Valifornia, Inc. v. U.S. Bank, NA

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
Valifornia, Inc.,
Plaintiff,
v.
U.S. Bank, N.A.,
Defendant.
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Civil Action H-26-2890
ORDER DENYING PLAINTIFF’S
APPLICATION FOR INJUNCTIVE RELIEF
Pending 	before 	the 	court 	is 	Plaintiff’s 	Application 	for
Injunctive 	Relief. 	ECF No. 19. 	The 	court 	has 	considered 	the
motion, the responses, and the applicable law. The court has also
considered the parties’ oral arguments made during the July 6,
2026 hearing on the Application. For the reasons stated below,
Plaintiff’s 	Application 	for 	Injunctive 	Relief, 	ECF No. 19, 	is
DENIED.
1. Background
On 	June 	26, 	2026, 	Plaintiff 	Valifornia, 	Inc. 	filed 	an
Application for Injunctive Relief. ECF No. 19. Valifornia seeks to
halt the foreclosure sale of 818 Kings Forest Lane, Richmond,
Texas 77469 (Property), which is set to occur on July 7, 2026. Id.
¶ 8. It alleges that Defendant U.S. Bank, N.A. (U.S. Bank) failed
to provide it with a copy of the Notice of Trustee’s Sale, in violation
of Rule 736 of the Texas Rules of Civil Procedure. Id. ¶ 15.
The Property was purchased from Wells Fargo Bank, N.A.
by Carol E. Reed and Isaiah Reed in 2006. ECF No. 19 ¶ 8. Later
that year, the Reeds refinanced their debt on the Property via a
home equity loan, with Encore Credit Corp. as the lender. Id. ¶ 9.
The home equity loan was secured by a Texas Home Equity
United States District Court
Southern District of Texas
ENTERED
July 06, 2026
Nathan Ochsner, Clerk
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Adjustable Rate Note (Note) and a Texas Home Equity Security
Instrument (Security Instrument). Id. Subsequently, the Note and
Security Instrument were transferred to Defendant U.S. Bank,
N.A., which, at present, continues to hold the home equity loan.
Id. ¶ 10.
The Reeds transferred their interest in the Property to
Harris Houston Homes, LLC, as Trustee of the Reed Family Trust,
in 	2018. 	ECF No. 19 ¶ 11. 	Five 	months 	later, 	Suniverse, 	LLC
purchased the Property from Harris Houston Homes, subject to the
existing mortgage held by U.S. Bank. Id. ¶ 12. Then, in February
2023, Valifornia purchased the Property from Suniverse, LLC—
also subject to the existing mortgage held by U.S. Bank. ECF
No. 19 ¶ 13.
On December 15, 2023, after Valifornia obtained its interest
in the Property, the 240th District Court of Fort Bend County,
Texas, granted U.S. Bank’s application for expedited foreclosure
under Texas Rule of Civil Procedure 736. ECF No. 21-4 (In re Order
for Foreclosure 	Concerning 	818 	Kings Forest 	Lane 	Richmond,
Texas 77469 Under Tex. R. Civ. P. 736, No. 23-DCV-300842 (Dec.
15, 2023)). The 240th District Court found that U.S. Bank “should
proceed with foreclosure of the Property under the terms of the
security interest and Texas Property Code § 51.002 and TEX. R.
CIV. PROC. 735 AND 736.” Id. at 2.
Since 	the 	240th 	District 	Court 	granted 	U.S. 	Bank’s
application for expedited foreclosure, Valifornia has made several
attempts to prevent U.S. Bank from foreclosing on the Property.
In 2024, after U.S. Bank attempted to foreclose on the Property,
Valifornia filed suit in Texas state court and obtained a temporary
restraining order to halt the sale. ECF No. 21-5 at 1 (Mem. Op. &
Order, Valifornia Inc. v. U.S. Bank N.A., No. 24-2016 (S.D. Tex.
Mar. 13, 2025)). U.S. Bank removed the case to federal court. Id.
