IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

TONY SCHWARTZ, 

Plaintiff, 

v. 

CHRISTIANA TRUST, A DIVISION OF 

WILMINGTON SAVINGS FUND SOCIETY, 

FSB AS TRUSTEE OF ARLP TRUST 3; 

BANK OF AMERICA, N.A.; AND 

WILMINGTON TRUST, NATIONAL 

ASSOCIATION, NOT IN ITS INDIVIDUAL 

CAPACITY BUT AS TRUSTEE OF ARLP 

SECURITIZATION TRUST, SERIES 2014-2, 

Defendants. 

PAPAK, Magistrate Judge: 

3:15-cv-02075-PK 

OPINION AND ORDER 

Plaintiff Tony Schwartz brings this action against defendants Christiana Trust, a Division 

of Wilmington Savings Fund Society, FSB as trustee of ARLP Trust 3 ("Christiana Trnst 3 ") and 

Bank of America, N .A. Schwartz seeks a declaratory judgment that he rescinded a loan and deed 

of trust under the provisions of the Truth in Lending Act. Schwartz also asserts claims under the 

Real Estate Settlement Procedures Act and the Fair Debt Collection Practices Act. Now before 

the court is a Motion to Substitute (#10) filed by nonparty Wilmington Trust, National 

Association, Not in Its Individual Capacity But as Trustee of ARLP Securitization Trust, Series 

2014-2 ("Wilmington Trust"). For the reasons provided below, Wilmington Trust's Motion to 

Substitute is granted in part and denied in pait. 

OPINION AND ORDER-PAGE 1 

Case 3:15-cv-02075-PK Document 18 Filed 01/22/16 Page 1 of 7
FACTUAL BACKGROUND 

This case relates to a residential mortgage loan Schwartz obtained from Countrywide 

Bank in August of2005 (the "Loan"). In exchange for the Loan, Schwaiiz executed a 

promissory note secured by a deed of trust against real property located at 22355 SW Stafford 

Road, Tualatin, Oregon (the "DOT"). Schwatiz presents the court with the following sequence 

of assignments of the DOT: 

a. On April 14, 2011 MERS transferred/assigned its interest in the Deed of Trust 

to BAC HOME LOANS SERVICING, LP, FKA Countrywide Home Loans 

Servicing, LP (recorded 05/09/2011); 

b. Next there was an Assignment dated May 30, 2014 wherein BAC transferred to 

Cluistiana Trust, division of Wilmington Savings Fund Society, FSB, not in its 

individual capacity but as Trustee of ARLP Trust 3 (recorded 06/04/2014); 

c. Consequently, there was an "Corrective" Assignment dated July 14, 2014 

wherein BAC transfers to Christiana Trust, division of Wilmington Savings Fund 

Society, FSB, not in its individual capacity but as Trustee of ARLP Trust 4 

(recorded 7/21/14); and 

d. Finally, there was a Corporate Assignment dated April 21, 2015 wherein 

Christiana Trust, a division of Wilmington Savings Fund Society, FSB, not in its 

individual capacity but as Trustee of ARLP Trust 4 assigns to "Wilmington Trust, 

N.A., not in its individual capacity but as Trustee of ARLP Securitization Trust, 

Series 2014-2 at c/o Altisource Asset (recorded 09/09/2015)[.] 

Plf.'s Resp. 6 (#16). Schwartz has not offered any evidence of the above-quoted assignments. 

However, the parties agree that the final transfer from Christiana Trust, a division of Wilmington 

Savings Fund Society, FSB, not in its individual capacity but as Trustee of ARLP Trust 4 

("Clnistiana Trnst 4") to Wilmington Trust occurred on April 21, 2015. This final transfer is at 

the heati of Wilmington Trust's Motion to Substitute, as Wilmington Trust contends that it is 

now the sole owner of the beneficial interest under the DOT. 

On August 27, 2015, Schwartz allegedly sent a written notice of rescission to Christiana 

Trnst 4 and Bank of America. Schwartz did not send the notice to Wilmington Trust. Schwartz 

OPINION AND ORDER-PAGE 2 

Case 3:15-cv-02075-PK Document 18 Filed 01/22/16 Page 2 of 7
contends that because neither Christiana Trust 4 nor Bank of America replied to his notice, the 

Loan and DOT were rescinded by operation of law on August 27, 2015. 

PROCEDURAL BACKGROUND 

Wilmington Trust filed its Motion to Substitute (#10) on December 11, 2015. Schwatiz 

filed his Response (#12) on January 8, 2016. Wilmington Trust filed its Reply (#17) on January 

13, 2016. This matter is fully submitted and prepared for decision. 

LEGAL STANDARDS 

I. Substitution of Parties 

Federal Rule of Civil Procedure 25(c) provides: "Ifan interest is transferred, the action 

may be continued by or against the original party unless the court, on motion, orders the 

transferee to be substituted in the action or joined with the original party." "The decision to grant 

or deny substitution under Rule 25(c) rests within the sound discretion of the court." Copelan v. 

