. ¶ 10; Exhibit C)
22 As a result, the NOD and NOTS were executed and recorded in grave breach of the Loan Note
23 and Deed of Trust term, and are therefore void.
24 Had Defendants and their agents sent the notices as alleged herein, Plaintiff would have
25 tendered the amount due, so that the claimed default may be cured, and Plaintiff may be reinstated
26 to his rights and privileges under the Loan. (See Stepro Decl. ¶ 10)
27 ///
28 ///
ESTAVILLO LAW GROUP
555 12th Street, Suite 1280
Oakland, CA 94607
Telephone: (510) 982-3001
Facsimile: (510) 982-3002
Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities
14
1 The estate or interest claimed in the property by Defendants under the NOD and NOTS are
2 clouds on the Plaintiff's title to the property in that they depreciate its market value, restrict Plaintiff's
3 use and enjoyment of the property, and hinders Plaintiff's right to unrestricted alienation of the property.
4 If the trustee's deed is not delivered and canceled, serious injury will result to Plaintiff. If the
5 written instruments are not cancelled Plaintiff will be deprived of title and possession of the Property and title to
6 the Property will be clouded.
7 8. Plaintiff is Likely to Succeed on the Merits of His Cause of Action for Declaratory
8 Relief.
9 The two essential elements for declaratory relief are: “(1) a proper subject of declar
Preview
Jason W. Estavillo (Bar No. 188093) 1 David L. Chaffin (Bar No. 258459) 2 ESTAVILLO LAW GROUP 555 12th Street, Suite 1280 3 Oakland, CA 94607 Telephone: (510) 982-3001 4 Facsimile: (510) 982-3002 5 Email: jason@estavillolaw.com david@estavillolaw.com 6 7 Attorneys for Plaintiff, 8 GREGORY A. STEPRO 9 SUPERIOR COURT FOR THE STATE OF CALIFORNIA 10 COUNTY OF KERN 11 GREGORY A. STEPRO, ) Case No.: BCV-24-101264 12 ) 13 Plaintiff, ) MEMORANDUM OF POINTS AND ) AUTHORITIES IN SUPPORT OF EX 14 vs. ) PARTE APPLICATION FOR ) TEMPORARY RESTRAINING ORDER TO 15 SPECIALIZED LOAN SERVICING, LLC; ) CANCEL AND ENJOIN SALE OF GULF HARBOUR INVESTMENTS ) SUBJECT REAL PROPERTY AND ORDER 16 CORPORATION; THE MORTGAGE LAW ) TO SHOW CAUSE RE: PRELIMINARY FIRM, PLC; and DOES 1-20, ) INJUNCTION 17 ) 18 Defendants. ) ) Filed Concurrently With: 19 ) 1. Ex Parte Applicaiton; ) 2. Declaration of Gregory A. Stepro; 20 ) 3. Declaration of Alejandra Cornejo ) Garcia; and 21 ) 4. Proposed Order 22 ) ) Date: April 16, 2024 23 ) Time: 8:30 AM ) Dept.: H 24 ) 25 26 27 28 ESTAVILLO LAW GROUP 555 12th Street, Suite 1280 Oakland, CA 94607 Telephone: (510) 982-3001 Facsimile: (510) 982-3002 Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities 1 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 I. INTRODUCTION 3 Plaintiff alleges that the Defendants are currently in the process of effectuating a wrongful 4 foreclosure sale as a result of Defendants’ breach of contract and failure to comply with California law 5 by failing to send a Notice of Default, Notice of Sale or attempt to contact Plaintiff to discuss 6 alternatives since Plaintiff has ability to pay the loan in full. 7 II. STATEMENT OF FACTS 8 At all relevant times mentioned herein, Plaintiff, GREGORY A. STEPRO (“Plaintiff” or 9 “Homeowner”) is the rightful owner of the property commonly known as 456 East Hartley Ave., 10 Ridgecrest CA 93555 (the “Property” or “Home”). (See Declaration of Gregory A. Stepro (“Stepro 11 Decl.”) ¶ 2) 12 On May 6, 2004, Plaintiff executed a Mortgage Loan Note and Deed of Trust (hereafter the 13 “Loan”), in the amount of $150,000.00 in favor of E*TRADE Bank. The Loan was secured by the 14 Property by the Deed of Trust recorded with the Kern County Recorder’s Office on June 15, 2004, as 15 Instrument No. 0204137063. (See Stepro Decl. ¶ 3, Exhibits A and B) 16 Thereafter, Plaintiff experienced financial hardship, had challenges in making payments on the 17 Loan, and Defendants ceased providing Plaintiff with monthly mortgage statements. (See Stepro Decl. 18 ¶ 4) 19 The Note states in relevant part in page 3 the following: 20 “Notices. All notices will be sent to your address as shown in this Agreement…” 21 (See Stepro Decl. ¶ 5, Exhibit A) 22 Further, the Deed of Trust states in relevant part in page 6 the following: 23 NOTICES. Any notice required to be given under this Deed of Trust shall be given 24 in writing, and shall be effective when actually delivered, when