Preston v. Kindred Hospitals West, L.L.C.

SUPREME COURT OF ARIZONA
En Banc

LETTIE PRESTON and RODENA ) Arizona Supreme Court
PRESTON, Co-Personal ) No. CV-10-0292-PR
Representatives of the Estate of )
WILLIAM EVERETT PRESTON, on ) Court of Appeals
behalf of the Estate of WILLIAM ) Division One
EVERETT PRESTON, deceased; and ) No. 1 CA-CV 09-0106
LETTIE PRESTON and RODENA )
PRESTON on behalf of WILLIAM ) Maricopa County
EVERETT PRESTON'S statutory ) Superior Court
beneficiaries pursuant to A.R.S. ) No. CV2008-012783
section 12-612(A), )
)
Plaintiffs/Appellants, )
) O P I N I O N
v. )
)
KINDRED HOSPITALS WEST, L.L.C., )
a Delaware limited liability )
company, dba KINDRED HOSPITAL )
ARIZONA-SCOTTSDALE; KINDRED )
HEALTHCARE OPERATING, INC., a )
Delaware corporation; KEVIN )
NICHOLSON, Administrator; STEVE )
SMITH, Executive Director; SCOTT )
FLODEN, Executive Director, )
)
Defendants/Appellees. )
)
__________________________________)

Appeal from the Superior Court in Maricopa County
The Honorable John A. Buttrick, Judge

REVERSED AND REMANDED
________________________________________________________________

Opinion of the Court of Appeals Division One
225 Ariz. 223, 234 P.3d 450 (2010)

AFFIRMED
________________________________________________________________

WILKES & MCHUGH, P.A. Phoenix
By Melanie L. Bossie
And

LAW OFFICE OF SCOTT E. BOEHM, P.C. Phoenix
By Scott E. Boehm
Attorneys for Lettie Preston, Rodena Preston, Estate of
William Everett Preston, and Statutory Beneficiaries of
William Everett Preston

HOLLOWAY ODEGARD FORREST & KELLY, P.C. Phoenix
By Vincent J. Montell
Anthony J. Fernandez
Larry J. Wulkan
Attorneys for Kindred Hospitals West LLC, Kindred Hospital
Arizona-Scottsdale, Kindred Healthcare Operating Inc, Kevin
Nicholson, Steve Smith, and Scott Floden
________________________________________________________________

B A L E S, Justice

¶1 Arizona Rule of Civil Procedure 17(a) requires every

action to be “prosecuted in the name of the real party in

interest.” An action cannot be dismissed for failure to name

the proper party, however, “until a reasonable time has been

allowed after objection” for the real party in interest to

ratify, join, or be substituted into the action. Ariz. R. Civ.

P. 17(a). We hold that Rule 17(a) does not require a plaintiff

to show that an initial failure to name the real party in

interest resulted from an understandable mistake or difficulty

in identifying the proper party.

I.

¶2 This lawsuit was filed by personal representatives on

behalf of the Estate of William Everett “Billy” Preston. A

Grammy Award-winning soloist, Preston also performed with the

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Beatles and many other musicians. See, e.g., The Beatles with

Billy Preston, Get Back (Apple Records 1969). In 2005, he was

admitted to Kindred Hospitals in Scottsdale, Arizona. He died

the next year. The complaint against Kindred Hospitals West,

L.L.C. and other defendants (collectively “Kindred”) alleges

wrongful death, negligence, and elder abuse under the Adult

Protective Services Act, Ariz. Rev. Stat. (“A.R.S.”) § 46-455

(West Supp. 2010).

¶3 Kindred moved to dismiss the complaint, arguing that

the personal representatives lacked standing to sue. Before

entering the hospital, Preston had filed for bankruptcy under

Chapter 11 of the United States Bankruptcy Code. After his

death, the bankruptcy was converted to a Chapter 7 proceeding.

Kindred argued that the claim belonged to the bankruptcy estate

and therefore the bankruptcy trustee was the real party in

interest. The personal representatives agreed but opposed the

motion to dismiss, requesting an opportunity to join or

substitute the trustee pursuant to Rule 17(a). The trustee also

filed a declaration supporting the personal representatives’

pursuit of the action.

¶4 The superior court granted Kindred’s motion to

dismiss, commenting that the purpose of Rule 17(a) is “to

prevent the forfeiture of claims when the determination of the

real party to bring suit is difficult to make or when an

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understandable mistake has been made.” Because the personal

representatives knew of the bankruptcy, the superior court found

that it was not difficult to determine the proper plaintiff and

there was no understandable mistake.

¶5 The court of appeals reversed, stating that “the

unambiguous language of the Rule itself, and well-established

tenets of statutory construction lead us to conclude that

neither an understandable mistake nor difficulty in determining

the proper party is necessary to allow ratification, joinder, or

substitution of the Bankruptcy Trustee under Rule 17(a).”

Preston v. Kindred Hosps. W., L.L.C., 225 Ariz. 223, 227 ¶ 16,

236 P.3d 450, 454 (App. 2010).

¶6 We granted Kindred’s petition for review to consider

the proper interpretation of Rule 17(a), an issue of statewide

importance. The Court has jurisdiction under Article 6, Section

5(3) of the Arizona Constitution and A.R.S. § 12-120.24 (2003).

II.

