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73 » VISIT US ONLINE @ DSNEWS.COM evidence to oppose the borrowers' claim) that the lender had engaged in "dual tracking" by recording a notice of trustee's sale while engaged in the loan modification process (prohibited by Civil Code §2924.6(c)) and granted the preliminary injunction. ereafter, Petitioners filed a motion for attorney fees and costs, which the superior court denied, reasoning that the language of the applicable statute was consistent with the award of attorney fees at the conclusion of the action. e Court of Appeal reversed and conclud- ed that a borrower who obtains a preliminary injunction under Section 2924.12 is a prevailing borrower within the meaning of the statute. In short, trial courts may award attorney fees upon issuance of injunctive relief, which includes the issuance of a preliminary injunction, as well as a permanent injunction. e Monterossa court opined that the statute refers to "injunc- tive relief," which plainly incorporates both preliminary and permanent injunctive relief. However, Monterossa did not address the issue of whether the statute also provided for such an award where the borrower obtains a TRO, but no preliminary injunction. Although there are similarities between a TRO and a preliminary injunction, a TRO does not fall within the "injunctive relief " set forth in the statute which would entitle a prevailing borrower to attorney fees. A TRO is an injunction in the sense that it enjoins a particular act pending a hearing on preliminary injunction. Chico Feminist Women's Health Center v. Scully, (1989) 208 Cal.App.3d 230, 237, fn. 1. However, it is distin- guishable in the following ways: » A TRO may be issued "ex parte" and notice may be dispensed as its purpose is to pre- serve the status quo; » In contrast to the ex parte TRO proceeding, a hearing on the preliminary injunction is a full evidentiary hearing giving all parties the opportunity to present arguments and evidence. Civ. Proc. Code (CCP) § 527; » A bond is not essential for a TRO unlike a preliminary injunction which is not effective until the undertaking is filed. CCP § 529; » e TRO is transitory in nature and ter- minates automatically when a preliminary injunction is issued or denied. Landmark Holding Group v. Superior Court, (1987) 193 Cal.App.3d 525, 529. e differences between the TRO and a preliminary injunction demonstrate that a bor- rower who obtains only a TRO rather than a preliminary injunction or permanent injunction, has not obtained "injunctive relief " and has not "prevailed" under Civil Code § 2924(i) as interpreted by Monterossa. Granting of a TRO does not reflect on the merits of the underly- ing dispute, and does not qualify the enjoining party to "prevailing party" status. omas v. Quintero, (2005) 126 Cal.App.4th 635, 652, 664, fn. 21. In the context of what Monterossa recog- nizes as a unique statutory scheme of HOBR, the best a plaintiff can hope for is a preliminary injunction. HOBR provides an opportunity for a servicer, mortgagee, trustee, beneficiary or authorized agent to correct and remedy a HOBR violation, which gives rise to the action of injunctive relief, and then move to dissolve the preliminary injunction pursuant to Section 2924.12(i). is compliance with HOBR could potentially moot the borrower's request for a permanent injunction. Given that the borrower has effectively prevailed in the action by obtain- ing a preliminary injunction forcing compliance with the statute, the Legislature must have intended to authorize attorney fees and costs pursuant to Section 2924.12(i). Monterossa, supra, at 754. However, that same rationale is not present in connection with a TRO that can be issued on an ex parte basis, without a bond, where the arguments have not been fully presented, where a defendant may not have appeared in the action yet, and which was only intended to last pending the hearing on the pre- liminary injunction. A borrower might obtain a TRO for a short period of time and then fail to obtain a preliminary injunction because of the failure to demonstrate a likelihood of success on the merits with respect to an alleged HOBR violation. A borrower in that situation cannot be deemed a "prevailing borrower" because they would not have obtained a preliminary injunc- tion forcing compliance with the statute as set forth in Monterossa. In sum, if attorney's fees are allowable for the mere issuance of a TRO in a HOBR matter, then plaintiffs in these types of cases would receive an absolute windfall at the outset of the matter (1) with little to no evidentiary proof of a HOBR violation; (2) without an objection by defendants who have not yet retained counsel, or who are unable to prepare an opposition and/ or attend the TRO due to the short notice of the hearing; and (3) without allowing defen- dants an opportunity to remedy the alleged violation as contemplated by HOBR. Not only would this be unfair, but it also was not what the Legislature intended. Final thoughts and recommendations: While Monterossa held that attorneys' fees are available to borrowers who obtain a preliminary injunction, it does not necessarily mean that every borrower receiving a prelimi- nary injunction will also get a fee award. ere are several additional considerations to keep in mind. First, was the injunction granted based on a HOBR claim? Most California cases involve a hybrid of HOBR and non-HOBR claims. It is important for defense counsel to clarify under which theory the court is granting the injunction. We recommend raising this in the opposition to the OSC re: Preliminary Injunction or at the injunction hearing, rather than after the court has granted the injunction. Second, it is key to clarify whether the injunc- tion is conditioned upon the posting of a bond. If so, and the borrower fails to timely post the bond, one could argue that the preliminary injunction never took effect and, therefore, the borrower is not the prevailing party under Sec- tion 2924.12(i). Lastly, the requested attorneys' fees must be "reasonable." At most, a prevail- ing borrower would only be entitled to fees incurred in obtaining that relief. We have seen many borrowers seek excessive litigation and pre-litigation fees in obtaining an injunction. Arguing that the fees must be "reasonable" can help limit the fee recovery. Is the granting of a temporary restraining order ("TRO") considered injunctive relief for purposes of obtaining attorney fees under HOBR? No.

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