The Iowa Supreme Court provided a reminder today that substitution of the real party in interest is not automatic. In Frontier Leasing Corp. v. Treynor Recreation Area, the trial court denied the plaintiff's collection action because the plaintiff could not establish the chain of assignments making it the proper plaintiff. The court of appeals affirmed, but in so doing stated: "On remand, the district court shall allow a reasonable period of time for substitution of the real party in interest. Iowa R. Civ. P. 1.201."
Rule 1.201 provides that an action cannot 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 joinder or substitution.
The Iowa Supreme Court issued a per curiam opinion today clarifying that the defendant "should have an opportunity to show prejudice by any substitution."
What could such prejudice be? Apparently, adverse impact on the policy considerations of the statute of limitations.
The Court's opinion today cited its opinion in the 2000 case of Estate of Kuhns v. Marco, 620 N.W.2d 488, 495 (Iowa 2000), which stated "prejudice would not normally occur in such situations," at least when there is no accompanying change in the claims against the defendant.
In other words, the defendant has won this battle, but--as with many real party in interest objections--it might not mean much in the end.
Recent Comments