Appellate Circuit

There’s No Riddle, Just a Premeditated Guess Which Contradicts

This court makes a confident Erie guess that the Texas Supreme Court would have concluded that explicit substitution was not required.

LIT COMMENTARY

In this latest case, FFGGP v SLS, we roll back to the Riddle case(s) first,  where the lower court issued a show order cause based on the arguments raised on a request to intervene by the bank, which were repeated, and repeated again by the foreclosure mill lawyers for US Bank, who argued that the mortgage servicer lacked any interest in the mortgage and could not even collect payments.

However, this would be another whiteout series of orders and opinions, resulting in another erie guess by the 5th Circuit – which defies their own interpretation of Riddle in an earlier appeal, wherein they specifically told her she could not sue the bank for the mortgage servicers duties.

Secondly, in FFGGP v SLS, the judiciary has grasped onto Federal Rule of Civil Procedure 25(c), which is all about DEATH (estate, probate and control of assets after death). Unfortunately, there is one sentence, which does not state the word “DEATH” and that has been latched onto, to invoke this sub-rule as a reason to wordsmith opinions and repel 200 plus years of contract property laws. LIT strongly suggests this was not the meaning and interpretation that was intended in this rule. We have transcribed FRCP 25 in this article, but if  you look at the headings a-d, they are labeled; (a) DEATH, (b) INCOMPETENCY, (c) TRANSFER OF INTEREST and (d) PUBLIC OFFICERS; DEATH OR SEPARATION FROM OFFICE.

Yep, this firmly looks like probate laws to us, and not real estate contract law, but that doesn’t stop the Outlaws from manipulating opinions with their poisoned pens.

This case is a corrupt contradiction and we detail it below.

FFGGP, Inc. v. Specialized Loan Servicing, L.L.C.,

No. 20-10378 (5th Cir. Dec. 17, 2020)

REPUBLISHED BY LIT: JAN 20, 2022

 “Based on the lack of a Texas Supreme Court decision precisely resolving the issue, deference to Texas appellate caselaw, and consideration of this court’s decisions interpreting Rule 25(c)’s policies, this court makes “a confident Erie guess” that the Texas Supreme Court would have concluded that explicit substitution of SLS as plaintiff in the Foreclosure Action was not required and that subject matter jurisdiction was present throughout the lawsuit.

Thus, there is no genuine issue of material fact that the Foreclosure Order was validly issued by the state court and validly enforced by SLS through the Foreclosure Sale as Bank of America’s lawful assignee on the Note.”

Before Owen, Chief Judge, and King and Engelhardt, Circuit Judges. Per Curiam:*

Plaintiff FFGGP, Incorporated (“FFGGP”) appeals the district court’s grant of summary judgment in favor of Defendant Specialized Loan Servicing, L.L.C. (“SLS”).

We affirm.

OWEN, PRISCILLA R.

Judge Priscilla Richman Owen

was born October 4, 1954 (Libra)

Age: 65

KING, CAROLYN DINEEN, (MRS. REAVLEY)

Judge Carolyn Dineen King

was born January 30, 1938 (Aquarius)

Age: 82

ENGELHARDT, KURT E.

Judge Kurt Damian Engelhardt

was born April 21, 1960 (Taurus)

Age: 60

I.

Roger D. Freeman executed a Home Equity Note and Deed of Trust (collectively “the Note”) in favor of American Southwest Mortgage Corp., granting a lien (“Home Equity Lien”) on a piece of real estate in Grand Prairie, Texas (“Property”).

The Note subsequently was assigned to Bank of America.

After Freeman passed away, his estate (“Freeman’s Estate”) failed to remit monthly mortgage payments due under the Note, and Bank of America sent Freeman’s Estate a Notice of Default and Intent to Accelerate.

A second lien was filed against the Property by Fairway Park Homeowners Association, Inc. (“HOA”) after Freeman’s Estate failed to pay assessment dues (“HOA Assessment Lien”). Pursuant to the HOA Declarations and Covenants, the HOA Assessment Lien was subordinate to any mortgage lien on the Property.