¶7 Whether Rule 17(a) requires a plaintiff to show that a

failure to name the real party in interest resulted from an

understandable mistake or difficulty in identifying the party is

an issue of first impression in Arizona. Rule 17(a) provides:

Every action shall be prosecuted in the name of the
real party in interest. . . . 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
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 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.

¶8 We apply principles of statutory construction to

interpret court rules. E.g., State v. Aguilar, 209 Ariz. 40, 47

¶ 23, 97 P.3d 865, 872 (2004) (interpreting Ariz. R. Evid.

404(c)). Accordingly, if a rule is clear and unambiguous, we

need not look beyond its “language to determine the drafters’

intent.” Id. at 47 ¶ 23, 97 P.3d at 872 (internal quotation

marks and citation omitted). We give unambiguous language its

“usual, ordinary meaning unless doing so creates an absurd

result.” Id.

¶9 By its terms, Rule 17(a) does not require a plaintiff

to prove an understandable mistake or difficulty in identifying

the proper party in order to avoid dismissal. The accompanying

notes, however, state that the rule is intended to “prevent

forfeiture when determination of the proper party to sue is

difficult or when an understandable mistake has been made.”

Ariz. R. Civ. P. 17(a), State Bar Committee Notes, 1966 Amend.

Kindred argues that these notes limit the application of Rule

17(a). But, in describing the purpose of the rule, the

Committee Notes do not purport to specify the only circumstances

in which substitution of the real party is permitted. Moreover,

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the notes cannot alter the rule’s clear text. See Aguilar, 209

Ariz. at 48 ¶ 26, 97 P.3d at 873 (“Although a comment may

clarify a rule's ambiguous language, a comment cannot otherwise

alter the clear text of a rule.”).

¶10 Interpreting the federal counterpart to Rule 17, some

federal courts have held that the trial court must find it was

difficult to determine the proper party plaintiff or that an

understandable mistake was made before allowing substitution of

the real party in interest. See, e.g., Wieburg v. GTE Sw. Inc.,

272 F.3d 302, 308 (5th Cir. 2001) (citing cases interpreting

Fed. R. Civ. P. 17(a)(3)). But not all federal courts require

such a showing. See, e.g., Esposito v. United States, 368 F.3d

1271, 1275–77 (10th Cir. 2004) (cautioning against an “over-

emphasis on the understandability” of the mistake); Jenkins v.

Wright & Ferguson Funeral Home, 215 F.R.D. 518, 522 n.4 (S.D.

Miss. 2003) (observing that the Advisory Committee Note to Rule

17(a) is in “apparent conflict with the Rule itself”). Having

considered the federal cases, we decline to engraft requirements

onto Rule 17 beyond those reflected in the text of the rule.

¶11 Moreover, even those federal courts that generally

interpret Rule 17 to require a showing of understandable mistake

or difficulty in identifying the proper party would not

necessarily reach a different result in a case like this.

Construing Federal Rule of Civil Procedure 17(a)(3) liberally to

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allow amendments, federal courts ordinarily allow substitution

of the real party in interest for an improperly named plaintiff

with identical claims. See Wieburg, 272 F.3d at 309 (concluding

that “in the light of Rule 17(a)’s purpose of preventing

forfeitures . . . it was an abuse of discretion for the district

court to dismiss the action without explaining why the less

drastic alternatives of either allowing an opportunity for

ratification by the Trustee, or joinder of the Trustee, were

inappropriate”); Advanced Magnetics, Inc. v. Bayfront Partners,

Inc., 106 F.3d 11, 20–21 (2d Cir. 1997) (concluding that the

proposed substitution of the real party in interest should have

been granted under Fed. R. Civ. P. 17(a)).

¶12 Kindred also argues that Rule 17(a) must be construed

in harmony with Arizona Rule of Civil Procedure 15(c). The

latter rule, however, is not particularly relevant here. Rule

15(c) governs the relation back of amendments “changing the

party against whom a claim is asserted,” ordinarily the

defendant. When a real party in interest is substituted for an

incorrectly named plaintiff with identical claims, Rule 17(a)

itself provides the relevant relation-back rule, stating that

the “substitution shall have the same effect as if the action

had been commenced in the name of the real party in interest.”

¶13 Finally, Kindred contends that construing Rule 17(a)

as liberally allowing amendments to name the real party in

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interest may lead to abuse, such as substitution of a plaintiff

on the eve of trial after prolonged litigation. These concerns

can be addressed by the trial court’s exercise of its discretion

under Rule 15(a) in ruling on motions to amend. See Owen v.

Superior Court (Donald), 133 Ariz. 75, 79, 649 P.2d 278, 282

(1982) (recognizing trial court’s power to deny leave to amend

where “there has been undue delay, dilatory action or undue

prejudice”). Kindred has not argued that it would be prejudiced

by the proposed amendment to substitute the plaintiff here

(indeed, it is difficult to imagine how the substitution of one

representative plaintiff for another with identical claims could

result in prejudice), so we need not further address the

circumstances in which a trial court may properly deny

substitution of a real party in interest based on Rule 15(a).

III.

¶14 We affirm the opinion of the court of appeals and

remand this case to the superior court for further proceedings.

_____________________________________
W. Scott Bales, Justice

CONCURRING:

_____________________________________
Rebecca White Berch, Chief Justice

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_____________________________________
Andrew D. Hurwitz, Vice Chief Justice

_____________________________________
A. John Pelander, Justice

_____________________________________
Robert M. Brutinel, Justice

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