actually received 25 by telefacsimile (unless otherwise required by law, when deposited with a 26 nationally recognized overnight courier, or, if mailed, when deposited in the United 27 States mail, as first class, certified or registered mail postage prepaid, directed to 28 the addresses shown near the beginning of this Deed of Trust. Trustor requests that ESTAVILLO LAW GROUP 555 12th Street, Suite 1280 Oakland, CA 94607 Telephone: (510) 982-3001 Facsimile: (510) 982-3002 Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities 2 1 copies of any notices of default and sale be directed to Truster's address shown near 2 the beginning of this Deed of Trust…” 3 (See Stepro Decl. ¶ 6, Exhibit B) 4 On September 6, 2023, Defendants caused to be recorded a Notice of Default (NOD), on 5 Plaintiff’s property for a default amount of $66,566.25 as of September 11, 2023. (See Stepro Decl. ¶ 6 7, Exhibit C) 7 Subsequently, on March 13, 2024, Defendants caused to be recorded a Notice of Trustee’s Sale 8 (NOTS) on Plaintiff’s property. (See Stepro Decl. ¶ 8, Exhibit D) 9 Defendants failed to comply with the terms of the Note and Deed of Trust when they failed to 10 send the Notice of Default (NOD) and the Notice of Trustee’s Sale (NOTS) to the Plaintiff as agreed 11 under the Note p. 3 and Deed of Trust p. 6, as such the pending Trustee sale is in breach of the Note 12 and Deed of Trust terms and therefore is void and should be vacated. (See Stepro Decl. ¶ 9) 13 The Plaintiff did not receive any notice that his Home is being foreclosed upon. Had Defendants 14 sent the NOD and NOTS to Plaintiff as agreed on the Note and Deed of Trust, Plaintiff would have 15 either remedied the default by paying $66,566.25, which is the amount due per the NOD or seek other 16 loss mitigation options. Rather, Defendants choose to pursue a Trustee Sale of Plaintiffs’ Property that 17 is worth $275,000.00 to recover a default amount of $66,566.25. (See Stepro Decl. ¶ 10; Exhibit C) 18 Further, Defendant Mortgage Law Firm, as alleged trustee under the DOT, recorded the NOD 19 without fulfilling the requirements (2) and (c) set forth in Cal. Civ. Code § 2923.55: 20 (2) A mortgage servicer shall contact the borrower in person or by telephone in order to 21 assess the borrower's financial situation and explore options for the borrower to avoid 22 foreclosure. During the initial contact, the mortgage servicer shall advise the borrower 23 that he or she has the right to request a subsequent meeting and, if requested, the 24 mortgage servicer shall schedule the meeting to occur within 14 days. The assessment 25 of the borrower's financial situation and discussion of options may occur during the first 26 contact, or at the subsequent meeting scheduled for that purpose. In either case, the 27 borrower shall be provided the toll-free telephone number made available by the United 28 ESTAVILLO LAW GROUP 555 12th Street, Suite 1280 Oakland, CA 94607 Telephone: (510) 982-3001 Facsimile: (510) 982-3002 Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities 3 1 States Department of Housing and Urban Development (HUD) to find a HUD-certified 2 housing counseling agency. Any meeting may occur telephonically. 3 (See Stepro Decl. ¶ 11) 4 Defendants recorded NOD without complying with the requirement of Cal. Civ. Code § 5 2923.55. Defendants failed to contact the Plaintiff or show efforts made to contact the Plaintiff. (See 6 Stepro Decl. ¶ 12; Exhibit C) 7 Plaintiff never received mails or phone calls from Defendants, nor was Plaintiff provided with 8 the toll-free telephone number made available by the United States Department of Housing and Urban 9 Development (HUD) to find a HUD-certified housing counseling agency. (See Stepro Decl. ¶ 13) 10 Defendants recorded the NOD without contacting Plaintiff “in person or by telephone” to assess 11 Plaintiff’s financial situation and explore options to avoid foreclosure. Subsequently, Defendants 12 recorded a Notice of Trustee’s Sale (“NOTS”) resulting from the recorded NOD. Thus, the NOD and 13 the resulting NOTS were recorded in violation of Cal. Civ. Code § 2923.55. (See Stepro Decl. ¶ 14) 14 Since Defendants also failed to notify or correspond with Plaintiff in writing concerning its 15 options regarding the NOD and alleged default, Defendants recorded the NOD in