IN THE

SUPREME COURT OF THE STATE OF ARIZONA

AL CARRANZA, A MARRIED MAN

Plaintiff/Cross-Defendant/Appellant,

v.

MARIO A. MADRIGAL, AN INDIVIDUAL; MARTHA C. MADRIGAL,

Defendants/Cross-Defendants/Appellees

and

BRYANT C. MADRIGAL,

Defendant/Cross-Claimant/Appellee,

INVESTIGATION SERVICES, INC.,

Intervenor/Appellee.

No. CV-14-0192-PR

Filed July 22, 2015

Appeal from the Superior Court in Maricopa County

The Honorable Emmet J. Ronan, Judge

No. CV2010-092356

 CV2011-004777

AFFIRMED

Memorandum Decision of the Court of Appeals, Division One

1 CA-CV 12-0359

1 CA-CV 12-0643

(Consolidated)

Filed March 18, 2014

VACATED IN PART

COUNSEL:

Edward D. Fitzhugh (argued), Tempe, Attorney for Al Carranza
CARRANZA v. MADRIGAL

Opinion of the Court

2

Ben R. Jemsek (argued), Thrasher Jemsek PLLC, Phoenix, Attorney for 

Martha and Bryant Madrigal

JUSTICE BRUTINEL authored the opinion of the Court, in which CHIEF 

JUSTICE BALES, VICE CHIEF JUSTICE PELANDER, and JUSTICES

BERCH and TIMMER joined.

JUSTICE BRUTINEL, opinion of the Court:

¶1 Arizona Rule of Civil Procedure 17(a) requires a trial court to 

allow a reasonable opportunity to substitute parties before it dismisses an 

action for lack of prosecution by the real party in interest. We hold that in 

order to substitute a party, one must file a Rule 15(a) motion to amend, and 

the motion may be denied if the court finds undue delay or prejudice.

I.

¶2 Martha and Mario Madrigal brought a wrongful death action 

against the City of Mesa. Attorney Edward Fitzhugh represented the 

Madrigals, but later withdrew. The contingent fee agreement between 

Fitzhugh and the Madrigals provided that if Fitzhugh withdrew for any 

reason, he would be entitled to 25% of any recovery the Madrigals later 

obtained in the case. The Madrigals hired another lawyer, Raymond 

Slomski, who settled the case for $3 million.

¶3 Fitzhugh demanded 25% of the settlement pursuant to the 

agreement. Slomski and the Madrigals rejected the demand, but Slomski 

retained the disputed amount in his client trust account pending a final 

resolution. Instead of suing the Madrigals, Fitzhugh assigned his rights 

under the fee agreement to Al Carranza. Carranza sued the Madrigals for 

the claimed contingency amount, asserting claims for breach of contract,

breach of the covenant of good faith and fair dealing, unjust enrichment, 

and quantum meruit (“fee-collection action”). The Madrigals asserted, 

among other defenses, that the assignment to Carranza was invalid.

¶4 The Madrigals subsequently divorced. The divorce decree 

provided that, upon resolution of the fee-collection action, any remaining 
CARRANZA v. MADRIGAL

Opinion of the Court

3

funds would be split equally among Martha, Mario, and their son, Bryant. 

Later, Mario and Carranza entered into a settlement agreement that called 

for $300,000 of the disputed funds to be released to Mario and Carranza 

(“settlement agreement”). The Joint Notice of Settlement erroneously 

stated that the divorce decree did not allocate the proceeds of the feecollection action and that Mario was entitled to half of the proceeds as 

community property. The superior court approved the settlement and 

ordered Slomski to pay $300,000 to Mario and Carranza. To resolve the 

conflicting claims, Slomski filed an interpleader action.

¶5 Martha Madrigal moved for reconsideration and to set aside

the order approving the settlement agreement. The superior court granted 

relief under Rule 60(c), Arizona Rules of Civil Procedure, and vacated the 

order releasing the funds. Martha then moved for summary judgment in 

the fee-collection action.

¶6 The following day, Carranza moved to substitute Fitzhugh as 

the real party in interest in both the fee-collection action and the 

interpleader action pursuant to Rule 17(a). He did not seek to amend the 

pleadings in either case under Rule 15(a). The superior court initially 

granted the motion in the interpleader action, but later vacated that order 

and denied the substitution request in both actions.

