IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

ERIC DIETZE and VICTORIA

SEEWALDT, husband and wife,

Appellants,

JAMES V. KELLEY and ANGELA K.

KELLEY, husband and wife; CHRISTINE

TESCH-SPIERS; TAMARA KITTREDGE;

JOHN E. FRIARS and ELVERA I.

FRIARS, husband and wife; DEAN

STRAIN and SHIRLEY R. STRAIN

husband and wife; JP MORGAN CHASE

BANK, N.A.; SCHOOL EMPLOYEES

CREDIT UNION OF WASHINGTON;

MORTGAGE ELECTRONIC

REGISTRATION SYSTEMS, INC., AS

NOMINEE FOR AMERICAN MORTGAGE

NETWORK, INC.; MORTGAGE

ELECTRONIC REGISTRATION

SYSTEMS, INC., AS NOMINEE FOR

COUNTRYWIDE BANK, FSB,

Respondents,

VASHON PARK DISTRICT,

Defendant.

No. 71098-2-

DIVISION ONE

UNPUBLISHED OPINION

FILED: June 8, 2015

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Appelwick, J. — The Dietzes appeal the trial court's summary judgment order

dismissing their quiet title action with prejudice. The Dietzes filed a complaint against

their neighbors and their neighbors' lenders seeking an easement to access their

allegedly landlocked property. Five lenders were listed on the complaint, but the Dietzes

served only one. The litigation proceeded and the Dietzes failed to timely serve the

unserved lenders, even after receiving leave from the court to do so. Consequently, the

trial court granted a motion to dismiss one of the unserved lenders. The trial court then
No. 71098-2-1/2

dismissed the Dietzes' action with prejudice, because their failure to join an indispensable

party constituted inexcusable neglect. The record does not support the legal conclusion

that the named lenders were necessary and indispensable parties to this litigation.

Failure to serve any them or dismissal of any of them did not provide a proper basis to

dismiss this action with prejudice as to the defendant owners. We vacate the summary

judgment order and remand for further proceedings.

FACTS

On April 8, 2011, Eric Dietze and Victoria Seewaldt (the Dietzes) filed a quiet title

action. The Dietzes filed the action seeking an easement to access their allegedly

landlocked property in Vashon.1 The defendants named in the complaint were

neighboring property owners and their lenders. The Dietzes alleged that they required

access to their property from roadways adjacent to the neighboring properties.

Specifically, the Dietzes claim access from a road adjacent to properties owned by James

and Angela Kelley and Christine Tesch-Spiers. Alternatively, the Dietzes claimed access

across properties owned by Vashon Park District,2 Tamara Kittredge, John and Elvera

Friars, and Dean and Shirley Strain.3

1 Specifically, the complaint sought relief for a "judgment confirming plaintiffs'

easement rights in the platted rights-of-way in the Plat of Chatauqua Beach providing

access to [the Dietzes'] real property." Priorto the filing ofthe Dietzes' action, neighboring

property owners broughttheir own actions to vacate unopened platted streets that abutted

their property. The Dietzes allege that the judgments in these actions rendered their

property landlocked and that they need an easement to access their properties.

2 The Vashon Park District was dismissed on March 28, 2013, through an agreed

stipulation, because ittransferred all its interest in the property to Kittredge.

3 Collectively we refer to the Kelleys, Thesch-Spiers, Kitteredge, the Friars, and

the Strains as the "neighboring owners."
No. 71098-2-1/3

The complaint named several lenders that may have interests in the properties,

because of deeds of trust encumbering the properties. Specifically, the Dietzes named

Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for American

Mortgage Network (Kelley property), MERS as nominee for Countrywide Bank FSB

(Kelley property), JPMorgan Chase (Chase) (Kittredge and Tesch-Spiers property),

School Employees Credit Union of Washington (SECU) (Kittredge property), and Boeing

Employees' Credit Union (BECU) (Friars property). The complaint sought an easement

to provide the Dietzes access to their property over the previously vacated street plats

crossing neighboring properties. It did not seek fee simple title to any portion of the

neighboring properties, nor did it seek to change the priority of any security interests

currently encumbering those properties.

