Sprague v. Sysco Corp.

• Decision Date: 30 August 1999
• Docket Number: No. 43753-4-I.,43753-4-I.
• Citation: 97 Wash.App. 169,982 P.2d 1202
• Court: Washington Court of Appeals
• Parties: Patricia SPRAGUE, Appellant, v. SYSCO CORPORATION, Sysco Food Services of Seattle and Randy Xavior Aka Randy Xavier, in his individual and representative capacities, Respondents.

982 P.2d 1202

97 Wash.App. 169

Patricia SPRAGUE, Appellant, v. SYSCO CORPORATION, Sysco Food Services of Seattle and Randy Xavior Aka Randy Xavier, in his individual and representative capacities, Respondents.

No. 43753-4-I.

Court of Appeals of Washington, Division 1.

August 30, 1999.

Sevilla Clayton, Judith Lonnquist, Seattle, for Appellant.

Lisa Oman, Richard Omata, Seattle, for Respondents.

WEBSTER, J.

Appellant Patricia Sprague appeals the trial court's order denying her motion under CR 17(a) to substitute her bankruptcy trustee as plaintiff in her discrimination action against Respondent Sysco Corporation with relation back to the filing of the original complaint. We find that CR 17(a) allows Sprague, a debtor-plaintiff, to substitute her bankruptcy trustee with relation back to the original filing because Sysco will not be prejudiced and the only change that will result from the amendment is who will benefit from the action. Thus, we reverse.

BACKGROUND

Sprague worked for Sysco from March 1993 to March 1994. She claims that she was sexually harassed while in Sysco's employ.

Sprague filed a Chapter 7 bankruptcy proceeding in November 1994, before filing a discrimination suit. She states in her declaration that she informed her bankruptcy attorney about the harassment and told him that she had decided against bringing a lawsuit because she could not afford an attorney. She did not list any potential claim against Sysco in her bankruptcy schedules. The bankruptcy court granted a discharge in March 1995.

In March 1996, assisted by counsel, Sprague filed a discrimination suit against Sysco. The action named Sprague as the only plaintiff. She claimed her attorney fees and costs for her bankruptcy filing as part of her damages.

In June 1997, after the statute of limitations period had expired on the discrimination action, Sysco moved to dismiss on the grounds that Sprague lacked standing, arguing that unscheduled assets neither administered nor abandoned remain property of the bankruptcy estate and only the bankruptcy trustee has the capacity to bring a claim belonging to the bankruptcy estate. The trial court reserved ruling while the bankruptcy was reopened. After the bankruptcy was reopened, Sprague moved under CR 17(a) to substitute the trustee as plaintiff in the discrimination action. On April 21, 1998, the trial court denied Sprague's motion to substitute the trustee and granted Sysco's motion to dismiss.

STANDARD OF REVIEW

Decisions regarding application of civil rules are reviewed for an abuse of discretion. See, e.g., Ino Ino, Inc. v. City of Bellevue, 132 Wash.2d 103, 142, 937 P.2d 154 (1997) (applying an abuse of discretion standard to a trial court's decision to deny leave to amend a complaint under CR 15(a)), cert. denied, ___ U.S. ___, 118 S.Ct. 856, 139 L.Ed.2d 755 (1998); see also Scheufler v. General Host Corp., 126 F.3d 1261, 1270 (10th Cir.1997) (an abuse of discretion standard is applied to a trial court's decision to allow joinder of a real party in interest under Federal Rule of Civil Procedure 17(a)).

ANALYSIS

A. CR 17(a)

CR 17(a) provides:

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 his own name without joining with him the party for whose benefit the action is brought. 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.

CR 17(a) is identical to Federal Rule of Civil Procedure 17(a). Thus, analysis of the federal rule may be looked to for guidance and followed if the reasoning is persuasive. See Beal v. City of Seattle, 134 Wash.2d 769, 777, 954 P.2d 237 (1998).

The modern function of the rule is "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." FED.R.CIV.P. 17(a) advisory committee's note to 1966 amendment.

Here, there is no debate that Sprague's bankruptcy trustee, not Sprague herself, is the real party in interest; thus, our focus is on the last sentence of the rule that allows substitution of the real party in interest and relation back to the original filing. This provision was enacted to keep pace with developing law: "[M]odern 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.... [This provision] is intended to prevent forfeiture when determination of the proper party to sue is difficult or when an understandable mistake has been made." FED.R.CIV.P. 17(a) advisory committee's note to 1966 amendment.

