La Paz Investments v. U.S. Bank
Defendant and appellant U.S. Bank National Association (U.S. Bank) appeals from an order granting a preliminary injunction (Code Civ. Proc., § 904.1, subd. (a)(6)) against U.S. Bank’s foreclosure on deeds of trust securing about $40 million in construction loans made by a predecessor bank, PFF Loan & Trust (PFF), and assumed by U.S. Bank. Plaintiffs and respondents, La Paz Investments (La Paz) and the Maurer Development Co. Money Purchase Pension Plan (the Maurer Plan), are junior lienholders who contend U.S. Bank adversely modified their subordination agreements, causing U.S. Bank to lose its senior priority.
In an action for declaratory relief, La Paz and the Maurer Plan (collectively Maurer) seek permanently to enjoin U.S. Bank from foreclosing on real property in Riverside County and for a declaration that U.S. Bank’s senior deeds of trust on the properties should not maintain priority over Maurer’s junior deeds. In a separate action, U.S. Bank seeks to quiet title and declaratory relief.
After a thorough review of the record, we do not find any material modifications to the subordination agreements which increased the risk of default by Osborne Development Corporation (Osborne), the obligor under U.S. Bank’s construction loans. Based on the record before us, U.S. Bank is entitled to maintain its senior priority over any subordinated junior lienors. Because respondents have not established the likelihood of success in prevailing in the underlying proceedings, the trial court abused its discretion in granting the motion for preliminary injunction. We reverse and remand.
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