As Judge Hanks explained in his March 13, 2025 Memorandum
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Opinion 	and 	Order, 	Valifornia 	“allege[d] 	that 	‘the 	pending
foreclosure sale of its Property [was] wrongful’ because U.S. Bank
‘failed to provide proper notice and opportunity to cure pursuant
to 	Texas 	Property 	Code 	51.002.’” 	Id. at 1. 	Valifornia 	sought
“declaratory 	relief, 	injunctive 	relief, 	actual 	and 	exemplary
damages, and attorney’s fees.” Id. at 1–2. Judge Hanks dismissed
all of Valifornia’s claims with prejudice. Id. at 4. He held that as a
junior lienholder, “Valifornia was not entitled to notice of U.S.
Bank’s foreclosure sale, and the fact that Valifornia did not receive
notice of that sale does not constitute a defect.” Id. Moreover,
Judge Hanks explained that “even if Valifornia were entitled to
notice, its factual allegations would still be insufficient to state a
cognizable claim,” as “claims for violations of statutory foreclosure
sale notice requirements ‘are cognizable only after a foreclosure[,]’”
and no foreclosure had yet occurred. Id. (citing Kew v. Bank of Am.,
N.A., No. 11-2824, 2012 WL 1414978, at *6 (S.D. Tex. Apr. 23,
2012)).
Despite 	Judge 	Hanks’s 	dismissal 	of 	Valifornia’s 	claims,
Valifornia filed another lawsuit against U.S. Bank in October
2025, after U.S. Bank had again attempted to foreclose on the
Property. Valifornia, Inc. v. U.S. Bank, N.A., No. 25-5279 (S.D.
Tex. Nov. 5, 2025) (Pl. Orig. Pet., ECF No. 1-4). Valifornia alleged
that U.S. Bank failed to follow the expedited foreclosure process in
Section 	736 	of 	the 	Texas 	Property 	Code 	when 	it 	posted 	the
Property 	for 	foreclosure 	sale 	to 	occur 	November 	4, 	2025. 	Id.
¶¶ 13–14.
Then, after U.S. Bank posted the Property for foreclosure
sale for the third time on April 7, 2026, Valifornia initiated the
instant 	action. 	ECF 	No. 	1-4 	¶ 14. 	The 	undersigned 	held 	a
scheduling conference in the instant action on May 14, 2026. ECF
No. 17. 	During 	the 	conference, 	the 	parties 	consented 	to 	the
undersigned’s 	jurisdiction 	in 	both 	actions 	pending 	before 	the
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Houston Division of the Southern District of Texas. Id. Both cases
were subsequently transferred to the undersigned, and parallel
scheduling orders for summary judgment briefing were entered.
ECF Nos. 16, 17; Valifornia, No. 25-5279 (S.D. Tex. Nov. 5, 2025)
(ECF Nos. 14, 15, 18, 19).
In both of the pending cases, Valifornia seeks declaratory
judgment that U.S. Bank failed to follow the procedures and notice
requirements of Texas Property Code Section 51.002 and Texas
Rule 	of 	Civil 	Procedure 	736. 	ECF No. 1-4 at 4–5; 	Valifornia,
No. 25-5279 	(S.D. 	Tex. 	Nov. 	5, 	2025) 	(Pl. 	Orig. 	Pet. 	at 	4–5).
Valifornia also brings claims for breach of contract and violations
of Texas Property Code Section 51.002. ECF No. 1-4 at 5–6. All of
Valifornia’s claims are based on U.S. Bank’s alleged failure to send
foreclosure notices to Valifornia.
2. Legal Standard and Analysis
A temporary restraining order (TRO) is an extraordinary
remedy that should only be awarded upon a clear showing that the
plaintiff is entitled to such relief. Winter v. Nat. Res. Def. Council,
Inc., 555 U.S. 7, 22 (2008). To obtain either a TRO or preliminary
injunction, 	the 	movant 	must 	clearly 	show: 	(1) a 	substantial
likelihood of success on the merits; (2) a substantial threat of
irreparable harm if the injunction is not granted; (3) that the
threatened injury outweighs any harm that may result from the
injunction to the non-movant; and (4) that the injunction will not
undermine the public interest. Voting for Am., Inc. v. Steen, 732
F.3d 382, 386 (5th Cir. 2013); Black v. NewRez LLC, No. 24-0028,
2024 WL 1775343, at *1 (S.D. Tex. Apr. 2, 2024), R. & R. adopted
(S.D. Tex. Apr. 24, 2024). The party moving for a TRO must carry
the burden as to all four elements before a TRO may be issued.