Following the advisory committee's note, courts have held that "when the determination of the right party to bring the action was not difficult and when no excusable mistake had been made, then the last sentence of Rule 17(a) was not applicable and the action should be dismissed." 6A CHARLES ALAN WRIGHT, ARTHUR R. MILLER, & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE § 1555 (2d ed.1990); see also Rinke v. Johns-Manville Corp., 47 Wash.App. 222, 228, 734 P.2d 533 (1987) ("Most courts ... have restricted relation back to situations where there has been an `honest mistake' or an `understandable mistake' in naming an improper party.") Courts have not given the provision a literal interpretation, which would make it applicable to every case where an incorrect plaintiff is named. See FEDERAL PRACTICE § 1555. "[T]he rule should be applied only to cases in which substitution of the real party in interest is necessary to avoid injustice." Id. This court found that restricting relation back to situations involving honest or understandable mistakes is to "prevent plaintiffs from using the rule to join or substitute persons whose interests were not contemplated from the beginning of the suit." Rinke, 47 Wash.App. at 230, 734 P.2d 533. But noting that modern rules of procedure are "intended to allow the court to reach the merits," the Rinke court added that CR 17(a) "is designed to expedite litigation, not to allow narrow constructions or technicalities to interfere with the merits of a legitimate controversy." Id. at 227, 734 P.2d 533.

B. The Washington Supreme Court's Latest Interpretation of CR 17(a)

Our Supreme Court recently held that a plaintiff is allowed to amend a complaint under CR 15(c)¹ to substitute the real party in interest under CR 17(a), with relation back of the amendment, where: (1) the defendant is not prejudiced; and (2) the only change wrought by the amendment is in the representative capacity in which the action is brought. See Beal, 134 Wash.2d at 773,954 P.2d 237. Beal was appointed the guardian ad litem for three minor children after their mother was killed. See id. at 774, 954 P.2d 237. On the last day of the statute of limitations period, a wrongful death action was filed against the City naming Beal and the deceased's mother and brother as plaintiffs. See id. Although the complaint alleged that Beal was the personal representative of the decedent's estate, he was not in fact appointed as the personal representative until approximately three months after the complaint was filed. See id. at 774-75, 954 P.2d 237. A wrongful death action must be brought by the personal representative of the decedent's estate, and the City moved to dismiss the complaint because Beal, as guardian ad litem and not personal representative, was not the real party in interest. See id. at 775-76, 954 P.2d 237. Beal moved to amend the complaint under CR 17(a), requesting a reasonable period of time to name himself plaintiff in his capacity as the personal representative of the estate, with relation back of the amendment. See id. at 775, 954 P.2d 237. The attorney who filed the complaint stated that he knew before the complaint was filed that the action could be brought only by the personal representative of the estate and that Beal had not yet been appointed to that capacity but claimed that "he had not had time to prepare and file the necessary paperwork to have Beal appointed as personal representative before the statute of limitations ran on the wrongful death action." Id. The trial court denied Beal's motion because there was no honest or understandable mistake in failing to name the personal representative of the estate as the plaintiff, and this court affirmed. See id. at 775-76, 954 P.2d 237.

The Supreme Court reversed. See Beal, 134 Wash.2d at 773, 954 P.2d 237. The Court framed the issue as whether an amendment involving only a change in representative capacity should be allowed where there is no honest or understandable mistake or excusable neglect. See id. at 781, 954 P.2d 237. After discussing the leniency of federal courts in allowing relation back of an amendment, the Beal court reiterated the purposes of the rules at issue: the purpose of CR 15(c) is to permit amendment where the defendant is not prejudiced, and the purpose of CR 17(a) is to protect the defendant against a subsequent action by the real party in interest and to expedite litigation by precluding technical or narrow constructions from interfering with the merits of legitimate controversies. See id. at 782-83, 954 P.2d 237. The court concluded:

Application of the "inexcusable neglect" or "honest mistake" standard to a change in representative capacity undermines the goals, as well as the literal language of the rules. Although we recognize the potential for abuse in a

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