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William A. Roper, Jr.
Another relatively recent Ohio appellate case reinforces and extends the holding of the court in Wells Fargo Bank, N.A. v. Byrd, 178 Ohio App.3d 285, 2008 Ohio 4603, 897 N.E.2d 722.  The case is:

Bank of N.Y. v. Gindele, APPEAL No. C-090251, COURT OF APPEALS OF OHIO, FIRST APPELLATE DISTRICT, HAMILTON COUNTY, 2010 Ohio 542; 2010 Ohio App. LEXIS 462.

 

http://www.sconet.state.oh.us/rod/docs/pdf/1/2010/2010-ohio-542.pdf


The Court explained the role of Rule 17(a) in this way:

"This narrow reading of Civ.R. 17 comports with the intent of the rule. As other state and federal courts have noted, Civ.R. 17 generally allows ratification, joinder, and substitution of parties "to avoid forfeiture and injustice when an understandable mistake has been made in selecting the parties in whose name the action should be brought." n3  "While a literal interpretation of * * * Rule 17(a) would make it applicable to every case in which an inappropriate plaintiff was named, the Advisory Committee's Notes make it clear that 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.  When determination of the correct party to bring the action was not difficult and when no excusable mistake was made, the last sentence of Rule 17(a) is inapplicable and the  [*4]  action should be dismissed." n4"

Footnotes:
Ohio Central RR. Sys. v. Mason Law Firm Co., LPA, 182 Ohio App.3d 814, 2009 Ohio 3238, 915 N.E.2d 397, quoting Agri-Mark, Inc. v. Niro, Inc. (D.Mass.2000), 190 F.R.D. 293; see, also, Fed.R.Civ.P. 17 Advisory Committee Note.
4  Id.

The Court went on to hold:

"In a foreclosure action, absent understandable mistake or circumstances where the identity of a party is difficult or impossible to ascertain, a bank that was not the mortgagee when suit was filed cannot cure its lack of standing by subsequently obtaining an interest in the mortgage."

While this case extends the holdings in Jordan and Byrd, there are also several other recent Ohio cases which which tend to undermine these holdings by confusing the concepts of standing, capacity and real party at interest.

In the cases going the other way, defendants have either failed to make the correct defensive arguments in the trial court, failed to explain and/or develop the arguments correctly in the appellate briefs.  These cases seem to be proof of the adage that "bad cases make bad law".

Note to Site Administrator: This case may belong in the Legal Lounge!

Thanks Bill.  This case is already in the Legal Lounge under Bank of New York http://www.msfraud.org/LAW/Lounge/Lounge.html and on the Standing page at http://www.msfraud.org/LAW/Lounge/Standing.html
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connect the dots
"understandable mistake" sounds like "a little pregnant". Danger here!
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William A. Roper, Jr.
One of the mistakes that both attorneys and pro se litigants continue to make both at the trial level and on appeal is to muddle the Rule 17 "real party at interest" arguments with standing arguments under the state or federal Constitutions.

The real party at interest arguments relate to court Rules, which are subject to interpretation in consideration of other Rules.

The Federal Rule (used in Federal District Court cases) is Rule 17.  This reads:

Rule 17. Plaintiff and Defendant; Capacity; Public Officers
(a) Real Party in Interest.
(1) Designation in General.
An action must be prosecuted in the name of the real party in interest. The following may sue in their own names without joining the person for whose benefit the action is brought:
(A) an executor;
(B) an administrator;
(C) a guardian;
(D) a bailee;
(E) a trustee of an express trust;
(F) a party with whom or in whose name a contract has been made for another's benefit; and
(G) a party authorized by statute.

(2) Action in the Name of the United States for Another's Use or Benefit.
When a federal statute so provides, an action for another's use or benefit must be brought in the name of the United States.

(3) Joinder of the Real Party in Interest.
The court may not dismiss an action for failure to prosecute in the name of the real party in interest until, after an objection, a reasonable time has been allowed for the real party in interest to ratify, join, or be substituted into the action. After ratification, joinder, or substitution, the action proceeds as if it had been originally commenced by the real party in interest.

(b) Capacity to Sue or be Sued.
Capacity to sue or be sued is determined as follows:

(1) for an individual who is not acting in a representative capacity, by the law of the individual's domicile;

(2) for a corporation, by the law under which it was organized; and

(3) for all other parties, by the law of the state where the court is located, except that:

(A) a partnership or other unincorporated association with no such capacity under that state's law may sue or be sued in its common name to enforce a substantive right existing under the United States Constitution or laws; and

(B) 28 U.S.C. §§ 754 and 959(a) govern the capacity of a receiver appointed by a United States court to sue or be sued in a United States court.

 

. . .

 

See:  http://www.law.cornell.edu/rules/frcp/Rule17.htm

 

*

 

A number of states, including Ohio, have state court Rules modeled after and even numbered consistently with the Federal Rules.  (In these states, the courts often look to Federal court Rules decisions for additional clarifying authority as to what these court Rules actually mean.)

 

Rule 17, as written, subsumes both some standing issues, as well as capacity issues, but it is mostly about capacity.  These are separate but related concepts.

