Order – Show Cause – Preliminary Injunction
Plaintiff’s motion for a preliminary injunction is granted.
Defendants’ unopposed request for judicial notice is granted.
Background
Plaintiff Elizabeth Frohlich seeks to enjoin a foreclosure sale of her property located at 328 Knight Dr., San Rafael. Her complaint filed on April 2, 2026 names Robertson, Anschutz, Schneid & Crane, LLC (“RASC”), the current Trustee for the Deed of Trust on Plaintiff’s mortgage and foreclosure counsel, Select Portfolio Servicing, Inc. (“SPS”), the current servicer for Plaintiff’s mortgage, and The Bank of New York Mellon Trust Company, N.A. (“the Trust”), which currently owns Plaintiff’s mortgage. It includes the following causes of action: (1) fraud; (2) wrongful foreclosure; (3) violation of the Homeowners’ Bill of Rights (HBOR); (4) violation of Business and Professions Code section 17200 et seq.; (5) negligence; (6) intentional infliction of emotional distress; and (7) declaratory relief. SPS and the Trust oppose Plaintiff’s motion for preliminary injunction.
Legal Standard
“’When ruling on a motion for preliminary injunction, “trial courts should evaluate two interrelated factors when deciding whether or not to issue a preliminary injunction. The first is the likelihood that the plaintiff will prevail on the merits at trial. The second is the interim harm that the plaintiff is likely to sustain if the injunction were denied as compared to the harm that the defendant is likely to suffer if the preliminary injunction were issued.”’” (Anderson v. County of Santa Barbara (2023) 94 Cal.App.5th 554, 567-568, citations omitted.) “The trial court determination must be guided by a ‘mix’ of the potential-merit and interim-harm factors; the
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greater the plaintiff’s showing on one, the less must be shown on the other to support an injunction. Of course, ‘the scope of available preliminary relief is necessarily limited by the scope of the relief likely to be obtained at trial on the merits.’ A trial court may not grant a preliminary injunction, regardless of the balance of interim harm, unless there is some possibility that the plaintiff would ultimately prevail on the merits of the claim. ..” (Butt v. State of California (1992) 4 Cal.4th 668, 678
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Balance of Harms
The Court finds that the balance of harms weighs heavily in favor of Plaintiff. If the sale proceeds, she will lose her and her children’s home of almost 20 years. (Frohlich decl. ¶17.) The Court does not find compelling Defendants’ arguments as to why the balance weighs in their favor. For example, Defendants argue that there is a risk of waste. Given that Plaintiff wants to keep her home, there seems to be no risk of waste.
Probability of Success
The Court finds that Plaintiff has shown a possibility that she will prevail on her claim that Defendants violated Civil Code section 2923.6 and her cause of action for declaratory relief. Because of the Court’s conclusion as to these two matters, the Court need not address Plaintiff’s additional claims/causes of action.
Section 2923.6: This section prohibits “dual tracking.” In her supporting declaration Plaintiff states:
10. Beginning on September 15, 2025, and continuing through February 12, 2026, I submitted detailed requests to SPS for a loan modification, including a sworn Declaration and extensive supporting documentation. SPS confirmed that my application was complete and under review, and changed my account status from “foreclosure” to “dispute.”
11. On or about March 21, 2026, I received a letter from SPS denying my modification request. The letter did not specify an appeal period as required by law. Under Civil Code section 2923.6, I have at least thirty days to appeal, making my appeal deadline approximately April 20, 2026.
Plaintiff alleges that she submitted a request to SPS for a discretionary deferral of her past-due payments. In opposition, Defendants argue that “[a]n informal letter requesting a discretionary accommodation based on a servicing complaint does not constitute a ‘complete first lien loan modification application’ within the meaning of the statute.” Further, their declarant states:
According to SPS’s loan records, there is no record of Borrower submitting a Request for Mortgage Assistance in September 2025 or March 2026. There was no loss mitigation application pending review in November 2025 when the NOD was recorded or in February 2026 when the NOS was recorded.
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(Pittman decl. ¶28.)
