Civil Procedure--Real Party in Interest

Preston v. Kindred Hospitals West, L.L.C., __Ariz. Adv. Rep. __, No. Cv-10-0292 (March 24, 2010) (J. Bales)

PLAINTIFFS' FAILURE TO PROSECUTE A CASE IN THE NAME OF A REAL PARTY IN INTEREST DOES NOT REQUIRE A SHOWING OF “UNDERSTANDABLE MISTAKE OR DIFFICULTY IN IDENTIFYING THE PARTY”

The personal representative [PR] of the Estate of Billy Preston (Grammy Award-winning soloist and Beatles cohort) filed suit on behalf of the estate against the defendants for Billy's wrongful death, negligence and elder abuse (ARS sec. 46-455). The defendant Kindred moved to dismiss on the grounds the PR lacked standing to sue because before Billy's death he had filed for bankruptcy and therefore the claim belonged to the bankruptcy estate and real party in interest. In response the PR requested the court grant it leave to substitute the trustee pursuant to Rule 17 (a) of the Arizona Rules of Civil Procedure. The trial court granted the motion to dismiss finding that substituting the real party in interest under Rule 17 (a) was only allowed where it is difficult to ascertain the real party in interest or there is an understandable mistake. This ruling was supported by the State Bar Committee Note accompanying the rule.

The Arizona Court of Appeals reversed and the Arizona Supreme Court affirmed the court of appeals holding that despite the Committee Note, the clear language of Rule 17(a) does not allow an action to be dismissed for failure to name the proper party “until a reasonable time has been allowed after objection for the real party in interest to ratify, join, or be substituted into the action.” The rule does not require a plaintiff to “show that an initial failure to name the real party in interest resulted from an understandable mistake or difficulty in identifying the proper party.”