violation of Cal. 16 Civ. Code § 2923.55. (See Stepro Decl. ¶ 15) 17 Defendants’ failures to discuss options and provide notice to Plaintiff have caused Plaintiff 18 significant harm because Plaintiff is now at imminent risk of losing his Property. (See Stepro Decl. 19 ¶ 16) 20 The declaration of Defendant SLS attached to the NOD states that, “The mortgage servicer has 21 tried with due diligence to contact the borrower as required by California Civil Code § 2923.55(1) but 22 has not made contact despite such due diligence. Thirty days have passed since these due diligence 23 efforts were satisfied.” (See Stepro Decl. ¶ 17; Exhibit C) 24 The declaration is false because Defendant SLS never made an attempt to contact Plaintiff as 25 stated in the declaration. Plaintiff did not receive any mail from Defendant SLS stating that it was trying 26 to contact him. Plaintiff has not changed his phone number nor was his phone disconnected and did not 27 receive any call or missed call from Defendant SLS showing that it is trying to contact him. (See Stepro 28 Decl. ¶ 18) ESTAVILLO LAW GROUP 555 12th Street, Suite 1280 Oakland, CA 94607 Telephone: (510) 982-3001 Facsimile: (510) 982-3002 Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities 4 1 Defendants by making a false declaration, breached the covenant of good faith and fair dealing 2 by frustrating and denying Plaintiff the benefit of the loan agreement through their wrongful conduct, 3 thereby causing a wrongful foreclosure of Plaintiff’s Home. 4 As a result, the NOD and NOTS were executed and recorded in grave breach of the Note and 5 Deed of Trust terms, as well as in violation of Cal. Civ. Code § 2923.55, and are therefore void. 6 As a result, Plaintiff is being wrongfully deprived of title to the Property and of its beneficial 7 use and enjoyment. 8 Had Defendants and its agents sent the notices as alleged herein, Plaintiff would have tendered 9 the amount due, so that the claimed default may be cured and Plaintiff may be reinstated to his rights 10 and privileges under the Loan. (See Stepro Decl. ¶ 19) 11 Had Defendants and its agents contacted Plaintiff to assess his financial situation and explore 12 alternatives to foreclosure in compliance with Cal. Civ. Code § 2923.55, Plaintiff would have pursued 13 alternatives to foreclosure such as loss mitigation options offered by Defendants. (See Stepro Decl. ¶ 14 20) 15 The NOD and NOTS are clouds on the Plaintiff’s title to the Property, resulting in depreciation 16 of its market value, restricting Plaintiff’s use and enjoyment of the Property, and hindering Plaintiff’s 17 right to unrestricted alienation of the Property. If the NOD and NOTS are not delivered and canceled, 18 serious injury will result to Plaintiff. (See Stepro Decl. ¶ 21) 19 If Plaintiff loses his Home, Plaintiff with his family, will suffer severe irreparable harm and 20 extreme hardship. As such he cannot be compensated for its loss through money damages. (See Stepro 21 Decl. ¶ 22) 22 III. LEGAL ARGUMENT 23 A. Legal Standard. 24 Preliminary Injunctions may issue under Cal. Code Civ. Proc. § 527. This injunctive relief is 25 appropriate where: (1) it appears from the complaint that the plaintiff is entitled to the relief demanded, 26 and the relief, or any part thereof, consists in restraining the commission or continuance of the act 27 complained of; or (2) pecuniary compensation would not afford adequate relief; or (3) it would be 28 extremely difficult to ascertain the amount of compensation which would afford adequate relief. (Cal. ESTAVILLO LAW GROUP 555 12th Street, Suite 1280 Oakland, CA 94607 Telephone: (510) 982-3001 Facsimile: (510) 982-3002 Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities 5 1 Code Civ. Proc. § 526.) When determining whether injunctive relief should issue, courts consider (a) 2 the likelihood that the moving party will prevail on the merits of his claim and (b) the harm to the 3 respective parties if relief is granted or denied. (Sahlolbei v. Providence Healthcare, Inc. (2003) 112 4 Cal.App.4th 1137, 1145.) In addition, the court must conduct a two-prong equitable balancing test, 5 weighing the probability of prevailing on the merits against the determination as to who is likely to 6 suffer greater harm. (Robbins v. Superior Court (1985) 38 Cal.3d 199, 206. Shoemaker v. County of 7 Los Angeles (1995) 37 Cal.App.4th 618, 633.) This determination involves a mix of the two elements, 8 and the greater the Plaintiff’s showing on one element, the weaker it may be on the other. (Butt v. State 9 of Calif. (1992) 4 Cal.4th 668, 678.) 