United States District Court, D. Arizona
For Angel Ortiz, Maria Ortiz, Plaintiffs: Aaron M Green, LEAD ATTORNEY, Law Office of Aaron Green PC, Phoenix, AZ.
For Trinity Financial Services LLC, an Arizona limited liability company, Defendant: Richard Joseph Reynolds, LEAD ATTORNEY, Burke Williams & Sorensen LLP - Santa Ana, CA, Santa Ana, CA.
Cindy K. Jorgenson, United States District Judge.
This matter is before the Court on Plaintiffs' Motion for a Preliminary Injunction to prevent the foreclosure sale of their residence at 1642 N. Placita Colonia De Oro, Tucson, AZ 85745 (Property); the sale has been stayed until April 2, 2015. Oral argument was heard on March 23, 2015.
The Court will deny the Motion.
This case was originally filed in Pima County Superior Court on December 17, 2014, and the Summons and Complaint was served on former Defendant MTC Financial Incorporated on January 2, 2015; the claims are for wrongful foreclosure in connection with a non-judicial foreclosure sale and breach of contract. (Doc. 1, Ex. A.) Plaintiffs asserted wrongful foreclosure based on the statute of limitations. Defendant removed the case to the Federal District Court. Defendant asserts that the amount in controversy is in excess of $75,000 and that there is diversity jurisdiction. (Doc. 1 at 4, Ex. M.)
In addition to the Complaint, Plaintiffs filed an Application for a TRO and Order to Show Cause. (Docs. 5, 6.) The sale was originally scheduled for January 9, 2015; this Court issued an OSC on January 6, 2015, and set the matter for a hearing for January 8, 2015. The Application for a TRO and the hearing were vacated when the parties advised that they were attempting to resolve the case and that the sale was stayed until January 30, 2015. (Doc.10.) Thereafter, the parties agreed to extend the sale date to February 17; however, the parties were unable to resolve the matter in settlement talks, and Plaintiffs requested that the Court hear the Motion for a Preliminary Injunction. ( See Docs. 12, 13.) The parties agreed by Stipulation to extend the foreclosure sale date until March 3, 2015. (Doc. 13.) On February 18, the parties represented that they had agreed to stay the sale until April 2, and the Court so ordered and set the hearing on the preliminary injunction for March 23.
Plaintiffs filed a First Amended Complaint (FAC) on or about February 17. (Doc. 17.) It raises an additional claim of laches. Defendant filed a Motion to Dismiss. (Doc. 20.) The preliminary injunction motion was not amended to include the laches argument, but Defendant filed a response to the motion that addresses laches. (Doc. 25.)
The facts are taken from the FAC and responses to the preliminary injunction motion.
According to Plaintiffs, they purchased the real property located at 1642 N. Placita Colonia De Oro, Tucson, AZ 85745 before 2005. They purchased the Property in part with a first mortgage lien executed in favor of National City Mortgage. Plaintiffs also took out a second mortgage lien
on the Subject Property executed in favor of GMAC Mortgage Corporation. Defendant Trinity is the assignee of GMAC's lien interest in the second mortgage.
Plaintiffs have failed to make payments on the GMAC Mortgage to Defendant Trinity and/or GMAC since September 2005. Plaintiffs filed for bankruptcy on June 1, 2005. The last payment of any kind made on the GMAC Mortgage was made prior to March 2007 and was made by the Bankruptcy Trustee on pre-petition amounts due.
Defendant asserts that it acquired the second trust deed lien in or about early 2014. It noticed a Trustee's Sale of the Subject Property on or about October 8, 2014. Plaintiffs argue that Defendant, as assignee of the GMAC Mortgage, failed to begin its action to foreclose its lien within the statutory time period to commence an action to foreclose a lien or, alternatively, delayed the sale which prejudiced Plaintiffs.
Plaintiffs have demanded that Defendant cancel the Trustee Sale but ...