 

These are concepts which are often muddled by both litigants and the courts.  In Texas, after a number of often and conflicting intermediate appellate court rulings over the course of a couple of decades, the Texas Supreme Court stepped in to clarify the difference.  In several rulings, it has furnished about as clear a distinction as may be found anywhere:

 

“A plaintiff must have both standing and capacity to bring a lawsuit.  Coastal Liquids Transp., 46 S.W.3d at 884.  The issue of standing focuses on whether a party has a sufficient relationship with the lawsuit so as to have a ‘justiciable interest’ in its outcome, whereas the issue of capacity ‘is conceived of as a procedural issue dealing with the personal qualifications of a party to litigate.’  6A CHARLES ALAN WRIGHT, ARTHUR R. MILLER, AND MARY KAY KANE, WRIGHT, MILLER & KANE, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2D § 1559, at 441 (2d ed. 1990).  We have previously distinguished between these two threshold requirements as follows:

 

A plaintiff has standing when it is personally aggrieved, regardless of whether it is acting with legal authority; a party has capacity when it has the legal authority to act, regardless of whether it has a justiciable interest in the controversy.

 

Nootsie, Ltd. v. Williamson County Appraisal Dist., 925 S.W.2d 659, 661, 39 Tex. Sup.Ct. J. 1049 (Tex. 1996); see also 6A WRIGHT, MILLER, & KANE, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2D § 1559, at 441 (‘Capacity has been defined as a party’s personal right to come into court, and should not be confused with the question of whether a party has an enforceable right or interest.’).”  Austin Nursing Center v. Lovato, 171 S.W.3d 845 at 848, 849; 2005 Tex. LEXIS 386; 48 Tex. Sup. J. 624 (Tex. 2005).

[Please note that this articulation of the distinction between standing and capacity is not binding law outside of Texas, but remains instructive as to what these differing concepts really mean.]

 

Some examples are instructive.  Suppose that John SMITH, a person sustaining an injury which forms the basis for a valid cause of action, dies leaving heirs Thomas, Charles, Mary and Elizabeth, all of whom are to share equally in his estate.  Thomas is named his court appointed administrator.  All four have a pecuniary interest in a suit arising out of John SMITH's injury and therefore each have standing.  But only Thomas has the capacity to sue, as the named administrator of the estate.

 

Under similar circumstances, if John SMITH had died leaving a sole heir John SMITH Jr. who was a minor, John SMITH, Jr. would have standing, but would lack capacity (as a minor).  John SMITH, Jr.'s suit on his father's cause of action might be deferred until he reached age of majoriity OR his legal guardian might file suit on his behalf in a representative capacity.

 

Where a corporation allowed its charter to lapse without any formal distribution or assignment of its lawful causes of action, it shareholders might have a valid pecuniary interest in the such causes of action and therefore might have standing.  But these might lack the capacity to sue in their own name on the corporation's causes of action.

 

A similar problem can arise where a corporation is not properly registered under the laws of another states as a foreign coporation.  The unregistered corporation is not permitted in many states to seek redress in a state's courts without first registering.  The foreign corporation might have a pecuniary interest in the suit, and therefore has standing, but lacks the capacity to sue.

 

*

 

Unfortunately, courts almost everywhere have often muddled these distinct concepts and very often this muddle hasn't been clarified by definitive rulings from state Supreme Courts.

 

*

 

Turning back to Rule 17, realize that by itself, it is merely a Rule.  And it is subject to interpretation in conjunction with the other Rules, including Rule 1, which states:

"These rules govern the procedure in all civil actions and proceedings in the United States district courts, except as stated in Rule 81. They should be construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding."

When considered in isolation, Rule 1 might seem to suggest that some of the sharpness of definition of the Rules might be overlooked to achieve "just, speedy, and inexpensive determination of every action and proceeding".

 

Suppose that a plaintiff comes into court suing on a mortgage claim filing suit on February 1, 2010.  Suppose that the plaintiff pleads into evidence an alleged promissory note and mortgage made out in favor of another entity, calling into question the plaintiff's standing to sue.

 

When the defendant pleads that the plaintiff is not the real party at interest under Rule 17, the plaintiff pleads an assignment showing that the plaintiff obtained an interest in the subject mortgage on March 1, 2010, a month after the filing of the suit.

 

The plaintiff contends that it NOW has an interest in the suit and therefore the suit ought to be allowed to proceed.

 

If the defendant's Rule 17 argument is accepted, the suit would be dismissed without prejudice allowing the plaintiff to refile.  To the extent that the plaintiff has actually obtained a real enforceable interest in the subject matter of the suit, all that seems to be achieved is delay.

 

Thinking about Rule 17 in isolation and only in consideration of Rule 1, a court may very well reason that a dismissal of the case is inconsistent with a "just, speedy, and inexpensive determination".

 

And this is precisely what several Ohio appellate courts HAVE decided when the defendant pleads Rule 17.

 

Rule 17 and real party at interest is the wrong argument!

 

The correct argument is to point out that the plaintiff lacks Constitutional standing under the federal or state Constitution. 

