United States District Court, D. Arizona
Allen C. Taylor and Lynell M. Taylor, Plaintiffs,
Deutsche Bank National Trust Company, as Trustee for Morgan Stanley Capital 1 Inc. Trust 2006-NC2 Mortgage Pass-Through Certificates, Series 2006-NC2, Defendant.
Douglas L. Raves United States District Judge.
Allen and Lynell Taylor have appealed from the orders
dismissing the complaint and denying leave to amend and the
entry of judgment in favor of Defendant Deutsche Bank
National Trust Company. (Docs. 20, 29, 30, 34.) Before the
Court is Plaintiffs' motion to stay judgment and enjoin
trustee sale pending appeal. (Doc. 44.) The motion is fully
briefed, and neither side has requested oral argument. (Docs.
45, 46.) For reasons stated below, the motion is denied.
suit arises out of a residential loan transaction more than
ten years ago. Plaintiffs claim to have rescinded the note
and deed of trust in 2008, but entered into a loan
modification agreement two years later. Plaintiffs stopped
making loan payments in early 2016.
filed suit against Defendant in state court in May 2016, and
Defendant removed the case to this Court one month later.
(Doc. 1.) Plaintiffs thereafter filed a first amended
complaint purporting to assert three claims: quiet title,
false recordings perpetuated on rescinded loan, and violation
of the Truth in Lending Act. (Doc. 10.)
October 2016, the Court granted Defendant's motion to
dismiss because Plaintiffs' rescission theory failed and
their claims otherwise were barred by the statute of
limitations and the loan modification agreement. (Doc. 20.)
Three months later, the Court denied Plaintiffs leave to file
a second amended complaint and denied their motion to vacate
the dismissal order. (Doc. 29.) The Clerk then entered
judgment in favor of Defendant, noting that Plaintiffs were
“to take nothing” and the “complaint and
action are dismissed.” (Doc. 30.)
Plaintiffs' default on the loan, Defendant noticed a
trustee's sale of the subject property for August 9,
2017. Plaintiff then filed the present motion for a stay of
the judgment and to enjoin the trustee's sale pursuant to
Federal Rule of Civil Procedure 62(c), (d) and (f). (Doc.
Rule 62(c) Does Not Apply
express terms, Rule 62(c) applies when an appeal is pending
from an order or judgment that “grants, dissolves, or
denies an injunction[.]” The orders and judgment
appealed from in this case, however, do not involve an
injunction. The Court recognizes that Plaintiffs' claim
for quiet title would, as a practical matter, preclude
foreclosure if proven to have merit. Dismissing a claim that
would have the effect of avoiding a potential future
foreclosure, however, is not the equivalent of a court order
denying an injunction.
short, “Rule 62(c) does not apply, because that rule
applies to injunctions, and no injunction is involved
here.” Bank of N.Y. Mellon v. Worth, No.
3:13-cv-1489 (MPS), 2015 WL 1780719, at *4 (D. Conn. Apr. 20,
2015); see Jones v. Bd. of Supervisors of the La. Univ.
Sys., No. 14-2304, 2016 WL 5362700, at *1 n.2 (E.D. La.
Sept. 26, 2016) (“Rule 62(c) governs injunctions
pending an appeal; there is no injunction in this
case.”). The Court denies the request to enjoin the
trustee sale under Rule 62(c).
worth noting that even if the Court's orders and judgment
could be construed as denying injunctive relief, Plaintiffs
have not shown that an injunction pending appeal is
warranted. The standard for obtaining a Rule 62(c) injunction
of a trustee's sale pending appeal is the same as the
standard for obtaining a preliminary injunction under Rule
65. RCC South LLC v. SFI Belmont LLC, No.
CV-11-2356-PHX-DGC, 2011WL 6019279, at *1 (D. Ariz. Dec. 5,
2011). The plaintiffs must show that they are likely to
succeed on appeal, will suffer irreparable harm without an
injunction, the balance of hardships weighs in their favor,
and an injunction serves the public interest. Ranchers
Cattlemen Action Legal Fund United Stockgrowers of Am. v.
U.S. Dep't of Agric., 415 F.3d 1078, 1092 (9th Cir.
2005). Alternatively, the plaintiffs must “demonstrate
either a combination of probable success on the
merits and the possibility of irreparable injury or
that serious questions are raised and the balance of
hardships tips sharply in [their] favor.” Id.
“Serious questions ‘must involve a fair chance of
success on the merits.'” RCC South LLC,
2011 WL 6019279 at *1 (quoting Republic of the
Philippines v. Marcos, 862 F.2d 1355, 1362 (9th Cir.
1988) (en banc)).
case, Plaintiffs have failed to raise serious questions going
to the merits. As previously explained, Plaintiffs'
purported rescission of the loan was untimely and is barred
by the subsequent loan modification agreement. (Docs. 20 at
5-7, 29 at 3-4.) The Court cannot conclude that Plaintiffs
have a fair chance of success on appeal in this regard.
Plaintiffs have not demonstrated serious questions concerning
the denial of leave to amend. The Court denied leave to file
a second amended complaint for a host of independent reasons:
violations of Rule 8, futility, bad faith, undue delay, and
the prior opportunity to amend. (Doc. 29 at 2-9.) Plaintiffs
simply do not have a fair chance on appeal of showing that
the Court abused its discretion and that justice requires
leave to amend in this case. The Court therefore declines to
grant an injunction of the trustee's sale. See RCC
South LLC, 2011 WL 6019279 at *3 (denying stay and
request to enjoin trustee's sale pending appeal where the
plaintiff failed to make the showing required for a