Fleck v. CitiMortgage, 1:15-cv-00167

Background

Plaintiffs Scott and Kiendra Fleck sued CitiMortgage seeking declaratory relief, breach of the covenant of good faith and fair dealing, and violation of a consumer protection statute, arising from foreclosure proceedings on their Lahaina, Hawaii home.
Plaintiffs filed an Ex Parte Application for a Temporary Restraining Order (TRO) and preliminary injunction to stop a foreclosure sale scheduled May 11, 2015.
The TRO was filed without a verified complaint, affidavit, or any evidentiary support and without a written certification of efforts to notify Defendant.
Plaintiffs alleged ongoing loan-modification negotiations and asserted that CitiMortgage refused to stop foreclosure activity despite such negotiations.
The court evaluated the TRO under Rule 65(b) and the Winter preliminary-injunction standard and found Plaintiffs’ submissions conclusory and legally deficient.
The court denied the Ex Parte TRO and preliminary injunction request, noting prior related litigation in which CitiMortgage obtained summary judgment against Plaintiffs.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether court may issue ex parte TRO without notice	Fleck: urgent sale will cause irreparable harm; notice should be excused because CitiMortgage refuses to stop foreclosure	CitiMortgage: (implicit) Rule 65 requires affidavit/verification and written certification of notice efforts; no such proof was provided	Denied — Plaintiffs failed Rule 65(b) requirements (no affidavit/verification or certification of notice efforts)
Whether Plaintiffs showed likelihood of success on the merits	Fleck: claims arise from alleged misrepresentations and wrongful pursuit of foreclosure during loan-modification process, including HAMP violation	CitiMortgage: (implicit) HAMP creates no private right of action; prior related judgment undermines merits	Denied — Plaintiffs’ pleadings/conclusions insufficient; HAMP claim unlikely to succeed (no private cause of action)
Whether Plaintiffs showed irreparable harm warranting injunctive relief	Fleck: real property is unique; sale would cause irreparable harm and chaos	CitiMortgage: (implicit) sale of property and inconvenience to buyers are ordinary foreclosure consequences and do not meet irreparable-harm standard	Denied — asserted harms are speculative/ordinary foreclosure consequences, not irreparable under Winter
Whether Plaintiffs stated viable state-law claims (bad faith, consumer protection)	Fleck: breach of covenant/bad faith and violation of Hawaii consumer-protection law	CitiMortgage: (implicit) tort of bad faith limited to insurer-insured context; plaintiffs misidentify consumer statute; claims legally deficient	Denied — bad-faith claim not recognized for mortgage/modification context; Count alleging a non-existent "Hawaii Consumer Protection Act" is deficient

Key Cases Cited

Reno Air Racing Ass’n. v. McCord, 452 F.3d 1126 (9th Cir. 2006) (ex parte TROs are permissible only in extremely limited circumstances)
Winter v. Natural Res. Def. Council, 555 U.S. 7 (2008) (four-part preliminary injunction standard)
Alliance for Wild Rockies v. Cottrell, 632 F.3d 1127 (9th Cir. 2011) (serious questions test in conjunction with balance of hardships)
Brown Jordan Int’l, Inc. v. Mind’s Eye Interiors, Inc., 236 F. Supp. 2d 1152 (D. Haw. 2002) (TRO standard identical to preliminary injunction standard)
Dias v. Fed. Nat’l Mortg. Ass’n, 990 F. Supp. 2d 1042 (D. Haw. 2013) (no private right of action under HAMP)
Miller v. Chase Home Fin., 677 F.3d 1113 (11th Cir. 2012) (no implied private right under HAMP)
Corvello v. Wells Fargo Bank, N.A., 728 F.3d 878 (9th Cir. 2013) (breach of HAMP Trial Payment Plan may state contract claim where TPP exists)
Best Place v. Penn Am. Ins. Co., 82 Haw. 120, 920 P.2d 334 (Haw. 1996) (tort of bad faith recognized in insurance context)
Jou v. Nat’l Interstate Ins. Co. of Haw., 114 Haw. 122, 157 P.3d 561 (Haw. App. 2007) (bad-faith tort requires insurer-insured contractual relationship)