FFGGP alleges that it acquired the Property under the HOA Assessment Lien Deed.

Bank of America sent Freeman’s Estate a Notice of Acceleration after it continued to neglect mortgage payments.

Thereafter, Bank of America, along with its unnamed “successors and assigns,” filed a Petition Seeking a Judicial Judgment for Foreclosure (“Foreclosure Action”) against Freeman’s Estate in the 96th Judicial District Court of Tarrant County (“96th JDC”).

While the Foreclosure Action was pending, Bank of America assigned the Note to SLS.

The state court entered a default judgment in favor of Bank of America, “or its successors or assigns in interest,” ordering enforcement of the Home Equity Lien through a Foreclosure Sale (“Foreclosure Order”).

Subsequently, SLS sent Freeman’s Estate a second Notice of Acceleration and a Notice of Foreclosure Sale.

FFGGP then filed a separate lawsuit for declaratory relief and to quiet title against SLS in the 96th JDC to collaterally attack the default judgment from the Foreclosure Action.

SLS removed the case to the Northern District of Texas based on diversity jurisdiction. Shortly after removal, SLS foreclosed on the Home Equity Lien at a Foreclosure Sale.

Through its amended pleadings, FFGGP sought a declaration that the state court issued the Foreclosure Order without subject matter jurisdiction and that the subsequent Foreclosure Sale was void.

SLS moved for summary judgment, arguing that it enforced a valid Foreclosure Order through the Foreclosure Sale as Bank of America’s assignee on the Note.

FFGGP responded with a cross-motion for summary judgment, arguing that the failure to explicitly substitute SLS as Bank of America’s assignee during the pending Foreclosure Action divested the state court of subject matter jurisdiction to issue the Foreclosure Order, thus rendering the Foreclosure Sale void.

The district court rejected FFGGP’s argument and granted summary judgment in favor of SLS.

On appeal, FFGGP argues that there is no genuine issue of material fact that the state court was divested of subject matter jurisdiction over the pending Foreclosure Action when SLS was not explicitly substituted as plaintiff in Bank of America’s place, thus rendering the Foreclosure Order and Sale void.

In response, SLS contends that the state court never lost subject matter jurisdiction over the Foreclosure Action because SLS—Bank of America’s assignee on the Note—was implicitly named as a plaintiff in the state court petition and as a party entitled to enforce the Foreclosure Order in the default judgment.

II.

We review the motion for summary judgment de novo, and we apply the same standard as the district court, viewing the evidence in the light most favorable to the nonmovant.

First Am. Title Ins. Co. v. Continental Cas. Co., 709 F.3d 1170, 1173 (5th Cir. 2013).

Summary judgment is appropriate where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a).

Courts do not disfavor summary judgment, but, rather, look upon it as an important process through which parties can obtain a “just, speedy and inexpensive determination of every action.”

Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986).

A party asserting that there is no genuine dispute as to any material fact must support its assertion by citing to particular parts of materials in the record.

FED. R. CIV. P. 56(c)(1)(A).

III.

FFGGP acknowledges that Bank of America was the proper plaintiff to initiate the Foreclosure Action and that SLS was Bank of America’s lawful assignee on the Note.

The state court record confirms that SLS was always implicitly part of the Foreclosure Action, because Bank of America’s “assigns” and “successors in interest” were named as plaintiffs in the petition and listed as parties entitled to enforce the Foreclosure Order in the default judgment.

FFGGP contends that implicit references to SLS were insufficient for the state court to maintain subject matter jurisdiction and that Texas law required SLS to be explicitly substituted in Bank of America’s place upon assignment of the Note.

“When reviewing issues of state law, federal courts look to the law of that state’s highest court.”

City of Alexandria v. Brown, 740 F.3d 339, 351 (5th Cir. 2014).

Absent a final decision by the Texas Supreme Court that “precisely resolves the legal issue, we must make an Erie guess and determine as best we can what the Supreme Court of Texas would decide.”

Martinez v. Walgreen Co., 935 F.3d 396, 398 (5th Cir. 2019) (citation omitted).