1 The court reasoned

that, in the interpleader case, Carranza was the real party in interest because 

he—and not Fitzhugh—was a party to the settlement agreement and the 

beneficiary of the order releasing the $300,000. As to the fee-collection 

action, the court reasoned that the Madrigals had objected to the validity of 

the assignment from Fitzhugh to Carranza for well over a year. It found 

that Fitzhugh made a “conscious decision” not to name himself as the real 

party in interest, there was no understandable mistake or difficulty 

determining the proper party, and the Madrigals had been prejudiced by 

Fitzhugh’s lengthy and deliberate delay in seeking substitution. The court 

granted summary judgment in favor of Martha Madrigal in the feecollection action, reasoning that both the contingent fee agreement between 

Fitzhugh and the Madrigals and Fitzhugh’s assignment of his claim against 

 

1 The court consolidated the fee-collection action and interpleader 

action before ruling on the motions for substitution, but continued to refer 

to both actions separately in its rulings.
CARRANZA v. MADRIGAL

Opinion of the Court

4

the Madrigals were unethical and therefore unenforceable.

¶7 The court of appeals agreed that the fee agreement was 

unenforceable and affirmed summary judgment, but it reversed the denial 

of Carranza’s motion to substitute, presumably in the fee-collection action. 

Carranza v. Madrigal, 1 CA-CV 12-0359, at *6 ¶ 32 (Ariz. App. Mar. 18, 2014) 

(mem. decision). The court reasoned that Carranza, as assignee of “all 

rights, title and interest” under the fee agreement, had standing to pursue 

only those claims brought under the agreement. Id. at *5–6 ¶¶ 28–29. 

Therefore, Fitzhugh was the real party in interest for equitable claims such 

as unjust enrichment or quantum meruit, and Rule 17(a) requires every 

action to be prosecuted in the name of the real party in interest. Id. at *6 ¶¶ 

29–30. Relying on our opinion in Preston v. Kindred Hospitals West, L.L.C., 

the court noted that substitution of a real party in interest “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.” Id. at *6 ¶ 31 (quoting Preston v. Kindred Hospitals W., L.L.C., 

226 Ariz. 391, 392 ¶ 1, 249 P.3d 771, 772 (2011)).

¶8 We granted review to clarify the meaning of Rules 17(a) and 

15(a), an issue of statewide importance. We have jurisdiction pursuant to 

Article 6, Section 5(3) of the Arizona Constitution and A.R.S. § 12-120.24.

II.

¶9 Rule 17(a) provides as follows:

Every action shall be prosecuted in the name of the real party 

in interest. . . . No action shall be dismissed on the ground that it 

is not prosecuted in the name of the real party in interest until 

a reasonable time has been allowed after objection for 

ratification of commencement of the action by, or joinder or 

substitution of, the real party in interest . . . .

Ariz. R. Civ. P. 17(a) (emphasis added). The rule is not self-executing, nor 

does it provide a mechanism for substitution of a party. Instead, it limits a 

court’s ability to dismiss an action on the ground that it is not being 

prosecuted by the real party in interest.
CARRANZA v. MADRIGAL

Opinion of the Court

5

¶10 Citing Preston, the court of appeals correctly found that 

substitution does not require a plaintiff to show understandable mistake or 

difficulty in identifying the proper party. But that principle is not 

applicable here, and the court erred in holding that Fitzhugh had a right to 

substitution merely because he was a real party in interest. Preston

recognized that an abuse of Rule 17(a) “can be addressed by the trial court’s 

exercise of its discretion under Rule 15(a) in ruling on motions to amend.” 

226 Ariz. at 394 ¶ 13, 249 P.3d at 774.

¶11 Here, the trial court did not abuse its discretion when it 

denied the motions to substitute. First, Rule 17(a) did not preclude 

summary judgment because the trial court granted the motion based on the 

unenforceability of the fee agreement and assignment—not Fitzhugh’s 

failure to prosecute the action as the real party in interest. Second, the 

parties never argued in the trial court that Fitzhugh’s joinder was required 

to prosecute the equitable claims, but even if they had, Carranza still failed 

to seek leave to amend pursuant to Rule 15(a).

