PHH Mortgage v. Old Republic National, 80 F.4th 555

PHH (successor to Ocwen) held a mortgage secured by a deed of trust describing the “Entire Southern Tract.”
After foreclosure, Ocwen/PHH recorded title but discovered prior warranty deeds showing the borrowers received only a .229-acre portion, creating a title discrepancy.
PHH submitted a claim under a title insurance policy issued by Old Republic; Old Republic denied coverage and PHH sued for breach of contract in the W.D. Tex.
After discovery, the district court construed the dispute as a trespass-to-try-title action, sua sponte found necessary parties absent, and dismissed the suit under Rule 12(b)(7)/Rule 19.
Both parties appealed; the Fifth Circuit reviewed whether the district court abused its discretion under Rule 19 and whether the appellate court should resolve the summary-judgment motions.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether dismissal under Rule 19 for failure to join parties was proper	PHH: claim is a breach-of-contract action against insurer, distinct from trespass-to-try-title; absent property claimants are not required parties	Old Republic: resolving title implications demands joinder of anyone claiming an interest in the Entire Southern Tract	Vacated dismissal — district court misapplied Texas law by treating a contractual title-insurance claim as a trespass-to-try-title; absent owners are not automatically required under Rule 19(a) and the court failed to apply Rule 19(b) factors
Whether the appellate court should decide the parties’ cross-motions for summary judgment or remand	PHH: remand for district court to consider cross-motions in the first instance	Old Republic: appellate resolution is appropriate in the interest of efficiency	Remanded — appellate court declined to reach merits because the district court did not address them and no special circumstances justified deciding them on appeal

Provident Tradesmens Bank & Tr. Co. v. Patterson, 390 U.S. 102 (establishes Rule 19(b) inquiry and factors)
Am. Sav. & Loan Assoc. of Hous. v. Musick, 531 S.W.2d 581 (Tex. 1975) (distinguishes breach-of-contract against title insurer from trespass-to-try-title)
Thornton, Summers, Biechlin, Dunham & Brown, Inc. v. Cook Paint & Varnish, 82 F.3d 114 (5th Cir.) (title-insurance claim is separate from ownership determination)
Patterson/Hood standard authorities: Hood ex rel. Miss. v. City of Memphis, 570 F.3d 625 (5th Cir. 2009) (abuse-of-discretion when based on erroneous view of law)
HS Res., Inc. v. Wingate, 327 F.3d 432 (5th Cir. 2003) (standard of review for Rule 19 dismissal)
Florey v. Estate of McConnell, 212 S.W.3d 439 (Tex. App.—Austin 2006) (statute not intended to subsume all claims that affect title)
Lance v. Robinson, 543 S.W.3d 723 (Tex. 2018) (trespass-to-try-title applies only when claimant seeks ownership/possessory right)
Rajet Aeroservicios S.A. de C.V. v. Castillo Cervantes, [citation="801 F. App'x 239"] (5th Cir. 2020) (outlines Rule 19(a) tests and approach)
Santiago v. Honeywell Int'l, Inc., [citation="768 F. App'x 1000"] (11th Cir. 2019) (Rule 19(b) required before dismissal)