When compelled to make an Erie guess, federal courts “defer to intermediate state appellate court decisions, unless convinced by other persuasive data that the highest court of the state would decide otherwise.”

Mem’l Hermann Healthcare Sys. Inc. v. Eurocopter Deutschland, GMBH, 524 F.3d 676, 678 (5th Cir. 2008) (citations omitted).

Federal courts not only look to intermediate state appellate decisions, but also to “the general rule on the issue, decisions from other jurisdictions, and general policy concerns.”

Martinez, 935 F.3d at 398 (citations omitted).

Although the Texas Supreme Court has not directly addressed the issue, Texas appellate caselaw is clear that where a plaintiff assigns its interest in a pending lawsuit to another, the assignment does not alter the parties’ rights to the prejudice of the defendant, the lawsuit may be continued in the name of the original plaintiff, substitution of the assignee is not mandatory, and the court has the discretion to allow a motion to substitute.

Int’l Shelters, Inc. v. Pinehurst Inv. Corp., 474 S.W.2d 497, 499-500 (Tex. Civ. App. 1971), writ dismissed (Mar. 22, 1972);

Mitchell, Gartner & Thompson v. Young, 135 S.W.2d 308 (Tex. Civ. App. 1939), writ refused;

Paxton v. First State Bank of Tatum, 42 S.W.2d 837, 839 (Tex. Civ. App. 1931);

Ferguson- McKinney Dry Goods Co. v. Garrett, 252 S.W. 738, 741 (Tex. Comm’n App. 1923);

Lee v. Salinas, 15 Tex. 495, 498 (1855).

Texas appellate caselaw comports with Federal Rule of Civil Procedure 25(c), which provides that “[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.”

Several cases from this court illustrate the policy of Rule 25(c) that the original interest holder has standing to litigate a lawsuit to final judgment and that an assignee may enforce that judgment.

Christiana Tr. v. Riddle as next friend of Riddle, 819 F. App’x 255, 256 (5th Cir. 2020) (per curiam)

(plaintiff’s assignment of home equity loan to a bank while a foreclosure lawsuit was pending did not render the case moot, because “a live controversy—albeit between different parties—persisted”);

FDIC v. SLE, Inc., 722 F.3d 264, 270 (5th Cir. 2013) (“in light of Rule 25’s wholly permissive terms,” a successor in interest “was not required under Rules 25(c) and (a)(3) to substitute as a transferee” to have standing to enforce a judgment);

Matter of Texas Gen., No. 93-2399, 1994 WL 24886, at *1 (5th Cir. Jan. 12, 1994)

(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);

Matter of Covington Grain Co., Inc., 638 F.2d 1362, 1364 (5th Cir. 1981)

(“Rule 25(c) . . . is designed to allow the action to continue unabated when an interest in the lawsuit changes hands.”).

Robins v. PHH Mortg. Corp., CIVIL ACTION No. 4:20-CV-1163, at *6 (S.D. Tex. Sep. 18, 2020)

(“The Fifth Circuit has explained that “the text [of RESPA and Regulation X] squarely settles the issue” that both the act and the regulation “impose[] duties only on servicers.”

Christiana Tr. v. Riddle, 911 F.3d 799, 804 (5th Cir. 2018).

The precedent is clear.

Robins’ claims under RESPA and Regulation X against Deutsche Bank, her mortgagee, must fail as a matter of law.”)

– Judge Andrew Hanen, SDTX

FFGGP cites two Texas appellate court decisions in support of its argument that a mid-suit assignment of interest divests a court of subject matter jurisdiction absent explicit substitution of the assignee.

Kingman Holdings, LLC v. Mortg. Elec. Registration Sys., Inc., 2016 WL 8115937 (Tex. App. Oct. 27, 2016);

Mortg. Elec. Registration Sys., Inc. v. Disanti, 2011 WL 255815 (Tex. App. Jan. 27, 2011).

However, neither case addressed a mid-suit assignment of interest, as both cases involved lawsuits filed after the assignment occurred and a lack of subject matter jurisdiction at the commencement of the lawsuit.

Kingman Holdings, 2016 WL 8115937, at *5– 7; Mortg. Elec. Registration Sys., 2011 WL 255815, at *2.

