STATE OF MINNESOTA COUNTY OF HENNEPIN Theresa N. Yzaguirre, Plaintiff, Vs.

FOURTH JUDICIAL DISTRICT DISTRICT COURT Case Type: 14 Other Civil Foreclosure

PLAINTIFF'S MEMORANDUM OF LAW IN SUPPORT OF A TEMPORARY INJUNCTION

Margaret Mary Yzaguirre, Defendant. Court File No.:

Plaintiff requests that the Court find that an Ex Parte Temporary Injunction is proper and necessary to enjoin a mortgage foreclosure sale scheduled for April 10, 2013 at 10AM. STATEMENT OF FACTS The Statement of Facts are fully contained within the Plaintiffs Affidavit provided with this Memorandum as well as the Plaintiffs Complaint being concurrently submitted to the Court. DISCUSSION "A temporary injunction is an extraordinary equitable remedy." Miller v. Foley, 317 N.W.2d 710, 712 (Minn. 1982). It is meant to preserve the status quo pending an adjudication on the merits. id. In determining whether to grant a temporary injunction, the trial court may consider affidavits, depositions, or testimony. Minn. R., Civ. P. 65.02(b). Also, the trial court must apply the five factors enumerated in Dahlberg Bros., Inc. v. Ford Motor Co., 137 N.W.2d 314, 321-322 (Minn. 1965) which are: (1) The nature and background of the relationship between the parties preexisting the dispute giving rise to the request for relief. (2) The harm to be suffered by plaintiff if the temporary restraint is denied as

compared to that inflicted on defendant if the injunction issues pending trial. (3) The likelihood that one party or the other will prevail on the merits when the fact situation is viewed in the light of established precedents fixing the limits of equitable relief. (4) The aspects of the fact situation, if any, which permit or require consideration of public policy expressed in the statutes, State and Federal. (5) The administrative burdens involved in judicial supervision and enforcement of the temporary decree. PARTIES' PRIOR RELATIONSHIP Plaintiff is attempting to preserve the status quo between herself and the Defendant until the trial is held on the merits of Plaintiffs claims in her Complaint. In Metro. Sports Facilities Commn. v. Minn. Twins Partn., the Court, in affirming the temporary injunction, discussed favorably how "granting the motion for a temporary injunction would not create a new legal relationship between the parties, but would maintain the existing relationship." 638 N.W.2d 214, 221 (Minn. App. 2002). In another case, the court ruled that when an employee signed a non-compete employment contract, and benefitted from the employment, a temporary injunction preventing the employee from working for a competitor employer did not alter the parties' prior relationship. Medtronic. Inc. v. Advanced Biomedics Corp, 630 N.W.2d 438, 450 (Minn. App. 2001). In our case, prior to a temporary injunction being ordered, the Plaintiff is a pretended Mortgagor and the Defendant is a pretended Mortgagee. By pretended we mean that there is not a traditional mortgagor/mortgagee relationship. Specifically, the Plaintiff received no money from the Defendant when entering into the agreement and the

Plaintiff has no monthly mortgage payment obligation to the Defendant. After a temporary injunction is issued, the financial relationship between the Plaintiff and the Defendant shall remain as it has been for over 9 years. The temporary injunction will have absolutely no effect on the business relationship of the parties. Contrast this with Upper Midwest Sales Co., v. Ecolab. Inc., where the plaintiffs had been distributors for the defendants. 577 N.W.2d 236, 239 (Minn App. 1998). In this case, the distributor agreements between the parties ended on December 31, 1995 and an evidentiary hearing took place almost three months later. Id. When the injunction was granted by the trial court, it placed the parties back into the distributor relationship that had been previously dissolved by contract. Id. As the Court evaluated the relationship of the parties, it found the injunction altered the relationship in existence at the time of the injunction. Consequently, the injunction did not maintain the status quo of the parties. Id. at 244. With the present case, the granting of an injunction will maintain the status quo of the parties. Here the first Dahlberg factor clearly favors the injunction. BALANCING HARMS The Court must balance the harm to the Defendant verse the harm to the Plaintiff if the temporary injunction is granted. We believe this balancing test favors granting Plaintiffs request for the temporary injunction. The trial court should determine that there are no other alternative legal remedies available and that to prevent irreparable harm, the injunction is necessary. Cherne Indus. Inc. v. Grounds & Assocs.. Inc., 278 N.W.2d 81, 92 (Minn. 1979). In the instant case, the Defendant is not harmed by the granting of the temporary injunction . The Defendant is not awaiting repayment of money she personally loaned to the Plaintiff to purchase the Property. The Defendant has expended none of her own personal

money in the payment of delinquent property taxes but has used money believed to belong to the Estate of Donna Yzaguirre. The brothers who have unwittingly been duped out of their 50% interest in the property, by the Defendant, have not been receiving any financial benefit from the mortgage nor are they entitled to any financial distribution as the transaction remains today. A. The Injunction is necessary - no other adequate legal remedy is available.

