Opinion ID: 1330383
Heading Depth: 1
Heading Rank: 6

Heading: Real Party in Interest Analysis

Text: The circuit court dismissed appellee Bird because he was not a proper party to the instant litigation. The parties agree that the circuit court's decision was based upon W.Va.R.Civ.P. Rule 17(a) [1978], which requires that actions be brought in the name of the real party in interest. Where an issue on appeal from the circuit court is clearly a question of law or involves an interpretation of a statute, we apply a de novo standard of review. Syllabus Point 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995). An interpretation of the West Virginia Rules of Civil Procedure likewise presents a question of law subject to a de novo review. W.Va.R.Civ.P. Rule 17(a) states: (a) Real Party in Interest. Every action shall be prosecuted in the name of the real party in interest. An executor, administrator, guardian, bailee, trustee of an express trust, or any other fiduciary, a party with whom or in whose name a contract has been made for the benefit of another, or a party authorized by law may sue in his own name without joining with him the party for whose benefit the action is brought. When a law of the state so provides, an action for the use or benefit of another shall be brought in the name of the state or any political subdivision thereof. 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; and such ratification, joinder, or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest. Rule 17(a) does not specifically define the term real party in interest. About the best that can be said for [Rule] 17 is that it conveys a certain amount of correct information about naming plaintiffs. Virginia Elec. & Power Co. v. Westinghouse Elec. Corporation, 485 F.2d 78, 82 (4th Cir.1973). While Rule 17(a) was originally intended to expand the class of those who may sue to include persons having an equitable or beneficial interest, the rule is unfortunately susceptible to efforts to prevent prosecution of claims as illustrated by this appeal. Ingenious counsel are enabled to present yet another `decision point' resulting in extravagant expenditures of time and effort before ever reaching the merits. 485 F.2d at 83. Our reading of the language of Rule 17(a) is that it plainly indicates that its analysis applies only to claimants, that is, individuals who prosecute[], sue, or who may bring a lawsuit in the name of the state or others. The real party in interest analysis focuses upon a plaintiff, defendant, petitioner, or intervenor that is asserting a claim, counter-claim or cross-claim, as opposed to a defendant or respondent, that is, the persons against whom a claim is made. The purpose of Rule 17(a) is not to simply identify a party by the correct title, but to ensure that the party who makes a claim possesses, under substantive law, the right sought to be enforced. Hanna Mining Co. v. Minnesota Power and Light Co., 573 F.Supp. 1395, 1397, (D.C.Minn.1983), aff'd, 739 F.2d 1368 (8th Cir.1984). The initial purpose of the rule was to broaden the scope of claimants, from the holder of the claim to representatives of the holders of claims. The Committee Note of 1966 to Amended Federal Rule of Civil Procedure 17(a) states, in part: In its origin the rule concerning the real party in interest was permissive in purpose: it was designed to allow an assignee to sue in his own name. That having been accomplished, the modern function of the rule in its negative aspect is simply to protect the defendant against a subsequent action by the party actually entitled to recover, and to insure generally that the judgment will have its proper effect as res judicata. 4 James W. Moore, Moore's Federal Practice, 3d Edition § 17 App.04. [9] We therefore hold that the purpose of W.Va.R.Civ.P. Rule 17(a) is to ensure that the party who asserts a cause of action possesses, under substantive law, the right sought to be enforced. W.Va.R.Civ.P. Rule 17(a) allows circuit courts to hear only those suits brought by persons who possess the right to enforce a claim and who have a significant interest in the litigation. Virginia Elec. & Power Co., 485 F.2d at 83. The requirement that claims be prosecuted only by a real party in interest enables a responding party to avail himself of evidence and defenses that he has against the real party in interest, to assure him of finality of judgment, and to protect him from another suit later brought by the real party in interest on the same