The present case is distinguishable, because it is undisputed that subject matter jurisdiction was present when Bank of America filed the Foreclosure Action.

FFGGP also cites a case where a Texas appellate court held that an employee allegedly injured on the job did not have a right to substitute himself as the real party in interest in a workers’ compensation insurer’s action after the action had already been dismissed and that his substitution was required to occur before disposition of the action.

Rodriguez v. Crutchfield, 301 S.W.3d 772, 775 (Tex. App. 2009).

However, unlike the present matter, Rodriguez did not involve a mid-suit assignment of a single interest, because the workers’ compensation insurer asserted its own claim for subrogation, and the employee attempted to assert his own claim for damages. Id. at 776.

Based on the lack of a Texas Supreme Court decision precisely resolving the issue, deference to Texas appellate caselaw, and consideration of this court’s decisions interpreting Rule 25(c)’s policies, this court makes a confident Erie guess that the Texas Supreme Court would have concluded that explicit substitution of SLS as plaintiff in the Foreclosure Action was not required and that subject matter jurisdiction was present throughout the lawsuit.

Thus, there is no genuine issue of material fact that the Foreclosure Order was validly issued by the state court and validly enforced by SLS through the Foreclosure Sale as Bank of America’s lawful assignee on the Note.

IV.

For the foregoing reasons, the judgment is AFFIRMED.

Christiana Tr. v. Riddle,

No. 20-10381 (5th Cir. Aug. 28, 2020)

REPUBLISHED BY LIT: JAN 20, 2022

PER CURIAM

Summary Calendar Appeal from the United States District Court for the Northern District of Texas
USDC No. 6:16-CV-59

Before KING, SMITH, and OLDHAM, Circuit Judges. PER CURIAM:

KING, CAROLYN DINEEN, (MRS. REAVLEY)

Judge Carolyn Dineen King

was born January 30, 1938 (Aquarius)

Age: 82

SMITH, JERRY E.

Judge Jerry Edwin Smith

was born November 7, 1946 (Scorpio)

Age: 73

OLDHAM, ANDREW “ANDY” S.

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.

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.” ——–

Johnson v. Ocwen Loan Servicing, L.L.C., 916 F.3d 505, 507 n.1 (5th Cir. 2019)

(“Johnson does not make any allegations about Wells Fargo’s conduct, but seeks to hold it vicariously liable under RESPA for Ocwen’s activities. We recently held that the RESPA’s duties at issue here do not impose vicarious liability. Christiana Trust v. Riddle , 911 F.3d 799, 804–05 (5th Cir. 2018).”)

– Judge Gregg Costa, CA5

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 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) 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.

Fed. R. Civ. P. 25

Current through P.L. 117-80 (published on www.congress.gov on 12/27/2021), except for [P. L. 117-58]

Rule 25 – Substitution of Parties

(a) DEATH.

(1)Substitution if the Claim Is Not Extinguished. If a party dies and the claim is not extinguished, the court may order substitution of the proper party. A motion for substitution may be made by any party or by the decedent’s successor or representative. If the motion is not made within 90 days after service of a statement noting the death, the action by or against the decedent must be dismissed.

(2)Continuation Among the Remaining Parties. After a party’s death, if the right sought to be enforced survives only to or against the remaining parties, the action does not abate, but proceeds in favor of or against the remaining parties. The death should be noted on the record.

(3)Service. A motion to substitute, together with a notice of hearing, must be served on the parties as provided in Rule 5 and on nonparties as provided in Rule 4. A statement noting death must be served in the same manner. Service may be made in any judicial district.

(b) INCOMPETENCY. If a party becomes incompetent, the court may, on motion, permit the action to be continued by or against the party’s representative. The motion must be served as provided in Rule 25(a)(3).

(c) TRANSFER OF INTEREST. If 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. The motion must be served as provided in Rule 25(a)(3).

(d) PUBLIC OFFICERS; DEATH OR SEPARATION FROM OFFICE. An action does not abate when a public officer who is a party in an official capacity dies, resigns, or otherwise ceases to hold office while the action is pending. The officer’s successor is automatically substituted as a party.