The evidence shows as follows: On September 15, 2025, Plaintiff sent a letter to SPS’s Consumer Ombudsman Department asking for a deferral of the 15 past due monthly payments she had been unable to make. She stated that, as a result of Mr. Salama’s death on May 5, 2025 with no assets, she would never be able to recover the $120,000 he owed her for child support. (Ex. 18 to Pittman decl. at p. 312.) After outlining her claims, she asked SPS to “[m]odify” her mortgage loan to defer any past due payments to the end of the loan. (Id. at p. 319.)
On November 13 she again wrote to the Consumer Ombudsman Department. She requested that SPS defer the overdue payments on her loan and reinstate her mortgage in good standing. (Id. at p. 320.) On December 4, SPS sent Plaintiff a letter regarding “the inquiry on November 13, 2025.” The letter stated that SPS had “completed a full review of the inquiry and the account.” With respect to loss mitigation, SPS wrote:
In the inquiry, you requested assistance with a Deferral. Unfortunately, SPS was unable to offer you a Deferral because based on the delinquency on your account, and because under the Servicing Agreement governing this account, the requested assistance option was not available, and we were unable to approve your request. SPS is required to service its accounts according to the requirements of the Noteholder, which may include limitations on modification characteristics.
(Ex. 17 to Pittman decl. at p. 206.) On February 12, 2026, Plaintiff submitted to the Customer Advocacy and Legal Departments of SPS a:
1) Requested Affidavit of Fact in Support of Fraud / Wrongful Foreclosure Claims...;
2) Urgent Request for Withdrawal of Notice of Default filed November 7, 2025 and Notice of Trustee’s Sale to Remedy Illegal “Dual Tracking” under California Law; and
3) My Complaint Against SPS and the Investor for Fraud and Wrongful Foreclosure and demand for Modification or Payment to Resolve Claims
In the opening paragraph, Plaintiff wrote:
Please consider the following in connection with my pending requests for a loan modification or a settlement payment to resolve my fraud, wrongful foreclosure, and other claims against SPS and the Investor for my mortgage loan.
With respect to the Affidavit of Fact, Plaintiff stated that SPS had requested it in a January 14, 2026 letter and that she had previously provided it to SPS on September 15, 2025. (Ex. 18 to Pittman decl. at p. 281.) On March 11, 2026, SPS sent Plaintiff a letter regarding “the
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inquiry on February 17, 2026” and stated that it had “completed a full review of the inquiry and the account.” With respect to foreclosure and dual tracking SPS stated that he believed it had “acted according to applicable guidelines.” It declined her request for compensation. (Ex. 17 to Pittman decl. at p. 204.)
The evidence is sufficient to show that there is some possibility that Plaintiff will prevail on this claim. Plaintiff was requesting a loan modification in the form of a deferral of payments to the end of the loan. According to the correspondence discussed above, SPS requested a document (the Affidavit of Fact) on January 14 and Plaintiff provided it on February 12. Although a copy of a “Request for Mortgage Assistance (RMA”) form is included as part of exhibit 9 (at p. 64, et seq.), Defendants offer no evidence and cite no authority showing that this form MUST be used in order for a request to constitute an “application for a first lien loan modification” under section 2923.6.
Defendants go on to argue that even if Plaintiff submitted a complete application for a loan modification, she is precluded from pursuing her dual tracking claim pursuant to subdivision (g) of section 2923.6. Defendants’ evidence shows that Plaintiff first defaulted when her June 1, 2024 payment was due. (Pittman decl. ¶11 and ex. 5.) Plaintiff submitted a Request for Mortgage Assistance in June 2024 which was determined to be complete in September 2024. (Id. ¶¶16-18 and exs. 9-11.) On September 25, 2024, SPS sent a letter to Plaintiff advising her that she was not approved for any home retention loss mitigation measures. (Id. ¶19 and ex. 12.)
Plaintiff submitted another Request for Mortgage Assistance in January 2025 which was determined to be complete in April 2025. (Id. ¶¶20-22 and exs. 13-15.) On April 28, 2025, SPS sent a letter to Plaintiff advising her that she was not approved for any home retention loss mitigation measures. (Id. ¶23 and ex. 16.) The problem with Defendants’ argument here is that SPS did evaluate Plaintiff’s request. As shown above, in its December 4 and March 11 correspondence, SPS stated it had “completed a full review of the inquiry and the account.”