There are no other legal remedies available to the Plaintiff. Quite simply, there is no other way she can retain the property, and her rightful inherited share in the property, short of enjoining the foreclosure sale. If the Plaintiff were to pay off the Mortgage and Note as it is currently written, the Defendant would be unjustly enriched by receiving $150,000 from the Plaintiff when the Plaintiff never had an actual debt to the Defendant. Additionally, if the foreclosure were to proceed and the Plaintiffs 25% interest in the Property which she inherited along with the 50% interest of her brothers (which was wrongfully acquired by Defendant) would be extinguished without recourse. With the Plaintiff having no other viable legal remedy available to maintain the status quo until the underlying issues are resolved, the second Dahlberg factor favors granting the Plaintiffs request for a temporary injunction. B. The injunction is necessary to prevent irreparable harm. It has long been established that real property is unique. Schumacher v. Ihrke, 469 N.W.2d 329, 335 (Minn. App. 1991). And, hence, irreparable harm will be suffered if a temporary injunction does not preserve possession of real property. Bellows v. Ericson, 46 N.W.2d 654, 659-60 (Minn.1951). Plaintiffs property is likewise unique as is her 25% inherited interest in the property. Since 2004, the Plaintiff has made numerous improvements as outlined in her

affidavit. The Property is her home. Outside of an injunction being granted, the Plaintiffs only other remedy for wrongful foreclosure would be money damages which are inadequate where real property is involved. Strangis v. Metropolitan Bank, 385 N.W.2d 47, 48 (Minn App. 1986). Should this mortgage foreclosure sale proceed, the Plaintiff will be put out of the home she has lived in for over 24 years simply because the Defendant has decided that she wants the property all to herself and at her disposal. The second Dahlberg factor favors granting the Plaintiffs request for a temporary injunction. The Defendant has held this Mortgage since March 13, 2004. It is difficult to assign much harm to the continued holding of the Mortgage for a few additional months. The Plaintiff, on the other hand, will suffer much harm. The Plaintiff has no other legal remedy and the Plaintiff will suffer irreparable harm. LIKELIHOOD THE PLAINTIFF WILL PREVAIL UPON THE MERITS As the underlying case comes to fruition, the Plaintiff will show that the Mortgage was not drafted as was intended by the heirs of the Donna Yzaguirre Estate. The agreement was intended to act as a security document which was to allow the Plaintiff to live on the Property while securing the future distribution of equity to the heirs of Donna Yzaguirre. Plaintiffs

brothers will testify that they received no benefit for quit claiming their interest over to the Defendant, that Defendant assured them that they would be receiving their share when the house eventually was sold in the future and that they have no document that binds the Defendant to distribute any money to them. Here the Plaintiff was led to believe by the Defendant that the Mortgage and Note was just a formality of the probate to document her right to live there and the future distribution of the equity to all four of the Yzaguirre siblings when the Plaintiff, at her discretion, moved from

the homestead and placed the property up for sale. At the time of the transaction, the Plaintiff did not have an attorney and was under the misapprehension that the attorney assisting the Defendant during the probate of Donna Yzaguirres estate was the attorney for the heirs. Moreover, the Plaintiff relied on Defendant's representations made in the Defendants fiduciary position as personal representative. It was not discovered by the Plaintiff until this pretended foreclosure proceeding that the entire interest of the property went to the Defendant and that Plaintiff was not even entitled to her own 25% interest let alone that the Yzaguirre brothers were stripped of their interest as well. In Upper Midwest Sales Co., v. Ecolab. Inc.. the Court concluded that the district court doubted that the plaintiffs would prevail on the merits of the underlying case although the district court went on to acknowledge that significant issues remained. 577 N.W.2d 236, 241 (Minn. App. 1998). Further the Court added, when there is a close factual dispute, the district court should be reticent-to grant the injunction. Id. The Court finally concluded that for the Upper Midwest Sales Co. plaintiffs to succeed on the merits they needed to be protected by the Minnesota Franchise Act and plaintiffs did not qualify for that protection. Id. at 243. With the present case there is no controlling statutes such as a franchise act. And with contracts made under duress, there can be little doubt regarding the validity of those contracts. Unlike Upper Midwest Sales Co., it is more likely than not, when the underlying case here is heard, a finding will be made indicating that the Plaintiff was mislead in signing the Mortgage and Note, that the Mortgage and Note serve to strip her of her 25% equity interest in the Property and that the Defendants own letter, dated August 2012, provides support to the Plaintiffs contention that the terms of Mortgage and Note be set aside and a declaratory judgment is necessary to determine the rights, interests and obligations of the parties to the

Property. This third Dahlberg factor weighs in favor of the Plaintiff. CONSIDERATION OF PUBLIC POLICY There are no statutes, State or Federal which apply to these facts. Accordingly, there are no public policy considerations as defined in Dahlberg. 137 N.W.2d 314, 321-22. Therefore, this fourth Dahlberg factor weighs in neither the Plaintiffs or Defendants favor.

ADMINISTRATIVE BURDENS INVOLVED IN JUDICIAL SUPERVISION AND ENFORCEMENT OF TEMPORARY INJUNCTION Here there are no administrative burdens. The temporary injunction will simply stop the foreclosure sale scheduled for April 10, 2013 and nothing further is required of the district court other than issuing an order to that effect. All other matters of the underlying case will be resolved through mediation or trial. This fifth Dahlberg factor weighs in Plaintiffs favor and the temporary injunction should be granted. CONCLUSION In sum, the Dahlberg factors, when considered in totality weigh in favor of the granting of the temporary injunction for the Plaintiff. The injunction should be granted.

Dated April 2, 2013 Diana Longrie (#259305) Attorney at Law 1321 Frost Avenue E. Maplewood, MN 55109 Phone: 6512140859 Fax: 6517936864 Email: longrie@hotmail.com