Later proceedings should be in the substituted party’s name, but any misnomer not affecting the parties’ substantial rights must be disregarded. The court may order substitution at any time, but the absence of such an order does not affect the substitution.

U.S. BANK NATIONAL ASSOCIATION AS LEGAL TITLE TRUSTEE FOR TRUMAN 2016 SC6 TITLE TRUST’S MOTION TO INTERVENE

NOV 14, 2019

COMES NOW, U.S. Bank National Association as Legal Title Trustee for Truman 2016 SC6 Title Trust (“U.S. Bank” or “Intervenor”), files this Motion to Intervene.1 In support thereof, U.S. Bank respectfully shows the Court the following:

I. INTRODUCTION

1. Plaintiff/Counter-Defendant Christiana Trust, a Division of Wilmington Savings Fund Society, FSB, as Trustee of ARLP Trust 5, (“Christiana Trust”) filed suit against Mary Sue Riddle (“Riddle”) seeking judicial foreclosure of mortgaged real property for failure to make payments on the relevant Note.2 Christiana Trust is the prior noteholder and assignee of the Deed of Trust at issue in this matter.

2. On October 23, 2019, this Court granted a Motion for Summary Judgment filed by Christiana Trust and Servis One, Inc. d/b/a BSI Financial Services (“BSI”), who was the former servicer on behalf of the Christiana Trust.

3. Concurrently with granting the Motion for Summary Judgment, the Court ordered Christiana Trust to move for judgment as a matter of law as to its judicial foreclosure claim on the subject real property, located at 1973 Beaty Road, San Angelo, Texas 76904 (the “Property”).3

4. Intervention is proper as a matter of right because U.S. Bank is the current noteholder and assignee of the Deed of Trust relating to the real property at issue in this lawsuit.

5. U.S. Bank as mortgagee of record, hereby seeks to intervene in this lawsuit, adopt the claims for judicial foreclosure asserted by Christiana Trust in its Amended Complaint,4 and seek a judicial order of foreclosure and eviction.

6. Consequently, U.S. Bank, as the noteholder and assignee of the Deed of Trust, is filing its Motion for Leave to file a Motion for Summary Judgment seeking a judicial order of foreclosure, contemporaneously with this Motion to Intervene.

1 Concurrently with the filing of this Motion, U.S. Bank also files a Motion for Leave to file a Motion for Summary Judgment as to judicial foreclosure of the Property.

2 ECF (Doc. 18), Christiana Trust’s First Am. Compl.

3 ECF (Doc. 102), Order (“[T]here now being no impediment to Plaintiff’s request for judicial foreclosure, the Court hereby orders that Christiana Trust move for judgment as a matter of law as to said claim by no later than October 31, 2019.”)

4 ECF (Doc. 18), Plaintiff’s First Amended Complaint.

II. MOTION TO INTERVENE

7. Federal Rule of Civil Procedure 24(a)(2) provides that a district court should permit intervention on timely application by anyone who “claims an interest relating to the property or transaction that is the subject of the action,” and whose interest may be “impair[ed] or impede[d]”

by disposition of the action.5 Rule 24(b)(1)(B) allows a court the discretion to permit anyone to intervene who “has a claim or defense that shares with the main action a common question of law or fact.”6 An intervenor should be permitted to intervene if the intervenor:

(1) timely files the motion to intervene;

(2) has an interest in the pending lawsuit;

(3) has an interest that could be impaired or impeded by the case;

and

(4) has an interest that is not adequately represented by the existing parties.7

Regardless though, Rule 24 is broadly construed in favor of intervention.8

8. The Court should allow U.S. Bank to intervene in this case for the following reasons:

(1) U.S. Bank moves for intervention to comply with this Court’s Order to move for judicial foreclosure on the Property;

(2) U.S. Bank, as mortgagee of record, has an interest in the pending lawsuit;

(3) said interest could be impaired or impeded by the disposition of this case;

and,

(4) the current Plaintiff, Christiana Trust, cannot adequately represent U.S. Bank’s interest in the loan property.