10 B. Plaintiff is Likely to Succeed on the Merits of His Causes of Action. 11 1. Plaintiff is Likely to Succeed on the Merits of His Cause of Action for Breach of 12 Contract. 13 A cause of action for breach of contract lies where (1) a contract exists; (2) plaintiff performed 14 under the contract; (3) defendant breached its obligations under the contract; and (4) plaintiff has been 15 damaged from the breach. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 16 Cal.App.3d 1371, 1388.) 17 A contract existed between Plaintiff and Defendants in the Note and Deed of Trust documents. 18 Defendants breached the loan agreement in the following ways. 19 The Note states in relevant part in page 3 the following: 20 “Notices. All notices will be sent to your address as shown in this Agreement…” 21 (See Stepro Decl. ¶ 5, Exhibit A) 22 Further, the Deed of Trust states in relevant part in page 6 the following: 23 NOTICES. Any notice required to be given under this Deed of Trust shall be given 24 in writing, and shall be effective when actually delivered, when actually received 25 by telefacsimile (unless otherwise required by law, when deposited with a 26 nationally recognized overnight courier, or, if mailed, when deposited in the United 27 States mail, as first class, certified or registered mail postage prepaid, directed to 28 the addresses shown near the beginning of this Deed of Trust. Trustor requests that ESTAVILLO LAW GROUP 555 12th Street, Suite 1280 Oakland, CA 94607 Telephone: (510) 982-3001 Facsimile: (510) 982-3002 Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities 6 1 copies of any notices of default and sale be directed to Truster's address shown near 2 the beginning of this Deed of Trust…” 3 (See Stepro Decl. ¶ 6, Exhibit B) 4 On September 6, 2023, Defendants caused to be recorded a Notice of Default (NOD), on 5 Plaintiff’s property for a default amount of $66,566.25 as of September 11, 2023. (See Stepro Decl. ¶ 6 7, Exhibit C) 7 Subsequently, on March 13, 2024, Defendants caused to be recorded a Notice of Trustee’s Sale 8 (NOTS) on Plaintiff’s property. (See Stepro Decl. ¶ 8, Exhibit D) 9 Defendants failed to comply with the terms of the Note and Deed of Trust when they failed to 10 send the Notice of Default (NOD) and the Notice of Trustee’s Sale (NOTS) to the Plaintiff as agreed 11 under the Note p. 3 and Deed of Trust p. 6, as such the pending Trustee sale is in breach of the Note 12 and Deed of Trust terms and therefore is void and should be vacated. (See Stepro Decl. ¶ 9) 13 The Plaintiff did not receive any notice that his Home is being foreclosed upon. Had Defendants 14 sent the NOD and NOTS to Plaintiff as agreed on the Note and Deed of Trust, Plaintiff would have 15 either remedied the default by paying $66,566.25, which is the amount due per the NOD or seek other 16 loss mitigation options. Rather, Defendants choose to pursue a Trustee Sale of Plaintiffs’ Property that 17 is worth $275,000.00 to recover a default amount of $66,566.25. (See Stepro Decl. ¶ 10; Exhibit C) 18 Defendants breached the terms of the contract when they failed to send the NOD and NOTS in 19 the manner required by the Note and Deed of Trust to notify Plaintiff that a foreclosure proceeding has 20 commenced on his Property. 21 As a result of Defendants’ misconduct, Plaintiff has suffered, and continues to suffer various 22 damages and injuries, including but not limited to, the imminent loss of his property. (See Stepro Decl. 23 ¶ 15) 24 /// 25 /// 26 /// 27 /// 28 /// ESTAVILLO LAW GROUP 555 12th Street, Suite 1280 Oakland, CA 94607 Telephone: (510) 982-3001 Facsimile: (510) 982-3002 Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities 7 1 2. Plaintiff is Likely to Succeed on the Merits of His Cause of Action for Violation of 2 Cal. Civ. Code § 2923.55. 