Christiana Trust, A Division v. Mary Riddle ( 2020 )

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opinion should not be published and is not precedent except under the limited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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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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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.
4