Additionally, Plaintiff’s evidence shows that her later request for payment deferral was based upon the fact that she was unable to recover the $120,000 Mr. Salama owed her when he died on May 5, 2025. This occurred after both of the earlier requests.
Declaratory Relief: In Monterey Coastkeeper v. Central Coast Regional Water Quality Control Board (2022) 76 Cal.App.5th 1, 13, the Court of Appeal wrote as follows:
Declaratory relief is available to a party “who desires a declaration of his or her rights or duties with respect to another...” A complaint for declaratory relief is legally sufficient if it sets forth facts showing the existence of an actual controversy relating to the legal rights and duties of the parties and requests that the rights and duties of the parties be adjudged by the court. If these requirements are met and no basis for declining declaratory relief appears, the court should declare the rights of the parties whether or not the facts alleged establish the plaintiff is entitled to favorable declaration. “Declaratory relief operates prospectively, serving to set controversies at rest before obligations are repudiated, rights are invaded or wrongs are committed. Thus the remedy is to be used to advance preventative justice, to declare rather than execute rights.” In
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essence, declaratory relief operates to declare future rights, not to address past wrongs.
A party seeking declaratory relief must show a very significant possibility of future harm. In assessing whether declaratory relief is available, a court determines whether “a probable future dispute over legal rights between parties is sufficiently ripe to represent an ‘actual controversy’ within the meaning of the statute authorizing declaratory relief, as opposed to purely hypothetical concerns...” “An ‘actual controversy’ under the declaratory relief statute is ‘one which admits of definitive and conclusive relief by judgment within the field of judicial administration, as distinguished from an advisory opinion upon a particular or hypothetical state of facts.’”
(Citations and brackets omitted.)
Defendants’ first argument as to why Plaintiff cannot prevail is based upon the fact that declaratory relief is a remedy. They contend that “[b]ecause Plaintiff cannot demonstrate a likelihood of prevailing on the rest of her claims, her request for declaratory relief fails as well.” This argument lacks merit. While declaratory relief is in fact a remedy, as shown above it “’operates prospectively, serving to set controversies at rest before obligations are repudiated, rights are invaded or wrongs are committed.’” Therefore Plaintiff does not need to have any underlying cause of action to support her request.
Defendants go on to argue:
...[E]ven if the PSA grants SPS discretionary authority to modify loans, that discretion belongs to SPS – it does not create a right in Plaintiff to compel a modification. SPS evaluated Plaintiff for loan modifications on multiple occasions, exercised its discretion, and determined that Plaintiff did not qualify.
Defendants are correct that Plaintiff cannot compel SPS to exercise its discretion in any particular manner. However, if Plaintiff succeeds in showing that SPS does in fact have discretion to defer her payments, then SPS would need to reevaluate Plaintiff’s request since the Court would have determined that it was wrong when it took the position that it could not defer her payments. While SPS might not ultimately exercise its discretion the way she wants, she should have the opportunity to get to that point.
Undertaking
“On granting an injunction, the court or judge must require an undertaking on the part of the applicant to the effect that the applicant will pay to the party enjoined any damages, not exceeding an amount to be specified, the party may sustain by reason of the injunction. ...” (Code Civ. Proc., § 529, subd. (a).) Defendants ask for a $942,998.45 bond on the ground that this is the amount Plaintiff owes. This is not the amount of damage Defendants may sustain by virtue of the injunction. The Court orders Plaintiff to post an undertaking in the amount of $5,000.
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All parties must comply with Marin County Superior Court Local Rules, Rule 2.10(B) to contest the tentative decision. Parties who request oral argument are required to appear in person or remotely by ZOOM. Regardless of whether a party requests oral argument in accordance with Rule 2.10(B), the prevailing party shall prepare an order consistent with the announced ruling as required by Marin County Superior Court Local Rules, Rule 2.11.
The Zoom appearance information for July, 2026 is as follows: https://marin-courts-ca-gov.zoomgov.com/j/1615487764?pwd=Ob4B5J7LLKcpnkxzJjjEOSHNzEGafG.1
Meeting ID: 161 548 7764 Passcode: 502070 If you are unable to join by video, you may join by telephone by calling (669) 254-5252 and using the above-provided passcode. Zoom appearance information may also be found on the Court’s website: https://www.marin.courts.ca.gov