PHILIPPOU v. J.P. MORGAN MORTGAGE
Release on 03/01/13
Although there was minimal elaboration due to the appellee's confession of error, there is an important principle illustrated by the Philippou
decision that is closely related to a topic more frequently visited by several Forum commentators. The more common theme is that a judgment is typically binding only upon those who are expressly made parties to a case (most commonly by naming and serving those parties). If A sues B, C, a non-party to such suit is not typically bound by any judgment or final order determining A's and B's rights.
The related nuance, less frequently discussed is that judgment cannot be granted in favor of a non-party
to an action. If A sues B, the court cannot enter a judgment in favor of C unless C either intervenes in the case and requests relief or C is properly substituted as plaintiff by motion and order.
This latter problem arises far more often than many folks realize. Sometimes a suit will be filed in the name of one corporate entity (sometimes a servicer), but the foreclosure mill will prepare a judgment in the name of either another related entity or the judgment will be in favor of a GSE or an institutional bank serving as trustee for a mortgage trust.
As with so many issues, it is usually important that the issue be raised and preserved for appellate review, though in some jurisdictions a judgment in favor of or against a non-party may even be fundamental error that can be raised for the very first time on appeal. Be sure to carefully check both the rules and the cases on this topic to determine the error preservation requirements for your jurisdiction if you are faced with such a situation.