Opinion ID: 199486
Heading Depth: 2
Heading Rank: 1

Heading: Capacity to Sue

Text: 13 Interstate on appeal makes a series of arguments about capacity to sue. In doing so, it confuses two issues. The first issue is whether the district court abused its discretion by allowing the motion to amend in order to substitute Brown for Integra. The second issue is whether, given that the amendment was allowed, Brown properly stood in Integra's shoes as a matter of fact. As to the second issue, it has been waived because Interstate failed to make it an issue before the jury. 14 On the first issue, we review the allowance or denial of motions to amend the pleadings for abuse of discretion. See Ruiz v. Posadas de San Juan Assocs., 124 F.3d 243, 250 n.11 (1st Cir. 1997); Resolution Trust Corp. v. Gold, 30 F.3d 251, 253 (1st Cir. 1994). 5 Motions for leave to amend shall be freely given when justice so requires. Fed. R. Civ. P. 15(a); see also Resolution Trust, 30 F.3d at 253 (Leave to amend is to be freely given, unless it would be futile, or reward, inter alia, undue or intended delay.) (internal quotation marks and citations omitted). Here, Brown sought to substitute himself personally for Integra on the ground that he was the real party in interest, Integra having been dissolved by operation of law before the events in issue. See Fed. R. Civ. P. 17(a) (Every action shall be prosecuted in the name of the real party in interest.). Brown maintained that at all times relevant he was Integra's sole officer, employee, and shareholder, and that he participated personally and directly in all transactions with Interstate. 15 The district court had before it conflicting accounts of the events surrounding Integra's dissolution. Interstate said Brown knew or should have known that Integra had already been dissolved for almost two years when it entered into discussions about the presses; Brown claimed that he believed Integra had complied with New Hampshire's requirements on reporting and filing fees, and that he was a real party in interest. The court could easily have concluded that Brown had more than a colorable claim, and it had evidentiary support for that conclusion. As a counterclaim plaintiff, Brown appeared to have the requisite stake. See Seckler v. Star Enter., 124 F.3d 1399, 1406 (11th Cir. 1997) (In order for [plaintiff] to demonstrate that he is a real party in interest, [he] must allege facts sufficient to reveal that he suffered an injury, that the injury was caused by the defendant's illegal conduct, and that his injury could be redressed by a favorable outcome to the lawsuit.). 16 Brown also was substituted as a defendant, and this benefitted Interstate; Interstate now had a live person, and not a defunct corporation, to answer for any judgment it obtained. Interstate attacks the allowance of the substitution motion, but it does not identify any prejudice resulting from that decision. Indeed, Interstate's trial preparation on the merits issues could hardly have been much different given its view, expressed in its opposition to Brown's motion for summary judgment, that Brown was Integra's alter ego. The trial court properly concluded that it was in the interests of justice for Brown to be substituted as the formal party in the pleadings. See Fed. R. Civ. P. 17 advisory committee's note (1966 Amendment) (Modern decisions are inclined to be lenient when an honest mistake has been made in choosing the party in whose name the action is to be filed . . . .). 17 Following the district court's decision to allow Brown's motion to amend and substitute, any questions as to whether Brown was indeed a proper party to the purported contract with Interstate were questions of fact for the jury. See Assocs. Discount Corp. v. Haynes Garage, Inc., 24 N.E.2d 685, 687-88 (Mass. 1939) (question of who contracting parties were is question of fact) (citing Lunn & Sweet Co. v. Wolfman, 152 N.E. 893, 894-95 (Mass. 1926)). If, after the substitution, Interstate wanted to challenge Brown's capacity to sue or raise any issue of fraudulent concealment by Brown of Integra's dissolved status, it should have done so before the jury. Interstate did not. Rather, its focus at trial was solely on other matters: contesting Brown's claim that Becker had signed the August 25, 1995 proposal; trying to prove the $75,000 deposit was refundable; and challenging Brown's own claims for damages. 6 Interstate may not now pursue these claims about capacity to sue on appeal. 18