Case Name: LEITE v. DOW CHEMICAL COMPANY
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1990-07-02
Citations: 184 Mich. App. 388
Docket Number: Docket No. 109082
Parties: LEITE v DOW CHEMICAL COMPANY
Judges: Before: McDonald, P.J., and Hood and Griffin, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 184
Pages: 388–394

Head Matter:
LEITE v DOW CHEMICAL COMPANY
Docket No. 109082.
Submitted November 15, 1989, at Lansing.
Decided July 2, 1990.
Leave to appeal applied for.
Stephen Leite, a vice president of Pollen Nation Apiaries, Inc., conceived the idea of raising laboratory rabbits for Dow Chemical Company and Dow Corning Corporation. When the facilities for raising the rabbits were ready, representatives from Dow Chemical and Dow Corning were invited to an open house, the invitations being printed on Pollen Nation Apiaries, Inc., stationary. Several rabbits were later delivered to Dow Chemical and Dow Corning for health evaluations, accompanied by invoices with the heading "Pollen Nation Apiaries, Inc., Rabbitry Division.” Both Dow Chemical and Dow Corning declined to purchase further rabbits. Stephen Leite commenced a breach of contract action in Saginaw Circuit Court against Dow Chemical and Dow Corning. Dow Chemical filed a timely answer and Dow Corning filed an answer some time later after a default had been entered. Neither answer claimed that Stephen Leite was not a real party in interest or that he lacked capacity to sue. An amended complaint was filed, adding Eileen Leite as a plaintiff and a second count based on a claim of false or reckless representations by defendants. Dow Corning raised the defense of real party in interest in its answer to the amended complaint, although Dow Chemical raised no such affirmative offense. Defendants both moved for summary disposition on the basis that plaintiffs were not real parties in interest. The trial court, Robert S. Gilbert, J., granted the motion. Following a denial of their motion for reconsideration, plaintiffs appealed.
The Court of Appeals held:
The defense of real party in interest is a defense relating to capacity to sue and is controlled by the subsection of the summary disposition court rule governing the defense of capacity to sue. The defense of capacity to sue must be raised in the first responsive pleading or it is waived. Since neither defen dant raised that defense in its first responsive pleading, the defense was waived and summary disposition in favor of each defendant was improperly granted.
References
Am Jur 2d, Parties §§ 241, 245, 247.
See the Index to Annotations under Estoppel and Waiver; Parties; Real Party in Interest.
Reversed and remanded.
Griffin, J., concurred in part. He would hold that the real-party-in-interest defense is controlled by the other-disability provision of the summary disposition court rule and that such defense must also be pled in the first responsive pleading. He would hold that Dow Chemical failed to timely plead the defense, but that Dow Coming’s timely filing of its answer to the amended complaint raising that defense related back to the filing of its original answer and thus preserved that defense. He would hold that Dow Chemical waived the defense and reversal is proper, but that Dow Corning preserved the defense and summary disposition in its favor was proper.
1. Motions and Orders — Summary Disposition — Lack of Capacity to Sue — Waiver of Defense.
The defense of lack of capacity to sue is a defense which must be raised in a defendant’s first responsive pleading; failure to do so waives the right to raise the defense thereafter (MCR 2.116[C] [5],[D][2]).
2. Motions and Orders — Summary Disposition — Real Parties in Interest — Court Rules.
The defense, that the plaintiff is not the real party in interest is a defense challenging the capacity of the plaintiff to sue; a motion for summary disposition on the basis of the defense that the plaintiff is not a real party in interest is controlled by the provisions of the summary disposition court rule relating to the defense of capacity to sue (MCR 2.116[C][5],[D][2]).
Peacock, Fordney, Cady, Ingleson & Prince, P.C. (by Victor J. Mastromarco, Jr.), for plaintiffs.
Peter Jennings and Braun, Kendrick, Finkbeiner, Schafer & Murphy (by Scott C. Strattard), for Dow Chemical Company.
Chasnis, Dogger & Grierson, P.C. (by Mark Grierson), for Dow Corning Corporation.
Before: McDonald, P.J., and Hood and Griffin, JJ.

Opinion:
McDonald, P.J.
Plaintiffs appeal as of right from a January 11, 1988, order granting both defendant Dow Chemical Company's and defendant Dow Corning Corporation's motions for summary disposition in this action alleging breach of promise and from a May 13, 1988, order denying reconsideration. We reverse.