Techtronics Indus. Co., 95 F. Supp. 3d 1230, 1235 (S.D. Cal. 2015) (citation omitted). 

II. Required Joinder of Parties 

When feasible, Federal Rule of Civil Procedure l 9(a) requires the court to join a person 

"who is subject to service of process and whose joinder will not deprive the court of subjectmatter jurisdiction" if (1) "in that person's absence, the comi cannot accord complete relief 

among existing parties" or (2) "that person claims an interest relating to the subject of the action 

and is so situated that disposing of the action in the person's absence may ... as a practical 

matter impair or impede the person's ability to protect the interest .... " 

DISCUSSION 

Wilmington Trust argues that the transfer of the DOT from Christiana Trust 4 to 

Wilmington Trust renders it the real paiiy in interest under Federal Rule of Civil Procedure 17(a) 

OPINION AND ORDER-PAGE 3 

Case 3:15-cv-02075-PK Document 18 Filed 01/22/16 Page 3 of 7
and warrants its substitution for Christiana Trust 3 as the proper defendant under Federal Rule of 

Civil Procedure 25( c ). Wilmington Trust also appears to argue, in the alternative, that it should 

be joined as a necessary party under Federal Rule of Civil Procedure 19(a). 1 Schwartz has failed 

to provide any responsive argument regarding Federal Rules of Civil Procedure 17, 19, or 25. 

Rather, Schwa1tz improperly attempts to argue the merits of his claims. 

For the reasons provided below, Wilmington Trust cannot substitute Christiana Trust 3. 

However, Wilmington Trust is a necessary patty, and it is therefore joined as a codefendant in 

this action. 

I. Substitution of Parties and Real Party in Interest 

Substitution of Wilmington Trust for Christiana Trust 3 as the real patty in interest is not 

appropriate. As stated above, Rule 25( c) permits the trial court to substitute a transferee of an 

interest in the subject matter of the litigation for the original party in the action. However, the 

rule applies only to transfers of interest that occur during the pendency of litigation; it does not 

apply to transfers that occur before the litigation begins. See, e.g., Flintkote Co. v. Aviva PLC, 

No. 15-CV-01638-SI, 2015 WL 9269761, at *3 (N.D. Cal. Dec. 21, 2015) (citations omitted); 

QSI-Fostoria DC, LLC v. General Elec. Capital, 223 F.R.D. 465, 467 (N.D. Ohio 2004); accord 

Andrews v. Lakeshore Rehab. Hosp., 140 F.3d 1405, 1407 (11th Cir. 1998) (citing lvfizukami v. 

Buras, 419 F.2d 1319, 1320 (5th Cir. 1969)). It is undisputed that the transfer from Christiana 

Trust 4 to Wilmington Trust occuned on April 21, 2015. Schwartz initiated this action on 

November 4, 2015-after the transfer. Thus, Rule 25(c) is inapposite. 

1 I also have authority to consider requiredjoinder of patties sua sponte. See, e.g., Republic of 

Philippines v. Pimentel, 553 U.S. 851, 861 (2008) (citations omitted); CP Nat. Corp. v. 

Bonneville Power Admin., 928 F.2d 905, 911 (9th Cir. 1991) (citations omitted). 

OPINION AND ORDER-PAGE 4 

Case 3:15-cv-02075-PK Document 18 Filed 01/22/16 Page 4 of 7
Moreover, Rule l 7(a) may be inapposite as well. That rule provides that an action must 

be prosecuted in the name of the real party in interest. Fed. R. Civ. P. l 7(a) (emphasis added). 

However, in this case, Wilmington Trust is attempting to use Rule l 7(a) to justify its substitution 

as a defendant in this action. Although neither the Ninth Circuit nor this court has squarely 

addressed the issue, many courts have concluded that "Rule l 7(a) is limited to plaintiffs." Real 

Party in Interest, Capacity, and Standing Compared, 6A Fed. Prac. & Proc. Civ. § 1542 n.3 (3d 

ed.) (citing cases); accordJackson v. Rowlett, No. S-05-2498 MCE GGHP, 2007 WL 840298, at 

*I (E.D. Cal. Mar. 16, 2007); Gardetto v. }1fason, 854 F. Supp. 1520, 1544 (D. Wyo. 1994) 

("Thus, the rule, by its own terms, only applies to plaintiffs since that is the party who is 

'prosecuting the action.'"); Smith v. Janey, 664 F. Supp. 2d I, 8 n.3 (D.D.C. 2009) ("Fed. R. Civ. 