3 Defendant Defendant Mortgage Law Firm, as alleged trustee under the DOT, recorded the 4 NOD without fulfilling the requirements (2) and (c) set forth in Cal. Civ. Code § 2923.55: 5 (2) A mortgage servicer shall contact the borrower in person or by telephone in order to 6 assess the borrower's financial situation and explore options for the borrower to avoid 7 foreclosure. During the initial contact, the mortgage servicer shall advise the borrower 8 that he or she has the right to request a subsequent meeting and, if requested, the 9 mortgage servicer shall schedule the meeting to occur within 14 days. The assessment 10 of the borrower's financial situation and discussion of options may occur during the first 11 contact, or at the subsequent meeting scheduled for that purpose. In either case, the 12 borrower shall be provided the toll-free telephone number made available by the United 13 States Department of Housing and Urban Development (HUD) to find a HUD-certified 14 housing counseling agency. Any meeting may occur telephonically. 15 (See Stepro Decl. ¶ 11) 16 Defendants recorded NOD without complying with the requirement of Cal. Civ. Code § 17 2923.55. Defendants failed to contact the Plaintiff or show efforts made to contact the Plaintiff. (See 18 Stepro Decl. ¶ 12; Exhibit C) 19 Plaintiff never received mails or phone calls from Defendants, nor was Plaintiff provided with 20 the toll-free telephone number made available by the United States Department of Housing and Urban 21 Development (HUD) to find a HUD-certified housing counseling agency. (See Stepro Decl. ¶ 13) 22 Defendants recorded the NOD without contacting Plaintiff “in person or by telephone” to assess 23 Plaintiff’s financial situation and explore options to avoid foreclosure. Subsequently, Defendants 24 recorded a Notice of Trustee’s Sale (“NOTS”) resulting from the recorded NOD. Thus, the NOD and 25 the resulting NOTS were recorded in violation of Cal. Civ. Code § 2923.55. (See Stepro Decl. ¶ 14) 26 Since Defendants also failed to notify or correspond with Plaintiff in writing concerning its 27 options regarding the NOD and alleged default, Defendants recorded the NOD in violation of Cal. 28 Civ. Code § 2923.55. (See Stepro Decl. ¶ 15) ESTAVILLO LAW GROUP 555 12th Street, Suite 1280 Oakland, CA 94607 Telephone: (510) 982-3001 Facsimile: (510) 982-3002 Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities 8 1 Defendants’ failures to discuss options and provide notice to Plaintiff have caused Plaintiff 2 significant harm because Plaintiff is now at imminent risk of losing his Property. (See Stepro Decl. 3 ¶ 16) 4 The declaration of Defendant SLS attached to the NOD states that, “The mortgage servicer has 5 tried with due diligence to contact the borrower as required by California Civil Code § 2923.55(1) but 6 has not made contact despite such due diligence. Thirty days have passed since these due diligence 7 efforts were satisfied.” (See Stepro Decl. ¶ 17; Exhibit C) 8 The declaration is false because Defendant SLS never made an attempt to contact Plaintiff as 9 stated in the declaration. Plaintiff did not receive any mail from Defendant SLS stating that it was trying 10 to contact him. Plaintiff has not changed his phone number nor was his phone disconnected and did not 11 receive any call or missed call from Defendant SLS showing that it is trying to contact him. (See Stepro 12 Decl. ¶ 18) 13 Defendants by making a false declaration, breached the covenant of good faith and fair dealing 14 by frustrating and denying Plaintiff the benefit of the loan agreement through their wrongful conduct, 15 thereby causing a wrongful foreclosure of Plaintiff’s Home. 16 As a result, the NOD and NOTS were executed and recorded in grave breach of the Note and 17 Deed of Trust terms, as well as in violation of Cal. Civ. Code § 2923.55, and are therefore void. 18 As a result, Plaintiff is being wrongfully deprived of title to the Property and of its beneficial 19 use and enjoyment. 20 Had Defendants and its agents sent the notices as alleged herein, Plaintiff would have tendered 21 the amount due, so that the claimed default may be cured and Plaintiff may be reinstated to his rights 22 and privileges under the Loan. (See Stepro Decl. ¶ 19) 23 Had Defendants and its agents contacted Plaintiff to assess his financial situation and explore 24 alternatives to foreclosure in compliance with Cal. Civ. Code § 2923.55, Plaintiff would have pursued 25 alternatives to foreclosure such as loss mitigation options offered by Defendants. (See Stepro Decl. ¶ 26 20) 27 /// 28 /// ESTAVILLO LAW GROUP 555 12th Street, Suite 1280 Oakland, CA 94607 Telephone: (510) 982-3001 Facsimile: (510) 982-3002 Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities 9 1 As a result of Defendants’ misconduct, Plaintiff has suffered, and continues to suffer various 2 damages and injuries, including but not limited to, the imminent loss of the Property. (See Stepro Decl. 3 ¶ 16) Pursuant to Civil Code § 2924.12, Plaintiff is entitled to injunctive relief. 