Court Opinion

ID: 4561299
Source: CourtListenerOpinion
Date Created: 2020-08-28 18:01:33.278831+00
Date Added: 2024-06-11T11:22:09.040859
License: Public Domain

Case: 20-10381     Document: 00515544143        Page: 1   Date Filed: 08/28/2020

        United States Court of Appeals
             for the Fifth Circuit
                                                                    United States Court of Appeals
                                                                             Fifth Circuit

                                                                           FILED
                                                                     August 28, 2020
                               No. 20-10381                           Lyle W. Cayce
                             Summary Calendar                              Clerk

 Christiana Trust, a Division of Wilmington Savings
 Fund Society, FSB, as Trustee,

                                                                  Plaintiff,

                                    versus

 Duane Riddle, as next friend of Mary Sue Riddle,

                                 Defendant-Third Party Plaintiff—Appellant,

                                    versus

 U.S. Bank National Association as Legal Title Trustee
 for Truman 2016 SC6 Title Trust,

                                                       Intervenor—Appellee.

                 Appeal from the United States District Court
                     for the Northern District of Texas
                           USDC No. 6:16-CV-59
Case: 20-10381        Document: 00515544143              Page: 2      Date Filed: 08/28/2020

                                       No. 20-10381

 Before King, Smith, and Oldham, Circuit Judges.
 Per Curiam:*
         Mary Sue Riddle defaulted on a home-equity loan, and Christiana
 Trust—the holder of that loan—sued her in federal court in an attempt to
 foreclose on Riddle’s property. Riddle filed various counterclaims against
 Christiana Trust, including a state-law claim seeking to quiet title. Christiana
 Trust moved the district court for summary judgment regarding Riddle’s
 counterclaims.
         The district court granted that motion. Because Riddle was required
 to “show her superiority of title as opposed to any weakness in Christiana
 Trust’s title,” the district court concluded that Riddle’s failure to “tender[]
 the full amount owed” on the loan was “fatal to her [quiet-title] claim.” The
 district court accordingly held that there was “no impediment to Christiana
 Trust’s request to proceed with foreclosure,” and it therefore ordered
 Christiana Trust to “move for judgment as a matter of law as to” its
 foreclosure claim. 1
         Christiana Trust did not, however, file such a motion. Instead, it
 informed the district court that Riddle’s loan had been assigned to U.S. Bank
 while the case was pending. U.S. Bank then filed a motion to intervene, which
 the district court granted. U.S. Bank also filed a motion for summary
 judgment regarding its foreclosure claim. The district court granted that
 motion, because “[t]he Deed of Trust clearly gives a power of sale to U.S.
 Bank” and “Riddle fail[ed] to . . . present[] affirmative evidence that would

         *
          Pursuant to 5th Circuit Rule 47.5, the court has determined that this
 opinion should not be published and is not precedent except under the limited
 circumstances set forth in 5th Circuit Rule 47.5.4.
         1
           The district court believed that such a motion was necessary, because Christiana
 Trust’s motion for summary judgment “addressed the claims Riddle had asserted” but
 “failed to request summary judgment in its favor.”

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Case: 20-10381      Document: 00515544143          Page: 3     Date Filed: 08/28/2020

                                   No. 20-10381

 call into question U.S. Bank’s right to judicially foreclose on the subject
 property.”
        On appeal, Riddle does not challenge the district court’s summary-
 judgment reasoning. Instead, Riddle argues that the district court erred by
 allowing U.S. Bank to intervene. This is so, according to Riddle, because U.S.
 Bank’s motion to intervene was not timely, and because there was “nothing
 for U.S. Bank to intervene in” since this case became moot when Christiana
 Trust assigned the loan.
        But the assignment of Riddle’s loan did not, in fact, render this case
 moot, because a live controversy—albeit between different parties—
 persisted. Fed. R. Civ P. 25(c) (“[I]f an 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.”); In re Covington Grain Co., Inc., 638 F.2d 1362, 1364 (5th Cir. Unit
 B Mar. 1981) (“Rule 25(c) . . . is designed to allow the action to continue
 unabated when an interest in the lawsuit changes hands.”); see In re Tex. Gen.,
 No. 93-2399, 1994 WL 24886, at *1 (5th Cir. Jan. 12, 1994) (unpublished but
 precedential) (concluding that it was erroneous to dismiss a claim for lack of
 standing due to a transfer of interest that occurred while litigation was
 pending); see also Freeport-McMoRan, Inc. v. K N Energy, Inc., 498 U.S. 426,
 428 (1991) (“A contrary rule could well have the effect of deterring normal
 business transactions during the pendency of what might be lengthy
 litigation.”).
        Further, under Rule 25(c), U.S. Bank could have obtained a favorable
 judgment in this case without becoming a party; that is, Christiana Trust
 could have litigated this case to final judgment, which U.S. Bank would have
 been entitled to enforce. See FDIC v. SLE, Inc., 722 F.3d 264, 270 (5th Cir.
 2013) (successor in interest “was not required under Rules 25(c) and (a)(3)

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Case: 20-10381      Document: 00515544143         Page: 4    Date Filed: 08/28/2020

                                  No. 20-10381

 to substitute as a transferee of the FDIC” to have standing to enforce a
 judgment); TOC Retail, Inc. v. Gulf Coast Oil Co. of Miss., No. 97-30969, 1999
 WL 197149, at *12 (5th Cir. Mar. 25, 1999) (unpublished) (denying a motion
 for substitution of a party on appeal when there was a dispute about whether
 a transfer of interest had occurred, because under Rule 25(c), “[t]he
 judgment of the district court . . . can be enforced by the parties’ successors
 to the extent appropriate under the terms of the various contracts”); 6A
 Charles A. Wright et al., Federal Practice and Procedure § 1958 (3d ed. 2020)
 (“The most significant feature of Rule 25(c) is that it does not require that
 anything be done after an interest has been transferred. The action may be
 continued by or against the original party, and the judgment will be binding
 on the successor in interest even though the successor is not named.”).
 Consequently, if the district court erred by allowing U.S. Bank to intervene,
 that error was harmless.
        We therefore AFFIRM the judgment of the district court.

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