5 Fed. R. Civ. P. 24(a)(2).

6 Fed. R. Civ. P. 24(b)(1)(B).

7 See League of United Latin Am. Citizens v. City of Boerne, 659 F.3d 421, 433 (5th Cir. 2011); Benjamin v. Department of Pub. Welfare, 701 F.3d 938, 948 (3d Cir. 2012).

8 See U.S. v. City of L.A., 288 F.3d. 391, 397-98 (9th Cir. 2002); see also Doe #1 v. Glickman, 256 F.3d 371, 375 (5th Cir. 2001) (intervention should be allowed when no one would be hurt and greater justice can be obtained).

9 See In re Efron, 746 F.3d 30, 35 (1st Cir. 2014).

A. U.S. Bank moves to intervene in accordance with this Court’s October 23, 2019, Order.

9. There is no bright-line rule about how quickly an applicant must move to intervene.

Instead, when considering a motion to intervene, a court should consider how diligently the applicant acted once it received actual or constructive notice of the impending threat.9

In determining whether intervention is timely, courts look at factors such as

(1) the point to which the suit has progressed;

(2) the purpose for which intervention is sought;

(3) the length of time preceding the application during which the proposed intervenors knew or should have known of their interest in the case;

(4) the prejudice to the original parties due to the proposed intervenors’ failure to promptly intervene after they knew or reasonably should have known of their interest in the case;

and

(5) the existence of unusual circumstances militating against or in favor of intervention.10

10. Here, there is no doubt Intervenor’s motion is timely.

On or about October 23, 2019, the Court granted summary judgment, dismissed Riddle’s counterclaims and third-party claims in their entirety, and ordered Christiana Trust to move for judgment allowing judicial foreclosure on the Property.11

Christiana Trust, however, is the only named party at this time, and has no interest in the loan because it is neither the mortgagee nor the current servicer.

Accordingly, in order for the parties to proceed on the path discussed in the October 23, 2019, order, it is necessary for U.S. Bank to intervene as the proper party to assert the claim for judicial foreclosure.

11. As set forth in U.S. Bank’s Motion for Summary Judgment being filed herewith, the last assignee of record of the Deed of Trust is, and remains, U.S. Bank through a chain of duly-recorded assignments.12

Consequently, given the Court’s order to move for judicial foreclosure by November 14, 2019 at 3:00 p.m., this intervention by U.S. Bank is timely so that the proper party in interest may now request judgment as a matter of law allowing judicial foreclosure on the Property.

12. U.S. Bank seeks to intervene so that it may adopt Christiana Trust’s claim against Riddle for judicial foreclosure.

There is no prejudice to Riddle or any other parties herein because the Court has already granted summary judgment dismissing Riddle’s claims in their entirety and because U.S. Bank is not asserting any new claims not already fully briefed and adopted herein.

10 Jansen v. City of Cincinnati, 904 F.2d 336, 340 (6th Cir. 1990); see also league of United Latin Am. Citizens v. City of Boerne, 659 F.3d 421, 433 (5th Cir. 2011).

11 See ECF (Doc. 101), Order Granting Summary Judgment, and ECF (Doc. 102), Order instructing Christiana Trust to move for judgment as a matter of law on its judicial foreclosure claim. Both Orders were entered by this Court on October 23, 2019.

12 See Ex. A of Motion for Summary Judgment, filed contemporaneously herewith (Assignment No. 1 and Assignment No. 2).

Texas attorney Frank Catalano claims to have left McGlinchey in 2015,  but the signature on the motion to intervene below defies that lyin’ resume. LIT never receives a response to the above tweet.

As such, Riddle’s defense to U.S. Bank’s adoption and assertion of Christiana Trust’s judicial foreclosure claim should not vary from the defenses she has already asserted to Christiana Trust’s First Amended Complaint and its arguments related thereto.

13. Because the Court expressly permitted the filing of summary judgment on the judicial foreclosure claim, and there is no risk of prejudice to the original parties, this Motion to Intervene is timely filed.