The Dietzes served the summons and complaint on SECU, the Strains, the Friars,

Kittredge, the Kelleys, Tesch-Spiers, and Vashon Park District between April 13, 2011

and April 17, 2011. But, the Dietzes did not serve MERS, Chase, or BECU.

On April 4, 2013, almost two years after being served with the summons and

complaint, SECU moved for summary judgment arguing that the Dietzes' lawsuit should

be dismissed under CR 19(a). Itclaimed dismissal was appropriate, because the lenders

are necessary parties to a lawsuit that seeks to quiet title to the real property pledged to

secure payment of their loans and that the lenders were not all served. In support of its

motion, SECU attached a litigation guarantee.4 The litigation guarantee lists the deeds

of trust of the lenders that the Dietzes named as defendants in the lawsuit, but failed to

4 A litigation guarantee provides title information from public records about an

estate or property interest. It provides an assurance against loss to the party requesting

it if any of the information is incorrect.
No. 71098-2-1/4

serve—Chase, BECU, and MERS for American Mortgage Network Inc. and Countrywide

Bank. The Kelleys, Tesch-Spiers, Kittredge, the Friars, and the Strains all subsequently

joined SECU's motion for summary judgment.

The Dietzes timely responded to the motion on April 19. They claimed that SECU

and the neighboring owners failed to prove that the lenders are indispensable parties.

They claimed that the lenders did not have an interest in the property and that the

respective neighboring owners had never previously joined their lenders in their own

earlier quiet title actions. The trial court declined to rule on the motion for summary

judgment at that point.

On May 2, the Dietzes filed a motion for leave to effectuate service of process on

defendants which have not been served in this case. Without conceding that the lenders

were indispensable parties, the Dietzes argued that justice required that they be granted

leave to effectuate service of process on the lenders who were named but not yet served.

Then, the Dietzes filed a supplemental response to SECU's motion for summary

judgment. Rather than addressing why the lenders were not served or why the lenders

were not indispensable parties, the Dietzes argued that if the lenders are indispensable

parties, the appropriate remedy would be to grant the motion to effectuate service of

process. Alternatively, the Dietzes argued that ifthe court decides dismissal of the action

is appropriate, it should dismiss without prejudice.

On May 21, the trial court granted the Dietzes' motion for leave to effectuate

service of process on the unserved lenders. And, it ordered that Chase, BECU, and

MERS as nominee for American Mortgage Network and Countrywide be served before

June 15, 2013.
No. 71098-2-1/5

The Dietzes served BECUand Chase on June 21. They served MERS as nominee

for American Mortgage Network and Countrywide on June 20.

On August 13, Chase moved to dismiss the claims against it on the grounds that

it was not served in compliance with the court's May 20 order. The Dietzes did not

respond to the motion. The trial court entered an order granting Chase's motion to

dismiss.

Shortly thereafter, on September 17, Kittredge and SECU moved the court to rule

on their pending April 4, 2013 motion for summary judgment to dismiss the Dietzes'

lawsuit for their failure to join indispensable parties. They argued that summary judgment

dismissal was appropriate, because Chase was an indispensable party and had been

dismissed from the lawsuit.

On September 26, BECU moved to dismiss on the same grounds as Chase. While

BECU's motion was pending before the court,5 the court granted SECU's and the

neighboring owners' motion for summary judgment. The court found that the defendant

lenders named in the Dietzes' complaint were necessary parties under CR 19. It

concluded that the Dietzes' failure to timely serve all the lenders named in the lawsuit was

the result of inexcusable neglect, because the Dietzes had access to the litigation

guarantee and because the Dietzes named the lenders in the complaint and described

their legal interests in the properties at issue. It found that the Dietzes failed, without

excuse, to serve the lenders by the June 15 deadline and failed to oppose Chase's motion

to dismiss. It concluded that, as a result, an indispensable party was not before the court

5The trial court later granted BECU's motion to dismiss on October 7, 2013.
No. 71098-2-1/6

on the quiet title action. The court granted the motion for summary judgment and

dismissed the lawsuit with prejudice.