This dispute arose when defendants refused to execute an alleged agreement to purchase laboratory rabbits from plaintiffs. Plaintiff Stephen Leite was the vice president of a small corporation known as Pollen Nation Apiaries, Inc. (pna), which was formally organized by Leite and the corporation's president, Bob Dodge, for the purpose of raising bee colonies. When Leite conceived the idea to begin a rabbit farm to supply laboratory rabbits to defendants, Dodge contributed start-up capital for the construction of a rabbit facility. When construction of the facility was close to completion, Leite held an open house, inviting representatives from both defendant companies. The invitations were printed on pna stationary. Sometime later Leite delivered several rabbits to each defendant for health evaluations. The invoices for the same were from Pollen Nation Apiaries, Inc., Babbitry Division. When both defendants declined to purchase further rabbits, Stephen Leite filed suit alleging defendants breached agreements to test and purchase rabbits. Although defendant Dow Chemical answered Leite's August 9, 1984, complaint, defendant Dow Corning failed to file an answer until February 3, 1986, following entry of an order of default. Although both defendants knew of the existence of pna, neither answer asserted plaintiff Stephen Leite was not a real party in interest and that he lacked capacity to sue.
The original complaint was thereafter amended to add Eileen Leite as plaintiff and a second count alleging plaintiffs relied on false or reckless representations made by defendants. At no time was pna named as a party to this suit.
In an order dated January 11, 1988, the trial court granted each defendant's motion for summary disposition, finding plaintiffs were not the real party in interest.
On appeal plaintiffs claim the trial court erred in granting summary disposition, asserting there exists a question of fact as to whether plaintiffs are the real party in interest and that defendants' failure to timely raise the question of capacity to sue in their responsive pleadings constitutes a waiver of said defense. We agree that defendants have waived the right to assert lack of capacity to sue as a defense by failing to raise the same in their first responsive pleadings. MCR 2.116(C)(5), (D)(2); MCR 2.111(F)(3); Huntington Woods v Ajax Paving Industries, Inc, 177 Mich App 351; 441 NW2d 99 (1989).
Defendant Dow Chemical contends its motion for summary disposition, framed as a motion under MCR 2.116(0(10), relies solely on the real-party-in-interest rule, MCR 2.201(B), and does not involve the lack-of-capacity defense governed by MCR 2.116(C)(5), (D)(2). At the hearing at the motion for reconsideration defendant Dow Chemical proffered its position that reference to lack of capacity in Rule 2.116(C)(5) concerns a person's status as a minor or mental incompetent and thus is inapplicable to the instant claim. Dow Chemical cites to Rule 2.201 and its individual subsections entitled "Real-Party-in-Interest" and "Capacity to Sue" as support for its contention that the real-party-in-interest rule is separate and distinct from the capacity-to-sue concept. We are unpersuaded. Had the framers of the court rules intended MCR 2.116(C)(5) (summary disposition based on the lack of legal capacity to sue) to apply only to cases involving infancy or some type of mental disability, they would not have duplicated the same grounds for summary disposition in subsection (7) of the same rule. See Rite-Way Refuse Disposal, Inc v VanderPloeg, 161 Mich App 274; 409 NW2d 804 (1987), and Rogan v Morton, 167 Mich App 483; 423 NW2d 237 (1988), for cases wherein MCR 2.116(C)(5) is employed in instances where infancy or mental disability is not at issue.
We believe MCR 2.116(C)(5) is the proper vehicle to utilize when seeking summary disposition based on a claim that a party is not the real party in interest. Therefore, as previously indicated the defendants' failure to raise this defense in their responsive pleading precludes assertion of the same by motion._
Reversed and remanded for further proceedings.
Hood, J., concurred.
Although defendant Dow Corning asserted the real-party-in-interest defense in its answer to plaintiffs' amended complaint, contrary to Judge Griffin's position, we do not believe MCR 2.118(D) relates to answers to amended pleadings, but rather to the amended pleadings themselves. At no time did the trial court authorize defendant Dow Corning to file an amended answer to plaintiffs' original complaint, the answer thereto being the one in which defendant was required to assert the defense.
MCR 2.201(B) reads in part:
Real Party in Interest. An action must be prosecuted in the name of the real party in interest subject to the following provisions .
MCR 2.116(C) reads in part:
Grounds. The motion [for summary disposition] may be based on one or more of these grounds, and must specify the grounds on which it is based:
(5) The party asserting the claim lacks the legal capacity to sue.
MCR 2.116(D) reads in part:
Time to Raise Defenses and Objections. The grounds listed in subrule (C) must be raised as follows:
(2) The grounds listed in subrule (C)(5), (6), and (7) must be raised not later than a party's responsive pleading.