B. U.S. Bank has a substantial legal interest in the subject matter of this case and that interest could possibly be impaired if this matter proceeds without U.S. Bank’s involvement.

14. A party seeking to intervene must show it has an interest in the suit that is direct, substantial and legally protectable.13 The relevant inquiry is whether the applicant has a stake in the suit that goes beyond a generalized preference that the case turn out a certain way.14

15. In addition, the party seeking to intervene must show that its interest may be impaired by an unfavorable disposition of the case.15

Generally, the burden of establishing impairment of the interest is minimal.16

For example, an applicant may demonstrate potential impairment of its interest if, without its interest, the applicant’s interest may be impaired by the operation of res judicata, collateral estoppel, or stare decisis.17

16. Here, this lawsuit arises out of a Promissory Note (“Note”) secured by real property located at 1973 Beaty Road, San Angelo, Texas 76904-7747 (the “Property”).18

13 See Brumfield v. Dodd, 749 F.3d 339, 343 (5th Cir. 2014); Loyd v. Alabama Dept. of Corr., 176 F.3d 1336, 1340 (11th Cir. 1999); U.S. v. Union Elec. Co., 64 F.3d 1152, 1161 (8th Cir. 1995); Pennsylvania v. President U.S. of Am., 888 F.3d 52, 57-58 (3d Cir. 2018).

14 See Texas v. U.S., 805 F.3d 653, 657 (5th Cir. 2015).

15 See Pennsylvania, 888 F.3d at 59; see also WildEarth Guardians v. Nat’l Park Serv., 604 F.3d 1192, 1199 (10th Cir. 2010); Michigan State AFL-CIO v. Miller, 103 F.3d 1240, 1247 (6th Cir. 1997).

16 See id.; see also U.S. v. Texas E. Transmission Corp., 923 F.2d 410, 413 (5th Cir. 1991).

17 See United States v. Union Elec. Co., 64 F.3d 1152, 1161 (8th Cir. 1995).

18 See Ex. A of Motion for Summary Judgment, filed contemporaneously herewith (Promissory Note).

On December 6, 2006, Riddle executed a Note and Homestead Lien Contract and Deed of Trust (“Deed of Trust”) in favor of Bank of America, N.A. (“BANA”).19

Plaintiff’s Loan was secured by Deed of Trust encumbering the Property.

The Deed of Trust provided that the Loan would become due and payable and the borrower would be in default, if, among other things: “Borrower fails to make any payment when due under the Indebtedness.”20

Through a chain of duly-recorded assignments, the last assignee of record of the Deed of Trust is U.S. Bank.21

17. U.S. Bank’s interest in the subject matter of this lawsuit is simple:

U.S. Bank is the current mortgagee of record who has standing to foreclose on the Property. U.S. Bank’s interest is contractual and legal in nature:

(1) contractual inasmuch as Riddle signed a promissory note promising to make payments of principal, interest, insurance and taxes, which by virtue of an assignment U.S. Bank now holds;

and

(2) U.S. Bank has a legal interest in the Property since it is the current assignee of record with respect to the Deed of Trust creating a security interest against the Property and U.S. Bank now seeks to foreclose that lien.

18. For these reasons, U.S. Bank’s interest will be impaired by the outcome of this litigation should this Motion be denied.

C. Intervention in this case is necessary to protect U.S. Bank’s interest because Christiana Trust has no current interest in the Loan.

19. An intervenor is also required to show that its interest may not be adequately represented by the current parties in the case.22

19 See Ex. A of Motion for Summary Judgment, filed contemporaneously herewith (Promissory Note and Deed of Trust).

20 See Ex. A of Motion for Summary Judgment, filed contemporaneously herewith (Deed of Trust), p. 4.

21 See Ex. A of Motion for Summary Judgment, filed contemporaneously herewith (Assignment No. 1 and Assignment No. 2); Intervenor requests the Court take judicial notice of the Deed of Trust and Assignments as they were documents filed of record in the Real Property Records of Tom Green County, Texas, the authenticity of which cannot be readily controverted. See Funk v. Stryker Corp., 631 F.3d 777, 783 (5th Cir. 2011); see also Fed. R. Civ. P. 201(b).