The Dietzes appeal.

STANDARD OF REVIEW

This court reviews summary judgment orders de novo. Hadlev v. Maxwell, 144

Wn.2d 306, 310-11, 27 P.3d 600 (2001). Summary judgment is appropriate only where

there are no genuine issues of material fact and the moving party is entitled to judgment

as a matter of law. CR 56(c); Peterson v. Groves. 111 Wn. App. 306, 310, 44 P.3d 894

(2002). When considering the evidence, the court draws reasonable inferences in the

light most favorable to the nonmoving party. Schaafv. Hiqhfield, 127 Wn.2d 17, 21, 896

P.2d 665 (1995).

DISCUSSION

The trial court found that the lenders named in the Dietzes' complaint were

necessary parties to the quiet title action under CR 19. And, one of those lenders, Chase,

had been dismissed. The Dietzes argue that SECU and the neighboring owners failed to

establish that the lenders are necessary parties. They contend that the trial court erred

in granting SECU's and the neighboring owners' motion for summary judgment on this

basis.

This court reviews a trial court's decision under CR 19 for abuse of discretion, but

reviews any legal conclusion underlying a CR 19 determination de novo. Gildon v. Simon

Prop. Grp., Inc.. 158 Wn.2d 483,493,145 P.3d 1196 (2006). A court abuses its discretion

when its decision is manifestly unreasonable, or exercised on untenable grounds or for

untenable reasons. Id. at 494. An abuse of discretion is found if the trial court relies on
No. 71098-2-1/7

unsupported facts, takes a view that no reasonable person would take, applies the wrong

legal standard, or bases its ruling on an erroneous view of the law. Id.

Under CR 19, a trial court undertakes a two part analysis. ]d. First, the court must

determine whether a party is needed for just adjudication. ]cL; CR 19(a).

CR 19(a) outlines which parties are necessary:

A person who is subject to service of process and whose joinder will not

deprive the court of jurisdiction over the subject matter of the action shall be

joined as a party in the action if (1) in his absence complete relief cannot be

accorded among those already parties, or (2) he claims an interest relating

to the subject of the action and is so situated that the disposition of the

action in his absence may (A) as a practical matter impair or impede his

ability to protect that interest or (B) leave any of the persons already parties

subject to a substantial risk of incurring double, multiple, or otherwise

inconsistent obligations by reason of his claimed interest. Ifhe has not been

so joined, the court shall order that he be made a party.

Second, if an absent party is needed but it is not possible to join the party, then

the court must determine whether in "'equity and good conscience'" the action should

proceed among the parties before it or should be dismissed, the absent party being thus

regarded as indispensable. Gildon, 158 Wn.2d at 495 (quoting Crosby v. Spokane

County. 137 Wn.2d 296, 306-07, 971 P.2d 32 (1999)); CR 19(b). The factors to be

considered by the court include: (1) to what extent a judgment rendered in the person's

absence might be prejudicial to him or those already parties; (2) if there is prejudice, the

extent to which, by protective provisions in the judgment, by shaping of relief, or other

measures, the prejudice can be lessened or avoided; (3) whether a judgment rendered in

the person's absence will be adequate; and (4) whether the plaintiff will have an adequate

remedy ifthe action is dismissed for nonjoinder. Gildon, 158 Wn.2d at 495.
No. 71098-2-1/8

In analyzing whether a party is a necessary or indispensable party, CR 19 calls for

determinations that are heavily influenced by the facts and circumstances of individual

cases, jd. The burden of proof for establishing indispensability is on the party urging

dismissal, jd.

In granting SECU's and the neighboring owners' motion for summary judgment,

the trial court considered the parties' briefs, declarations, and oral argument. It then

stated:

The court finds that the defendant lenders named in [the Dietzes']

complaint are necessary parties under CR 19. [The Dietzes'] failure to

timely serve all the lenders named in the lawsuit was the result of

inexcusable neglect. Before filing suit, [the Dietzes] ordered and received

a litigation guaranty identifying them. [The Dietzes] named them in the

Complaint and described their legal interests in the properties at issue. [The

Dietzes] sought and were granted leave to serve them by June 15, 2013.

