United States District Court, District of Columbia
D. BATES United States District Judge
the Court is  plaintiff's motion for a preliminary
injunction. Plaintiff seeks to enjoin defendants SP Funding
452, LLC and Snowpoint Capital, LLC (collectively, the
“lender defendants”) from proceeding with a
foreclosure sale of the property located at 2150 Florida
Avenue N.W. in Washington, D.C. (“the property”),
of which plaintiff is a joint owner. Plaintiff alleges that
the security interest on which the lender defendants seek to
foreclose was invalidly transferred by defendant Evelina
Lekser-plaintiff's daughter and the other joint owner of
the property-using a forged power of attorney. For the
following reasons, the Court will grant plaintiff's
motion and preliminarily enjoin the foreclosure sale.
October 2008, plaintiff and defendant Lekser purchased the
property as joint tenants with right of survivorship for
$800, 000. They did so with the intention of renovating the
property and ultimately “flipping” it for a
profit. Verified Compl. [ECF No. 1] ¶¶ 16-17. They
financed the purchase by acquiring a $417, 000 loan from Bank
of America, which was secured by a first mortgage on the
property. Id. ¶ 18. Because plaintiff is a
resident of Russia and was not present in the United States
at the time of the purchase, he executed a limited power of
attorney that authorized defendant Lekser to execute
documents related to the Bank of America loan and mortgage.
Id. ¶ 20.
2008 and 2015, plaintiff allegedly invested hundreds of
thousands of dollars to make repairs and improvements to the
property. Id. ¶¶ 23, 28. Plaintiff alleges
that on or around March 30, 2015, he informed defendant
Lekser that he wished to list the property for sale to
recover his capital investment and an agreed-upon share of
the net proceeds from the sale. Id. ¶ 29.
According to plaintiff, defendant Lekser responded by
perpetrating a fraudulent scheme to withdraw equity from the
property for her own personal gain. Id. ¶ 30.
Lekser allegedly carried out the scheme, along with several
co-conspirators also named as defendants, by fraudulently
obtaining an $800, 000 hard money loan from the lender
defendants in November 2015. Id. ¶¶ 31,
77. She allegedly provided false information to the lender
defendants, and utilized a fraudulent power of attorney that
purported to give her authority to act on plaintiff's
behalf, in order to obtain the commercial loan and refinance
the then-outstanding Bank of America mortgage encumbering the
property. Id. ¶¶ 78-79. Approximately half
of the proceeds of the $800, 000 loan were utilized to pay
off the Bank of America mortgage, while the remaining funds
were allegedly misappropriated by defendant Lekser and her
co-conspirators. Id. ¶¶ 101, 103, 123. The
last payment on the $800, 000 loan was made in June 2016, and
the loan matured on December 1, 2016.
2016, plaintiff sued defendant Lekser in a related action
pending before this Court. See Shvartser v. Lekser,
No. 16-cv-1199-JDB (D.D.C. filed June 20, 2016) [hereinafter
“Shvartser I”]. In July 2017, this Court
granted plaintiff's motion for partial summary judgment
in Shvartser I, and provided plaintiff with the
ability to access the property, to complete any necessary
repairs, to retain a licensed realtor to sell the property,
and to deposit all proceeds from the sale with the Clerk of
Court pending the outcome of the litigation. See
July 5, 2017 Order, Shvartser I [ECF No. 87].
Despite the passage of more than eight months, the property
has not yet been sold.
February 28, 2018, after the lender defendants had notified
plaintiff that they intended to foreclose on the property on
March 1, 2018, plaintiff filed this lawsuit to block the
foreclosure sale. Along with the verified complaint,
plaintiff concurrently filed an emergency motion for a
temporary restraining order (“TRO”). Mot. for
Temporary Restraining Order [ECF No. 3]. The Court held a TRO
hearing on the afternoon of February 28, 2018, and granted
plaintiff's motion the following day. See March
1, 2018 Order [ECF No. 6] at 2. The Court set a briefing
schedule for plaintiff's motion for a preliminary
injunction and permitted the parties to serve a limited
number of interrogatories and document requests in connection
with the briefing. Id. at 2-3. Plaintiff's
motion is now fully briefed and ripe for decision.
preliminary injunction is “an extraordinary and drastic
remedy, one that should not be granted unless the movant,
by a clear showing, carries the burden of
persuasion.” Mazurek v. Armstrong, 520 U.S.
968, 972 (1997); see also Abdullah v. Obama, 753
F.3d 193, 197 (D.C. Cir. 2014). “The purpose of such
interim equitable relief is not to conclusively determine the
rights of the parties, but to balance the equities as the
litigation moves forward.” Trump v. Int'l
Refugee Assistance Project, 137 S.Ct. 2080, 2087 (2017)
(citation omitted). A party seeking preliminary injunctive
relief must make a “clear showing that four factors,
taken together, warrant relief:  likely success on the
merits,  likely irreparable harm in the absence of
preliminary relief,  a balance of the equities in its
favor, and  accord with the public interest.”
League of Women Voters of U.S. v. Newby, 838 F.3d 1,
6 (D.C. Cir. 2016) (quoting Pursuing Am.'s Greatness
v. FEC, 831 F.3d 500, 505 (D.C. Cir. 2016)).
in this Circuit have often balanced these factors on a
“sliding scale” whereby a movant's unusually
strong showing on one factor could compensate for weaker
showings on one or more other factors. See, e.g.,
Davis v. Billington, 76 F.Supp.3d 59, 63-64 (D.D.C.
2014) (citing Davis v. Pension Benefit Guar. Corp.,
571 F.3d 1288, 1291-92 (D.C. Cir. 2009)). Still, it is
crucial for the movant to show at least some harm to obtain
preliminary injunctive relief. See Chaplaincy of Full
Gospel Churches v. England, 454 F.3d 290, 297 (D.C. Cir.
2006) (“A movant's failure to show any irreparable
harm is . . . grounds for refusing to issue a preliminary
injunction, even if the other three factors entering the
calculus merit such relief.”). Moreover,
“[a]bsent a ‘substantial indication' of
likely success on the merits, ‘there would be no
justification for the court's intrusion into the ordinary
processes of administration and judicial review.'”
Nat'l Parks Conservation Ass'n v. U.S. Forest
Serv., No. 15-01582, 2015 WL 9269401, at *1 (D.D.C. Dec.
8, 2015) (quoting Am. Bankers Ass'n v. Nat'l
Credit Union Admin., 38 F.Supp.2d 114, 140 (D.D.C.
1999)); accord Ark. Dairy Co-op Ass'n, Inc. v. U.S.
Dep't. of Agric., 573 F.3d 815, 832 (D.C. Cir.
is an open question in this Circuit whether the Supreme Court
invalidated the sliding scale approach when it decided
Winter v. Natural Resources Defense Council, 555
U.S. 7 (2008), and relatedly whether the likelihood of
success factor constitutes an “independent,
free-standing requirement for a preliminary
injunction”. Sherley v. Sebelius, 644 F.3d
388, 392-93 (D.C. Cir. 2011); see also Nat'l Parks
Conservation Ass'n, 2015 WL 9269401, at *2.
Likelihood of ...