matter. Celanese Corp. of America v. John Clark Industries, 214 F.2d 551, 556 (5th Cir.1954). In its modern formulation, Rule 17(a) protects a responding party against the harassment of lawsuits by persons who do not have the power to make final and binding decisions concerning the prosecution, compromise, and settlement of a claim. Campus Sweater and Sportswear Co. v. M.B. Kahn Const. Co., 515 F.Supp. 64, 81 (D.S.C.1979), aff'd, 644 F.2d 877 (4th Cir. 1981). Thus, the concept of a real party in interest addresses a litigant's right to pursue an action as a claimant. A defendant can be a real party in interest, if asserting a claim. National Safe Corp. v. Texidor Sec. Equipment, Inc., 101 F.R.D. 467 (D.P.R. 1984). See also W.Va.R.Civ.P. Rule 13 [1978] (compulsory and permissive counterclaims, and cross-claims against co-parties). A similar analysis applies to intervening parties. New Orleans Public Service, Inc. v. United Gas Pipe Line Co., 732 F.2d 452, 464 (5th Cir.), cert. denied sub nom, Morial v. United Gas Pipe Line Co., 469 U.S. 1019, 105 S.Ct. 434, 83 L.Ed.2d 360 (1984). The language of Rule 17(a) expressly authorizes a real party in interest to sue on behalf of, or for the benefit of, another. Many of the examples of real parties in interest listed in the rule are individuals with some fiduciary interest (executors, administrators, guardians, bailees, trustees of an express trust, etc.), individuals who are charged with the responsibility of adequately representing another's interests. See 4 James W. Moore, Moore's Federal Practice, 3d Edition, § 17.10[3]. In Richardson v. Kennedy, 197 W.Va. 326, 475 S.E.2d 418 (1996), we noted that the personal representative of a decedent's estate, while a nominal party in a wrongful death claim, is still a real party in interest who may initiate a wrongful death action on behalf of the decedent's beneficiaries against a tortfeasor. However, simply because a claimant falls into one of the categories of persons listed in Rule 17(a) does not end the analysis; the claimant must still establish they have a right under the substantive law to initiate a lawsuit to enforce some right. [T]he mere fact that plaintiff falls within one of the classes of persons enumerated in Rule 17(a) is not dispositive of the real party in interest question, for that rule assumes that the enumerated persons are granted the right to sue by the applicable substantive law. Lubbock Feed Lots, Inc. v. Iowa Beef Processors, Inc., 630 F.2d 250, 257 (5th Cir.1980). See also, Childers v. Eastern Foam Products, Inc., 94 F.R.D. 53, 55 (N.D.Ga.1982); See v. Emhart Corp., 444 F.Supp. 71, 73 (W.D.Mo.1977); Virginia Elec. & Power Co., 485 F.2d at 83; United States v. 936.71 Acres of Land, 418 F.2d 551, 556 (5th Cir.1969). Plaintiff-appellant Keesecker argues that defendant-appellee Bird is a proper party in this action because Mr. Bird was a guardian or other fiduciary as listed in Rule 17(a). The circuit court ruled instead that Mr. Bird was not a proper party. We believe that this analysis is backwards; the test under Rule 17(a) is whether Mr. Keesecker is a real party in interest, for he is the party prosecuting a claim for waste to the life estate and damage to his remainder interest. As the defending party to that claim, Mr. Bird is not subject to the real party in interest analysis. [10] We conclude that the circuit court in this case erred by ruling that defendant Bird was not a proper party under W.Va. R.Civ.P. Rule 17(a). The focus of the Rule 17(a) analysis should have been on Mr. Keesecker's right and interest in prosecuting an action for waste to his interest in property, and not whether Mr. Bird was a proper defendant. Mr. Keesecker is undoubtedly the owner of the remainder interest in the life estate property. Accordingly, it appears that the appellant, Mr. Keesecker, has both a sufficient interest in the litigation and may be entitled under the substantive law to recover for damages to his remainder interest. Therefore, Mr. Keesecker is a real party in interest entitled to pursue his action for waste. However, as we have previously noted, the parties agree that the circuit court's summary judgment ruling relied upon Rule 17(a)'s real party in interest principles to find that Mr. Bird was not a proper party defendant. As we have shown, Rule 17(a) applies to parties prosecuting claims, not parties defending against claims. Therefore, the circuit court erred in relying upon Rule 17(a) to dismiss Mr. Bird as a defendant. [11] iii.