Yet [the Dietzes] failed, without excuse, to serve them by that deadline and

failed, without explanation to oppose JP Morgan Chase's motion to dismiss.

As a consequence, an indispensable party ... is not before this Court in the

present action seeking, in part, to quiet title over the Kittredge/JPMorgan

Chase/Credit Union property.

In defending this ruling as correct, the lenders cite to Anderson & Middleton

Lumber Co. v. Quinault Indian Nation for the propositions that all owners of an interest in

property are presumably indispensable parties to an action involving that property and

that the failure to join an indispensable party requires the dismissal of a quiet title action.

79 Wn. App. 221, 228, 901 P.2d 1060 (1995), affd, 130 Wn.2d 862, 929 P.2d 379 (1996)).

But, Anderson is inapposite. The Anderson court held that the United States was an

indispensable party in litigation regarding the subsurface rights of a piece of property in

an action to quiet title, id, at 228-29. The court stated that all owners of an interest in

property are presumably indispensable parties to an action involving that property. Id.

8
No. 71098-2-1/9

But, in that case, the United States was an equitable owner of an interest in the

subsurface rights. kL Here, by contrast, there is no evidence in the record that the

lenders are owners of the property, rather than merely secured parties.

Additionally, the lenders rely on Public Utility District No. 1 of Pend Oreille County

v. Inland Power & Light Company, 64 Wn.2d 122, 390 P.2d 690 (1964), for the assertion

that a lender with a mortgage on a property is a necessary and indispensable party to a

proceeding involving that property. Inland involved an eminent domain proceeding in

which a county sought to condemn all of the electrical properties within its boundaries.

Id, at 122-23. The electrical properties belonged to Inland, a nonprofit corporation that

worked to bring electricity and telephone service to the remote county. Id. The United

States had provided low interest rate loans to Inland to fund its work. Id. The loans were

secured by mortgages upon Inland's properties. Id, The Inland court determined that the

United States was both a necessary and indispensable party in the eminent domain

action. Id. at 125. But, it made that determination only after considering the provisions

in the loan contracts and mortgages between Inland and the United States, id. at 123. It

opined that they contained numerous restraints and controls not found in a usual security

transaction and said that a survey of the loan contracts and mortgages illustrated that the

United States had a substantial interest in the properties. Id. There is no evidence in the

record here that any of the lenders held anything more than a usual security interest.

The trial court's order notes that the Dietzes obtained a litigation guarantee

identifying the lenders, named the lenders inthe lawsuit, and identified their legal interests

in the property. There is no evidence that the lenders established an ownership interest,

rather than a security interest, in the property. There is no evidence that the lenders
No. 71098-2-1/10

established that their security interest would be impaired if the Dietzes' easement claim

was established. The moving party, the lenders, have that burden. Gildon, 158 Wn.2d

at 495. Understandably then, the trial court's order did not analyze how or why the lenders

are necessary parties under CR 19(a). The court appears merely to have assumed that

the litigation guarantee and the naming of the lenders in the complaint made the lenders

necessary parties. It did not. Further, it appears from the record that after the trial court

summarily concluded the lenders were necessary parties, it similarly assumed their

indispensability without considering the relevant factors under CR 19(b).

The record does not establish facts that would allow the trial court to conclude

under CR 19 that the lenders were necessary, let alone indispensable parties. We hold

that, on this record, it was an abuse of discretion for the trial court to conclude that the

lenders were both necessary and indispensable parties.

We therefore vacate the trial court's order granting SECU's and the neighboring

owners' motion for summary judgment. We remand for further proceedings.6

WE CONCUR:

f~^£*TsC\

6 Because we vacate the order granting summary judgment, we need not address

the Dietzes' additional related assignments of error.

10
Dietze v. Kelley, No. 71098-2-1

Cox, J. (concurring) - I concur. I write separately to emphasize that the

fact that an entity is named in a litigation guarantee does not, without more, make

that entity either a necessary or indispensable party for purposes of CR 19.

