Opinion ID: 1126318
Heading Depth: 1
Heading Rank: 3

Heading: Effect of Charles's Commencement of the Action

Text: The trial court, in entering the summary judgment, held that one cannot assign a personal injury action to another or appoint an agent or attorney-in-fact to bring a personal injury lawsuit on his behalf. To the extent that statement deals with an assignment of the right to recover for a purely personal tort, it correctly expresses the general rule. See Lowe v. Fulford, 442 So.2d 29, 32 (Ala.1983) (`It is... well settled that, in the absence of statutory provision, rights of action for torts purely personal do not survive, and are not assignable.') (quoting Holt v. Stollenwerck, 174 Ala. 213, 215, 56 So. 912 (1911)). However, Roy Lee did not attempt to transfer or assign his rights in this action to Charles. Charles, acting as attorney-in-fact, brought this action for the benefit of Roy Lee, and not in his individual capacity to assert rights on his own behalf, as would be the case with an assignee.
Rule 17(a), Ala.R.Civ.P., provides, in pertinent part: Every action shall be prosecuted in the name of the real party in interest. An executor, administrator, guardian, bailee, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another, or a party authorized by statute may sue in that person's own name without joining the party for whose benefit the action is brought. An attorney-in-fact is not one of the persons named in these exceptions, and no statute expressly allows the commencement of actions by attorneys-in-fact. Under the comparable federal rule, it has been held that, standing alone, a power of attorney does not enable the grantee to bring suit in his own name. Advanced Magnetics, Inc. v. Bayfront Partners, Inc., 106 F.3d 11, 18 (2d Cir.1997). Charles cannot be considered a real party in interest, and he does not come within any exception stated in Rule 17(a).
Roy Lee and Charles argue that even if Charles should not have commenced the action on behalf of Roy Lee, the trial court should have allowed Roy Lee to be substituted as the real party in interest. Rule 17(a) provides: 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. (Emphasis added.) The defendants argue that this provision of Rule 17 does not apply in cases such as this one, where the limitations period ran before the motion to amend or substitute was filed. They argue that because the original plaintiff was not the real party in interest he never had standing to sue and, as a result, the jurisdiction of the court to adjudicate Roy Lee's claims was never invoked. Thus, they say, there was properly pending before the trial court no complaint to the filing of which an amendment could relate back. In support of this argument, the defendants cite State v. Property at 2018 Rainbow Drive known as Oasis, 740 So.2d 1025 (Ala.1999). We find this case distinguishable from 2018 Rainbow Drive. In that case, the City of Gadsden filed a complaint seeking condemnation and forfeiture of property located within the boundaries of the City, on grounds that it was connected to drug trafficking. Id. at 1026. The trial court dismissed the action, concluding that the City had no authority to bring such an action under a condemnation statute that vested the right to sue exclusively in the State. Id. at 1027. This Court refused to permit relation back of an amendment substituting the State for the City. Id. at 1029. However, 2018 Rainbow Drive dealt with a situation where the party that commenced the action, the City, had no jural relationship with the real party in interest, the State. Here, Charles, as attorney-in-fact under a valid and immediately effective power of attorney, maintained a jural relationship with the real party in interest sufficient to invoke the court's jurisdiction to the extent necessary to allow Rule 17(a) to operate. The rationale of the United States Court of Appeals for the Second Circuit in Advanced Magnetics, Inc. v. Bayfront Partners, Inc., supra, 106 F.3d 11, applying the comparable Rule 17(a), Fed.R.Civ.P., in a similar situation, is highly persuasive. Advanced Magnetics, Inc. (AMI), purporting to represent not only AMI but also several individual shareholders who had assigned AMI their right to sue, sued Bayfront Partners, Inc. (Bayfront), alleging violations of federal securities laws in connection with a public offering. Id. at 11. Bayfront moved to dismiss all claims brought by AMI in its capacity as assignee. Id. AMI subsequently moved to amend the complaint to add as plaintiffs the individual shareholders. Id. The district court determined that because the assignment agreements allowed the individual shareholders to retain certain rights, the agreements were not assignments, but merely powers of attorney, which, it held, do not enable the grantee to bring suit in his own name. Id. at 18. Based on this determination, the district court granted the defendant's motion and dismissed the shareholders' claims. Id. at 11. It also denied AMI's motion to amend because, it held, the amendment would be futile because, in the opinion of the district court, the amended complaint would be barred by the statute of limitations. Id. at 13. The Second Circuit disagreed and held that the motion to amend should have been freely allowed, and, with regard to the running of the limitations period, it quoted an earlier case from the Seventh Circuit: `The substitution of such parties after the applicable statute of limitations may have run is not significant when the change is merely formal and in no way alters the known facts and issues on which the action is based. The courts have freely upheld the filing of an amended complaint under these circumstances.' Advanced Magnetics, 106 F.3d at 19 (quoting Staren v. American Nat'l Bank & Trust Co., 529 F.2d 1257, 1263 (7th Cir. 1976)). Furthermore, the court in Advanced Magnetics determined that while the defendants' challenge to the original complaint was styled a motion to dismiss for lack of standing, their unspoken premise was that AMI lacked standing because the selling shareholders remained, with respect to their own claims, the real parties in interest. Id. at 20. The court quoted Federal Rule 17(a) and stated: Although the district court retains some discretion to dismiss an action where there was no semblance of any reasonable basis for the naming of an incorrect party, there plainly should be no dismissal where `substitution of the real party in interest is necessary to avoid injustice.' Id. at 20 (citations omitted). Finally, the court in Advanced Magnetics held that because the original complaint adequately identified the parties and explained the claims made against the defendants, and because there was no evidence that AMI's failure to name the proper parties was deliberate, the trial court, acting under Rule 17(a), should have granted leave to file the amended complaint substituting the shareholders as plaintiffs. Id. It also expressly held that [t]hose claims will relate back to the date of the original complaint, pursuant to Rule 17, despite the fact that the limitations period had run. Id. at 21. This case presents facts almost identical to those presented in Advanced Magnetics. When Charles filed his complaint on behalf of Roy Lee, he did so under the mistaken belief that, pursuant to the durable power of attorney, he could, in his own name, file an action on behalf of Roy Lee. The complaint specifically named Roy Lee as the party claiming to have been injured as a result of the defendants' alleged negligent acts, and no one presented evidence to indicate that Charles's filing in the wrong name was deliberate. We therefore hold that the trial court erred in not granting the motion to amend so as to substitute Roy Lee as the real party in interest under Rule 17.