4 3. Plaintiff is Likely to Succeed on the Merits of His Cause of Action for Negligence. 5 Defendants’ conduct, as alleged above, at the very least constitutes negligence. The elements 6 of a cause of action for negligence are: (a) a legal duty to use due care; (b) a breach of such legal duty; 7 (c) injury; and (4) the breach as the proximate or legal cause of the resulting injury. (Paz v. State of 8 California (2000) 22 Cal.4th 550, 559.) 9 A contract existed between Plaintiff and Defendants in the Loan document. Parties have a legal 10 duty to carry out the obligation and terms of the Agreement with due care. Defendants’ conduct 11 constitute breach of that legal duty in the following ways. 12 The Note states in relevant part in page 3 the following: 13 “Notices. All notices will be sent to your address as shown in this Agreement…” 14 (See Stepro Decl. ¶ 5, Exhibit A) 15 Further, the Deed of Trust states in relevant part in page 6 the following: 16 NOTICES. Any notice required to be given under this Deed of Trust shall be given 17 in writing, and shall be effective when actually delivered, when actually received 18 by telefacsimile (unless otherwise required by law, when deposited with a 19 nationally recognized overnight courier, or, if mailed, when deposited in the United 20 States mail, as first class, certified or registered mail postage prepaid, directed to 21 the addresses shown near the beginning of this Deed of Trust. Trustor requests that 22 copies of any notices of default and sale be directed to Truster's address shown near 23 the beginning of this Deed of Trust…” 24 (See Stepro Decl. ¶ 6, Exhibit B) 25 On September 6, 2023, Defendants caused to be recorded a Notice of Default (NOD), on 26 Plaintiff’s property for a default amount of $66,566.25 as of September 11, 2023. (See Stepro Decl. ¶ 27 7, Exhibit C) 28 /// ESTAVILLO LAW GROUP 555 12th Street, Suite 1280 Oakland, CA 94607 Telephone: (510) 982-3001 Facsimile: (510) 982-3002 Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities 10 1 Subsequently, on March 13, 2024, Defendants caused to be recorded a Notice of Trustee’s Sale 2 (NOTS) on Plaintiff’s property. (See Stepro Decl. ¶ 8, Exhibit D) 3 Defendants failed to comply with the terms of the Note and Deed of Trust when they failed to 4 send the Notice of Default (NOD) and the Notice of Trustee’s Sale (NOTS) to the Plaintiff as agreed 5 under the Note p. 3 and Deed of Trust p. 6, as such the pending Trustee sale is in breach of the Note 6 and Deed of Trust terms and therefore is void and should be vacated. (See Stepro Decl. ¶ 9) 7 The Plaintiff did not receive any notice that his Home is being foreclosed upon. Had Defendants 8 sent the NOD and NOTS to Plaintiff as agreed on the Note and Deed of Trust, Plaintiff would have 9 either remedied the default by paying $66,566.25, which is the amount due per the NOD or seek other 10 loss mitigation options. Rather, Defendants choose to pursue a Trustee Sale of Plaintiffs’ Property that 11 is worth $275,000.00 to recover a default amount of $66,566.25. (See Stepro Decl. ¶ 10; Exhibit C) 12 Defendants also breached the covenant of good faith and fair dealing by frustrating and denying 13 Plaintiff the benefit of the loan agreement through their wrongful conduct, thereby, causing a wrongful 14 foreclosure of Plaintiff’s Home. 15 As a result, the Trustee’s Sale and the subsequent recording of a TDUS were carried out in 16 grave breach of the Loan Agreement term, is therefore, void. 17 Defendants violated their legal duties when they failed to carry out the terms of the Agreement 18 with due care which include giving proper notices to the Plaintiff. 