P. l 7(a)(3) applies only to prosecuting in the name of the real party in interest, and has nothing to 

do with failing to identify the appropriate defendant."); but see BP Oil, Inc. v. Bethlehem Steel 

Corp., 536 F. Supp. 293, 295 (E.D. Pa.1982). However, in light of my finding that substitution 

under Rule 25( c) is inappropriate because the transfer preceded this litigation and my finding 

regarding requiredjoinder, see infi·a, I need not decide whether Rule 17(a) can be used to support 

substitution of a defendant or whether it is limited to plaintiffs. 

II. Required Joinder of Parties 

Although substitution of Wilmington Trust is not wananted under Rule 25( c ), I find that 

Wilmington Trust must be joined as a necessary party under Rule 19(a). As stated above, Rule 

19(a) sets f01ih a two-pronged inquiry to determine whether a person is a necessary paiiy. 

First, the court must dete1mine whether complete relief can be afforded if the 

action is limited to the existing pmiies. [Confederated Tribes of Chehalis Indian 

Reservation v. Liljan, 928 F.2d 1496, 1498 (9th Cir.1991)]; Fed. R. Civ. P. 

19(a)(l)(A). Second, the court must determine whether the absent party has a 

"legally protected interest" in the subject of the action and, if so, whether the 

party's absence will "impair or impede" the party's ability to protect that interest 

OPINION AND ORDER-PAGE 5 

Case 3:15-cv-02075-PK Document 18 Filed 01/22/16 Page 5 of 7
or will leave an existing party subject to multiple, inconsistent legal obligations 

with respect to that interest. Id. If the answer to either of those questions is 

affirmative, then the party is necessary and "must be joined." Fed. R. Civ. P. 

19(a)(l). 

White v. Univ. of California, 765 F.3d 1010, 1026 (9th Cir. 2014). 

Wilmington Trust satisfies both prongs of the Rule 19(a) inquiry. First, complete relief 

cannot be afforded in its absence. Schwartz seeks a declaratory judgment rescinding the DOT 

and an injunction barring Defendants from enforcing the tenns thereof. See Comp!. 6-9. As 

stated above, Wilmington Trust alleges it is the assignee and sole beneficiary of the DOT and the 

cunent owner of the Loan. Thus, the declaratory and injunctive relief sought by Schwmiz could 

be incomplete unless Wilmington Trust is bound by res judicata. See E.E. 0. C. v. Peabody W. 

Coal Co., 400 F.3d 774, 780 (9th Cir. 2005); Wright v. Incline Vil!. Gen. Imp. Dist., 597 F. Supp. 

2d 1191, 1206 (D. Nev. 2009) ("[W]here a plaintiff seeks injunctive or declaratory relief and a 

third-pmiy has an enforceable interest in the subject matter of the dispute, the couti cannot grant 

complete relief in the third pmiy's absence."). If Schwmiz succeeds in this suit without 

Wilmington Trust as a paiiy, Wilmington Trust would not be precluded from enforcing the terms 

of the DOT. Complete relief therefore cannot be afforded in Wilmington .Trust's absence. See 

Peabody, 400 F.3d at 780; Wright, 597 F. Supp. 2d at 1206. 

Moreover, Wilmington Trust claims a legally protected interest in the DOT, and its 

ability to protect that interest will be impaired or impeded if it is not joined as a party in this 

action.2 Because Wilmington Trust alleges it is the assignee and sole beneficiary of the DOT 

2 At this stage of the proceedings, I need not decide whether the transfer of the DOT from 

Christiana Trust 4 to Wilmington Trnst was valid and created a legitimate interest on the part of 

Wilmington Trust. Rule 19 protects "a pmiy's right to be heard and to pmiicipate in adjudication 

of a claimed interest, even if the dispute is ultimately resolved to the detriment of that party." 

Shermoen v. United States, 982 F.2d 1312, 1317 (9th Cir.1992). "Indeed, the language of [Rule 

OPINION AND ORDER-PAGE 6 

Case 3:15-cv-02075-PK Document 18 Filed 01/22/16 Page 6 of 7
and the current owner of the Loan, it must be joined as a codefendant so that it can protect its 

interests. 

In sum, Wilmington Trust is a necessary party under Rule 19(a), and it is therefore joined 

as a codefendant in this action. 

CONCLUSION 

For the reasons provided above, Wilmington Trust's Motion to Substitute (#10) is granted 

in part and denied in part. Wilmington Trust's request to substitute Christiana Trust 3 as a 

defendant is denied. Wilmington Trust's alternative request to join in this action as a necessary 

party is granted. 

Dated this 22nd day of January, 2016. 

/s/~_..,,.,_,=-~--+--11----"' 

Honorable Pau!Papak 

United States Magistrate Judge 

19(a)] contemplates that a party need only have a 'claim' to an interest." White, 765 F.3d at 

1026-27 (quoting Fed. R. Civ. P. 19(a)(2)). 

OPINION AND ORDER-PAGE 7 

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