22 See Trbovich v. United Mine Workers, 404 U.S. 528, 538 n.10 (1972); Wolfsen Land & Cattle Co. v. Pacific Coast Fed’n of Fishermen’s Ass’ns, 695 F.3d 1310, 1315-16 (Fed. Cir. 2012).

An intervenor may satisfy this requirement by showing that a present party will not make all of the applicant’s arguments because its interest in the suit is different from the applicant’s interest.23

A potential intervenor “need not prove that the [existing party’s] representation will in fact be inadequate, but only that it ‘may be’ inadequate.”24

Generally, the burden of establishing the inadequacy of representation is minimal.25

20. Here, the potential for inadequate representation is clear because Christiana Trust does not hold the note and is not the last assignee of record of the deed of trust.

Thus, Christiana Trust (and its prior servicer BSI) lack standing to foreclose.

On June 30, 2017, Christiana Trust (who had been assigned the Deed of Trust via prior Assignment) executed an Assignment of Deed of Trust in favor of U.S. Bank.26

In short, Christiana Trust no longer has any interest in the Note or Deed of Trust and is not authorized to collect mortgage payments or effect foreclosure.

Therefore, Christiana Trust has no real interest in the Loan or foreclosure as to the Property and accordingly may not adequately represent the interests of U.S. Bank in this lawsuit.

The fact that Christiana Trust and U.S. Bank have different legal interests with respect to the Loan and Property is sufficient to satisfy the low burden to demonstrate that Christiana Trust’s representation “may be inadequate.”27

23 See Wolfsen Land & Cattle Co., 695 F.3d at 1316; see also Forest Conservation Council v. United States Forest Serv., 66 F.3d 1489, 1498 (9th Cir. 1995).

24 Jordan v. Mich. Conference of Teamsters Welfare Fund, 207 F.3d 854, 863 (6th Cir. 2000).

25 See Tri-State Generation & Transmission Ass’n v. New Mexico Pub. Regulation Comm’n, 787 F.3d 1068, 1072 (10th Cir. 2015).

26 See Ex. A to Motion for Summary Judgment, filed herwith.

27 Jordan v. Mich. Conference of Teamsters Welfare Fund, 207 F.3d 854, 863 (6th Cir. 2000).

III. CONCLUSION AND PRAYER

For these reasons, U.S. Bank has satisfied its burden of filing this motion to intervene; has demonstrated a legally protectable interest in the Property underlying this litigation that may be impaired by the results of this lawsuit;

and, has demonstrated that Christiana Trust cannot adequately represent U.S. Bank’s interest related to the Property.

U.S. Bank’s presence as a party to this lawsuit is necessary to full disposition of the claims, parties, and issues present herein. U.S. Bank respectfully requests the Court grant this Motion allowing U.S. Bank to intervene herein and adopt and assert Christiana Trust’s claims for judicial foreclosure as outlined in Christiana Trust’s Amended Complaint.28

Respectfully submitted,

By: /s/ Frank J. Catalano

R. DWAYNE DANNER
State Bar No. 00792443

FRANK J. CATALANO
State Bar No. 24052991

MELINDA L. HOGAN
State Bar No. 24106226

MCGLINCHEY STAFFORD, PLLC
6688 North Central Expressway,
Suite 400
Dallas, Texas 75206
Phone: 214-445-2445
Facsimile: 214-445-2450
ddanner@mcglinchey.com
fcatalano@mcglinchey.com
mhogan@mcglinchey.com

ATTORNEYS FOR INTERVENOR
U.S. BANK

28 ECF (Doc. 18), Plaintiff’s First Amended Complaint.

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Laws In Texas is a blog about the Financial Crisis and how the banks and government are colluding against the citizens and homeowners of the State of Texas and relying on a system of #FakeDocs and post-crisis legal precedents, specially created by the Court of Appeals for the Fifth Circuit to foreclose on homeowners around this great State. We are not lawyers. We do not offer legal advice. We are citizens of the State of Texas who have spent a decade in the court system in Texas and have been party to during this period to the good, the bad and the very ugly.

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