308 F. Supp. 3d 260
D.C. Cir.2018Background
- Plaintiff and his daughter Evelina Lekser bought 2150 Florida Ave NW in 2008 as joint tenants; plaintiff executed a limited 2008 power of attorney permitting Lekser to sign loan documents because he was abroad.
- In 2015 Lekser allegedly procured an $800,000 refinance using a purported April 2015 power of attorney that plaintiff denies executing; about half of the loan paid off the Bank of America mortgage and the rest was allegedly misappropriated.
- Plaintiff sued Lekser in a related action (Shvartser I); the court earlier allowed plaintiff access to the property and authorized sale proceeds to be deposited with the Clerk pending litigation, but the property had not been sold.
- Lender defendants notified plaintiff of an imminent foreclosure (scheduled March 1, 2018); plaintiff filed this suit and obtained a TRO, then moved for a preliminary injunction to block the foreclosure sale.
- The central disputed legal question is whether the 2015 power of attorney was forged; if so, the deed of trust is void and foreclosure would extinguish plaintiff’s interest. The court found the record showed indicia of forgery and lack of lender proof of plaintiff’s knowledge.
- The court granted a preliminary injunction, finding likelihood of success on the quiet title claim, irreparable harm absent an injunction, that equities favored plaintiff, and that the public interest slightly favored maintaining the injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of 2015 power of attorney / quiet title | 2015 POA is forged; deed of trust void; plaintiff never executed it | POA made Lekser agent; deed may be voidable not void; equitable subrogation or Lekser’s co-ownership could validate lien | Court: record shows substantial likelihood POA forged; plaintiff likely to prevail on quiet title; deed of trust likely void |
| Irreparable harm from foreclosure | Foreclosure would irrevocably extinguish plaintiff’s unique property interest — irreparable injury | Delay harms lenders financially; any harm is compensable by accruing interest | Court: loss of property is irreparable and imminent; factor favors injunction |
| Balance of equities | Delay preserves plaintiff’s ability to prove fraud; lenders will accrue interest — limited, compensable harm | Lenders will wait longer for repayment; foreclosure mediation/certificates may expire | Court: equities tip to plaintiff; lenders’ injury speculative/financial and not irreparable |
| Public interest | Public interest in preventing deprivation of property by alleged fraud; enabling plaintiff to prove fraud | Public interest in returning property to productive use via foreclosure | Court: public interest slightly favors plaintiff (preventing fraud), not dispositive but supports injunction |
Key Cases Cited
- Mazurek v. Armstrong, 520 U.S. 968 (extraordinary remedy; movant must clearly carry burden)
- Winter v. Natural Resources Defense Council, 555 U.S. 7 (preliminary injunction standard; public-interest consideration)
- League of Women Voters of U.S. v. Newby, 838 F.3d 1 (D.C. Cir.) (four-factor test for injunction)
- Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290 (D.C. Cir.) (irreparable harm requirement)
- Smith v. Wells Fargo Bank, 991 A.2d 20 (D.C. 2010) (deed of trust void if power of attorney forged)
- In re Stevenson, 789 F.3d 197 (D.C. Cir.) (equitable subrogation places party in position of earlier mortgagee)
- Patriot-BSP City Ctr. II v. U.S. Bank Nat. Ass'n, 715 F. Supp. 2d 91 (D.D.C.) (foreclosure sale can be irreparable injury)