Opinion ID: 15644
Heading Depth: 3
Heading Rank: 1

Heading: State Law Arguments

Text: Appellants claim that under Texas law “although a lienholder who is not made a party is not bound by the judgment rendered, the judgment is valid and operative as against those who were actually made parties.” Thus appellants argue that the tax suit judgment was valid as to Metroplex, the owner of the Property, and the tax sale conveyed such interest as Metroplex possessed. Appellants also assert that because the FDIC was not made a party to the tax suit, it is not bound by the judgment and, consequently, no action taken pursuant to the tax suit judgment had the effect of 8 disturbing the FDIC’s lien interest. Thus, appellants claim that the tax suit judgment was dispositive of Metroplex’s interest in the Property, which was conveyed to them pursuant to the tax sale, but that because the FDIC was not party to the tax suit, the judgment did not affect its lien interest, and, accordingly, that they took the Property subject to the FDIC’s lien, just as if Metroplex had conveyed it to them subject to the lien. FSB disputes appellants’ interpretation of the applicable Texas law, claiming that the FDIC was a “necessary party” to the tax suit and, therefore, that failure to join the FDIC renders the judgment entered pursuant to the tax suit void in its entirety. According to FSB, the Texas rule is that “as between the tax sale purchaser and the interested person who was not made a party to the tax suit, the tax sale purchaser’s interest is void.” Accordingly, FSB contends that appellants’ interest in the Property is necessarily void.