Chapter 10-1 Necessary and Indispensable Parties

10-1 Necessary and Indispensable Parties

Not infrequently, foreclosure proceedings also involve the holders of second mortgages, junior liens, and other encumbrances recorded against the subject property, as well as intervening title owners and tenants in possession of the subject property. When drafting the complaint, an attorney must conduct and review a title search or abstract in order to ascertain these other interests to be named as parties in the foreclosure action. Indispensable parties are necessary parties so essential to a suit that no final decision can be rendered without their joinder.² This is in contrast to other necessary parties, who have an interest in a suit and ought to be made parties, but who do not have to be joined before a final decision may be rendered.³ A final decision will bind those parties joined in the suit, but will have no effect on the rights of necessary but unnamed parties.⁴

The preparation of the foreclosure complaint is discussed at length in Chapter 6. Litigating with condominium and homeowner associations is discussed at length in Chapter 9. Post-judgment disputes with junior lienholders over judicial sale surplus funds are discussed at length in Chapter 14.

10-1:1 Lis Pendens

The lis pendens recorded in conjunction with the filing of a foreclosure action notifies third parties "that whoever subsequently acquires an interest in the property will stand in the same position as the current owner/vendor, and take the property subject to whatever valid judgment may be rendered in the litigation."⁵ "Lis pendens" literally means a pending lawsuit, and is defined as the jurisdiction, power, or control that courts acquire over property involved in a pending suit.⁶ At common law the lis pendens was intended to warn all interests that the particular property was the subject of litigation, and that any interests acquired during the pendency of the suit were subject to its outcome.⁷ A lis pendens serves as constructive notice of the claims asserted against the property in the pending litigation with respect to one acquiring an interest in the property after the lis pendens is filed.⁸

A notice of lis pendens also operates to protect its proponent by preventing intervening liens that could impair or extinguish claimed property rights.⁹ A notice of lis pendens therefore protects both its proponent and third parties by alerting creditors, prospective purchasers and others to the fact that the title to a particular piece of real...