Voting for Am., 732 F.3d at 386; Kalkan v. Fed. Nat’l Mortg. Ass’n
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(Fannie Mae), No. 24-2548, 2025 WL 3251620, at *1 (S.D. Tex.
Nov. 21, 2025).
To satisfy the first element of likelihood of success on the
merits, a movant is not required to prove their entire case. See
Janvey v. Alguire, 647 F.3d 585, 595– 96 (5th Cir. 2011). Rather,
the court looks to standards provided by the substantive law. Id.
As to the second element, a plaintiff must show that there is no
adequate 	remedy 	at 	law 	before 	either 	a 	TRO 	or 	preliminary
injunction may be issued. See id. at 600. “The possibility that
adequate compensatory or other corrective relief will be available
at a later date, in the ordinary course of litigation, weighs heavily
against a claim of irreparable harm.” N. Miss. Med. Ctr., Inc. v.
Quartiz Techs., No. 23-60483, 2025 WL 980568, at *7 (5th Cir.
Apr. 1, 2025).
Valifornia is not entitled to a TRO or preliminary injunction.
It has not shown that it is likely to succeed on the merits. It is
undisputed that Valifornia purchased its interest in the Property
subject to U.S. Bank’s lien. Valifornia’s allegations still show only
that it is a junior lienholder to U.S. Bank. There is no evidence or
allegation that Valifornia became a debtor under U.S. Bank’s lien,
or that Valifornia has any relationship whatsoever to U.S. Bank.
Judge Hanks has already decided the exact issue presented here—
Valifornia, as a mere junior lienholder, is not entitled to notice of
U.S. Bank’s foreclosure sale. ECF No. 21-5 at 4.
Valifornia 	argues 	that 	“U.S. Bank 	is 	required 	to 	follow
Rule 736 of the Texas Rules of Civil Procedure and obtain a court
order authorizing it to post the Property for foreclosure sale.” ECF
No. 19 ¶ 16. U.S. Bank, however, has already done just that. ECF
No. 21-4 (“IT IS THEREFORE ORDERED, ADJUDGED AND
DECREED that [U.S. Bank], its successors and assigns, may
proceed with foreclosure under the Security Instrument executed
by CAROL E. REED and ISAIAH REED . . . .”).
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During the July 6, 2026 hearing on the instant motion,
Valifornia argued that the fact that Suniverse, LLC was named as
a 	respondent 	in 	the 	prior 	Rule 736 	proceeding 	implies 	that
Valifornia was also required to be named as a respondent. There
is no basis in law or in fact for that proposition.
Valifornia’s 	claims 	under 	Texas 	Property 	Code 	Section
51.002 are also unlikely to succeed on the merits. At this point,
because no foreclosure sale has occurred, Valifornia’s claims under
Section 51.002 are not cognizable. Kew, No. 11-2824, 2012 WL
1414978, at *6. Even if the scheduled foreclosure sale takes place
on July 7, 2026, Valifornia can obtain money damages if it succeeds
on the merits of its notice-related claims. Accordingly, Valifornia
also has not shown that there is a substantial threat of irreparable
harm if the injunction is not issued.
3. Conclusion
Because Valifornia has not clearly shown that it is entitled
to 	injunctive 	relief, 	its 	Application 	for 	Injunctive 	Relief,
ECF No. 19, is DENIED.
As discussed during the July 6, 2026 hearing, by July 10,
2026, Valifornia may supplement its summary judgment response
with authority in support of its third-party beneficiary argument.
Signed at Houston, Texas, on July 6, 2026.
______________________________________
Peter Bray
United States Magistrate Judge
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