Because respondent lenders failed to meet their burden to establish that they are

either necessary or indispensable parties to this action, the summary judgment

order dismissing this action should be reversed.

In their complaint to quiet title, the Dietzes named as defendants various

lenders who hold deeds of trust encumbering property that is at issue in this

case. They also named various entities that are associated with the deeds of

trust. I refer to all these entities as "lenders" for purposes of this discussion. It

appears the Dietzes named these lenders as defendants in this action because

they all are named in the special exceptions to a litigation guarantee dated

January 25, 2011.1

As the majority discusses, the lenders in this case rely, in part, on Public

Utility District No. 1 of Pend Oreille County v. Inland Power & Light Co. to show

that they are necessary and indispensable parties to this action.2 That reliance is

misplaced, as the majority explains.

1Clerk's Papers at 344-68.

2 64 Wn.2d 122, 390 P.2d 690 (1964).
No. 71098-2-1/2

But there is an additional reason why that case does not control here. The

lenders fail to cite a subsequent supreme court case that distinguishes Inland.

That case is City of Pullman, Whitman County v. Glover.3

There, the city of Pullman commenced an eminent domain proceeding to

condemn certain real property. The property was subject to a lease in which the

United States was the tenant. The City did not name the United States as a

defendant in the proceeding, notwithstanding the record interest of the United

States in the property.

The landlords, who were named as a party defendant, moved to dismiss.

They did so "on the basis that the trial court lacked jurisdiction over the subject

matter of the action since the United States is an occupant of the land, has an

interest in it and is, therefore, a necessary party defendant."4

The city argued "that it seeks the land only 'subject to the . . . [existing]

lease,' that the government's interest is not being disturbed, and that the

government is not a necessary party."[5]

The trial court granted the landlord's motion to dismiss.6 Itdid so on the

basis of Inland.7

3 73 Wn.2d 592, 592-95, 439 P.2d 975 (1968).

4 \± at 592-93.

5id. at 593 (emphasis added).

7 Id.
No. 71098-2-1/3

On appeal, the supreme court reversed. In doing so, the court stated:

The interest of the United States [in Inland] would have been

materially affected; here it will not be.

The lands being acquired here will be taken subject to the

leasehold interest of the United States and the city of Pullman

agrees that it 'will assume and fulfill all covenants under said lease

that are the obligations of the Lessors to keep and perform.' No

issue exists between the city of Pullman and the United States and

none can arise under the city's petition. The interest of the United

States is being diminished in no respect, its interest is not being

condemned. That being so, it is not entitled to compensation and

is not a necessary party defendant.^

These principles control here. Neither the complaint to quiet title nor

anything else in this record shows any intent by the Dietzes to adversely affect

the liens of the deeds of trust of respondent lenders. Moreover, at oral argument

of this case before this court, the Dietzes confirmed that they do not challenge

either the validity or priority of the deeds of trust that encumber the property at

issue. And they correctly conceded at oral argument that should they succeed in

quieting title to the property in this action, that property will remain subject to the

liens of the deeds of trust of the lenders. In sum, there is absolutely no showing

here of any adverse effect on the deeds of trust by virtue of this action. In fact,

there is no showing of any effect at all.

Accordingly, the lenders have failed in their burden to show that they are

necessary parties under CR 19. Without first establishing that they are

necessary parties, they cannot establish that they are also indispensable

8 Id. at 594.
No. 71098-2-1/4

parties.9 That the Dietzes erroneously named the lenders as parties defendant in

their complaint does not alter the correct analysis of this issue.

No one disputes that the owners of the real estate at issue in this case are

necessary parties under CR 19. Thus, that question is not before this court.

For these reasons, summary judgment of dismissal of this action with

prejudice was improper. The lenders are neither necessary nor indispensable

parties. Reversal of that order is warranted.

^qx,J~.

a^/ j

9 Gildon v. Simon Prop. Grp., Inc., 158 Wn.2d 483, 494-95, 145 P.3d 1196

(2006).