19 Defendants had a legal duty to carry out the Trustee’s Sale with due care by ensuring that the 20 foreclosure proceeding and supporting documents are in compliance with operative law. 21 This has damaged Plaintiff. Had Plaintiff been given proper notice of the foreclosing procedure, 22 he would have remedied any default or seek other alternatives to avoid the sale. (See Stepro Decl. ¶ 23 10) 24 As a result of Defendants’ misconduct, Plaintiff has suffered, and continues to suffer various 25 damages and injuries, including but not limited to, the imminent loss of his property. (See Stepro Decl. 26 ¶ 15) 27 /// 28 /// ESTAVILLO LAW GROUP 555 12th Street, Suite 1280 Oakland, CA 94607 Telephone: (510) 982-3001 Facsimile: (510) 982-3002 Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities 11 1 4. Plaintiff is Likely to Succeed on the Merits of His Cause of Action for Breach of 2 Covenant of Good Faith and Fair Dealing. 3 In every contract there is an implied covenant of good faith and fair dealing that neither party will 4 do anything which will injure the right of the other to receive the benefits of the agreement. This duty 5 is independent of the contract and attaches over and above the terms of the contract. (Digerati Holdings, 6 LLC v. Young Money Entertainment, LLC (2011) 194 Cal.App.4th 873, 885). 7 Defendants, acting by and through their agents, breached the covenant of good faith and fair 8 dealing by frustrating and denying Plaintiff the benefit of the loan agreement through their wrongful 9 conduct. 10 Defendants failed to send the NOD and NOTS to Plaintiff to notify Plaintiff that a foreclosure 11 proceeding has begun on his property. Had Defendants sent the NOD and NOTS, Plaintiff would have 12 either remedied the default or seek other options to avoid the sale. Rather, Defendants choose to pursue 13 a Trustee sale of Plaintiff’s Property that is worth $275,000.00 to recover a default amount of 14 $66,566.25. (See Stepro Decl. ¶ 10; Exhibit C) 15 Defendants breached the covenant of good faith and fair dealing by frustrating and denying 16 Plaintiff the benefit of the loan agreement through their wrongful conduct, thereby, causing a wrongful 17 foreclosure of Plaintiff’s Home. 18 These breaches of the covenant of good faith and fair dealing are material, intentional, and 19 Defendants failed, refused, and neglected to cure same. 20 As a result of Defendants’ misconduct, Plaintiff has suffered, and continues to suffer various 21 damages and injuries, including but not limited to, the imminent loss of his property. (See Stepro Decl. 22 ¶ 15) 23 5. Plaintiff is Likely to Succeed on the Merits of His Cause of Action for Wrongful 24 Foreclosure. 25 To state a claim for wrongful foreclosure, a plaintiff must show that (1) the trustee or mortgagee 26 caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale 27 in a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or 28 mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenge the ESTAVILLO LAW GROUP 555 12th Street, Suite 1280 Oakland, CA 94607 Telephone: (510) 982-3001 Facsimile: (510) 982-3002 Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities 12 1 sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from 2 tendering. (Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal. App. 4th 394, 408 [emphasis 3 added].) 4 Here, Defendants conduct is illegal and constitute willful oppressive sale of Plaintiff’s property 5 in the following ways: 6 Defendants had the legal obligation and duty under the loan term to send notices to the Plaintiff 7 by delivering it through certified mail. Notices as important as NOD and NOTS showing that Plaintiff’s 8 home is being foreclosed upon were never sent to the Plaintiff. These notices were not sent by 9 Defendants through the means agreed to in the Loan Note, including via certified mail to ensure that 10 Plaintiff received it. Had Defendants sent the NOD and NOTS, Plaintiff would have either remedied 11 the default or seek other options to avoid the sale. Rather, Defendants choose to pursue a Trustee Sale 12 of Plaintiff’s Property that is worth $275,000.00 to recover a default amount of $66,566.25. (See Stepro 13 Decl. ¶ 10; Exhibit C) 14 As a result, the NOD and NOTS were executed and recorded in grave breach of the Loan Note 15 and Deed of Trust term, is therefore, void. (See Arroyo Decl. ¶ 9) 16 Plaintiff has undoubtedly been harmed by Defendant’s illegal and willful oppressive conduct 17 such that his home is being foreclosed and thus, constitutes Wrongful Foreclosure. 