¶12 Rule 15(a) governs the amendment of pleadings to substitute 

or add a party. See id. at 394 ¶ 13, 249 P.3d at 774. Carranza’s failure to 

move for leave to amend under Rule 15(a) was a sufficient basis for the trial 

court to deny his motions to substitute. Rule 15(a) requires the party 

seeking amendment to “attach a copy of the proposed amended pleading 

as an exhibit to the motion” and “indicate in what respect it differed from 

the pleading that it amends.” Carranza did not attach copies of the 

proposed amended pleadings, and the motions failed to notify the court 

and opposing counsel how the proposed substitution would amend the 

pleadings.

¶13 Even if Carranza had properly moved to amend (or if we 

deem his motions to substitute as motions for leave to amend under Rule 

15(a)), the trial court did not err in denying the motions. We review the 

denial of a request to amend for an abuse of discretion. See Owen v. Superior 

Court, 133 Ariz. 75, 80, 649 P.2d 278, 283 (1982). A court may deny leave to 

amend if it finds “‘undue’ delay, bad faith, dilatory motive, repeated failure 

to cure deficiencies by previous amendments or undue prejudice to the 

opposing party.” Id. at 79, 649 P.2d at 282; see also Preston, 226 Ariz. at 394 

¶ 13, 249 P.3d at 774 (reasoning that trial court’s exercise of discretion under 
CARRANZA v. MADRIGAL

Opinion of the Court

6

Rule 15(a) can serve to prevent abuse, “such as substitution of a plaintiff on 

the eve of trial after prolonged litigation”). “Prejudice is ‘the inconvenience 

and delay suffered when the amendment raises new issues or inserts new 

parties into the litigation.’” Owen, 133 Ariz. at 79, 649 P.2d at 282 (quoting 

Spitz v. Bache & Co., 122 Ariz. 530, 531, 596 P.2d 365, 366 (1979)). A finding 

of “undue delay” requires more than a party merely seeking to amend late 

in the proceedings. Id. Denial of leave to amend is “a proper exercise of the 

court’s discretion when the amendment comes late and raises new issues 

requiring preparation for factual discovery which would not otherwise 

have been necessitated nor expected, thus requiring delay in the decision of 

the case.” Id. at 81, 649 P.2d at 284.

¶14 Here, the trial court did not abuse its discretion by denying

the request to substitute in the interpleader action or the fee-collection 

action. In the former, the trial court correctly ruled that Fitzhugh was not 

the real party in interest because Carranza, not Fitzhugh, was a party to the 

settlement agreement that was the subject of the interpleader action. With 

respect to the fee-collection action, the court found that the Madrigals had 

been “prejudiced by the lengthy and deliberate delay” in naming Fitzhugh

as the plaintiff, the Madrigals had questioned and objected to the validity 

of the assignment “for well over a year,” and Fitzhugh’s absence as a party 

was a “conscious decision.” Fitzhugh admittedly knew that he was the real 

party in interest. Nevertheless, he inexplicably had Carranza bring the 

action and forced the Madrigals to incur expenses pursuing defenses 

unique to Carranza. Despite the Madrigals’ repeated objections, Carranza 

did not seek to substitute Fitzhugh into the case until the day after Martha 

moved for summary judgment—more than a year after Carranza filed the 

complaint. Denying the motion to substitute was a proper exercise of the 

court’s discretion based on the undue delay caused by Fitzhugh’s tactical 

decision and the prejudice substitution would have caused the Madrigals. 

See Grand v. Nacchio, 225 Ariz. 171, 177 ¶ 34, 236 P.3d 398, 404 (2010) (finding 

no abuse of discretion in denying motion to amend given “the long history” 

of the case and the party’s “considered decision to abandon” a claim); Lans 

v. Digital Equip. Corp., 252 F.3d 1320, 1328–29 (Fed. Cir. 2001) (affirming 

denial of motion for leave to amend complaint because plaintiff’s “personal 

choices occasioned his standing problems and the need to amend”).

¶15 Because the trial court did not abuse its discretion in denying 
CARRANZA v. MADRIGAL

Opinion of the Court

7

the motions to substitute, whether Fitzhugh is the real party in interest is 

irrelevant to this appeal. Accordingly, the court of appeals improperly 

addressed this issue, and we do not reach it.

III.

¶16 We affirm the trial court’s order denying the motions to 

substitute and vacate ¶¶ 26–32 of the court of appeals’ memorandum 

decision.