18 As a result of Defendants’ misconduct, Plaintiff has suffered, and continues to suffer various 19 damages and injuries, including but not limited to, the imminent loss of his property. (See Arroyo Decl. 20 ¶ 15) 21 6. Plaintiff is Likely to Succeed on the Merits of Its Cause of Action for Violation of 22 Business and Professions Code Section 17200 et seq. 23 Defendants’ conduct constitutes unlawful, unfair, and/or fraudulent business practices, as defined 24 in the California Business and Professions Code § 17200 et seq. California Business and Professions 25 Code § 17200 et seq. incorporates and provides a basis for enforcement of violations of other statutes 26 and laws and those violations as a business practice. 27 Specifically, Defendants’ violation of California Civil Code § 2923.55, constitutes unfair 28 business practices in violation of California Business and Professions Code § 17200 et seq. ESTAVILLO LAW GROUP 555 12th Street, Suite 1280 Oakland, CA 94607 Telephone: (510) 982-3001 Facsimile: (510) 982-3002 Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities 13 1 As a result of Defendants’ misconduct, Plaintiff has suffered, and continues to suffer various 2 damages and injuries, including but not limited to, the imminent loss of the Property. (See Stepro Decl. 3 ¶ 22) Plaintiff seeks injunctive relief enjoining Defendants from engaging in the unfair business 4 practices described herein. 5 7. Plaintiff is Likely to Succeed on the Merits of His Cause of Action for Cancellation of 6 Instruments. 7 Under Cal. Civ. Code §3412, "[a) written instrument, in respect to which there is a reasonable 8 apprehension that if left outstanding it may cause serious injury to a person against whom it is void or 9 voidable, may, upon his application, be so adjudged, and ordered to be delivered up or cancelled." 10 Here, the NOD and NOTS are written instruments recorded in Kern County, California. The 11 Property to which all of the written instruments sought to be cancelled relates is situated in Kern 12 County. The documents appear valid on their face, when in fact, they are all subject to cancellation for 13 the reasons set forth herein. 14 Defendants had the legal obligation and duty under the loan term to send notices to the Plaintiff 15 by delivering it personally or through certified mail. Notices as important as NOD and NOTS showing 16 that Plaintiff’s home is being foreclosed upon were never sent to the Plaintiff. These notices were not 17 sent by Defendants through the means agreed to in the Loan Note and Deed of Trust, including via 18 certified mail to ensure that Plaintiff received them. Had Defendants sent the NOD and NOTS, Plaintiff 19 would have either remedied the default or seek other options to avoid the sale. Rather, Defendants 20 choose to pursue a Trustee Sale of Plaintiff’s Property that is worth $275,000.00 to recover a default 21 amount of $66,566.25. (See Stepro Decl. ¶ 10; Exhibit C) 22 As a result, the NOD and NOTS were executed and recorded in grave breach of the Loan Note 23 and Deed of Trust term, and are therefore void. 24 Had Defendants and their agents sent the notices as alleged herein, Plaintiff would have 25 tendered the amount due, so that the claimed default may be cured, and Plaintiff may be reinstated 26 to his rights and privileges under the Loan. (See Stepro Decl. ¶ 10) 27 /// 28 /// ESTAVILLO LAW GROUP 555 12th Street, Suite 1280 Oakland, CA 94607 Telephone: (510) 982-3001 Facsimile: (510) 982-3002 Stepro v. Specialized Loan Servicing, LLC, et al. Memorandum of Points& Authorities 14 1 The estate or interest claimed in the property by Defendants under the NOD and NOTS are 2 clouds on the Plaintiff's title to the property in that they depreciate its market value, restrict Plaintiff's 3 use and enjoyment of the property, and hinders Plaintiff's right to unrestricted alienation of the property. 4 If the trustee's deed is not delivered and canceled, serious injury will result to Plaintiff. If the 5 written instruments are not cancelled Plaintiff will be deprived of title and possession of the Property and title to 6 the Property will be clouded. 7 8. Plaintiff is Likely to Succeed on the Merits of His Cause of Action for Declaratory 8 Relief. 9 The two essential elements for declaratory relief are: “(1) a proper subject of declar