 

The Federal restraint is under Article III and it is precisely on this basis -- NOT Rule 17 -- that the Ohio Federal Courts dismissed almost two hundred cases under published decisions by Dowd, Boyko, Rose, O'Malley and others.

 

The state Constitutional restraints are usually found within a state "open courts" provision.

 

*

 

I return to a discussion of the holdings of the Texas Supreme Court, explaining standing in Texas:

 

“Under federal law, standing is also an aspect of the Article III limitation of the judicial power to ‘cases’ and ‘controversies.’  Sierra Club v. Morton, 405 U.S. 727, 731, 31 L. Ed. 2d 636, 92 S. Ct. 1361 (1972).  To comport with Article III, a federal court may hear a case only when the litigant has been threatened with or has sustained an injury.  Valley Forge Christian College, 454 U.S. at 471.*  Under the Texas Constitution, standing is implicit in the open courts provision, which contemplates access to the courts only for those litigants suffering an injury.  Specifically, the open courts provision provides:

 

All courts shall be open, and every person for an injury done him, in his lands, goods, person or reputation, shall have remedy by due course of law.

 

TEX. CONST. art. I, §13 (emphasis added).  Because standing is a constitutional prerequisite to maintaining a suit under both federal and Texas law, we look to the more extensive jurisprudential experience of the federal courts on this subject for any guidance it may yield.”  Texas Association of Business v. Texas Air Control Board, 852 S.W.2d 440 at 443, 444; 1993 Tex. LEXIS 22; 36 Tex. Sup. J. 607 (Tex. 1993).

 

Valley Forge Christian College v. Americans United for Separation of Church and State, 454 U.S. 464, 471-74, 70 L. Ed. 2d 700, 102 S. Ct. 752 (1982).

 

Since the Federal Courts and the Texas Courts have found that the standing requirement is Constitutional, it ALWAYS trumps what the Court Rules say!

 

That is, a state Court, including the Supreme Court, may not simply interpret the Rules in a way that brings harmony to these Rules (e.g. Rule 17 and Rule 1), while reaching a holding contrary to the express provisions of the State Constitution.

 

Finding that standing is a Constitutional imperative, the Texas Supreme Court goes on to explain:

“We therefore hold that standing, as a component of subject matter jurisdiction, cannot be waived in this or any other case and may be raised for the first time on appeal by the parties or by the court.”  Texas Association of Business v. Texas Air Control Board, 852 S.W.2d 440 at 445, 446; 1993 Tex. LEXIS 22; 36 Tex. Sup. J. 607 (Tex. 1993).

[DO NOT RELY UPON THIS BEING THE RULE IN YOUR STATE.  MAKE THE STANDING ARGUMENT WITHIN YOUR DEFENSIVE PLEADINGS AS EARLY AS POSSIBLE AND FIND THE APPROPRIATE STATE CONSTITUTIONAL RESTRAINT TO CITE.  NEW YORK HAS EXPRESSLY HELD THAT A STANDING ARGUMENT MUST BE TIMELY MADE AT THE TRIAL COURT OR THIS ARGUMENT IS WAIVED.]

 

*

 

Finally, note that Constitutinal standing is determined by the plaintiff's interest at the commencement of the suit.  Here is the Federal Court's guidance:

 

“Subject-matter jurisdiction ‘depends on the state of things at the time of the action brought’ [quoting Chief Justice John Marshall]… Mollan v. Torrance, 9 Wheat. 537, 539 (1824); see, e.g., Smith v. Sperling, 354 U.S. 91, 93, n. 1 (1957); St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289-290 (1938).”  From Justice Scalia’s concurring opinion in Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc., 484 U.S. 49;108 S. Ct. 376;98 L. Ed. 2d 306;1987 U.S. LEXIS 5030.

 

[See the Ohio Federal Court dismissals for specific mortgage related case law.]

 

The Texas Supreme Court reaches a similar finding:

 

“Standing is determined at the time suit is filed in the trial court …. Carr, 931 F.2d at 1061 ”  Texas Association of Business v. Texas Air Control Board, 852 S.W.2d 440 at 446 n 9; 1993 Tex. LEXIS 22; 36 Tex. Sup. J. 607 (Tex. 1993).

 

“… we hold that a named plaintiff’s lack of individual standing at the time suit is filed deprives the court of subject matter jurisdiction over the plaintiff’s individual claims and claims on behalf of a class.”  M. D. Anderson Cancer Center v. Novak, 52 S.W.3d 704; 2001 Tex. LEXIS 57; 44 Tex. Sup. J. 905 (Tex. 2001).

 

* * *

 

There is nothing wrong with making a Rule 17 real party at interest defensive argument.  But you need to expect that the plaintiff is going to cite Rule 1 and various appellate case determined where the defendant has FAILED TO MAKE a Constitutional standing argument and will use these decisions to confuse the court and to defeat you! 

 

So it is critically important to make a Constitutional Standing argument, as well.

 

Every time a defendant pleads only a Rule 17 real party at interest and then takes a case to an appellate court, the unfavorable decisions serve only to further frustrate valid defenses readily available when properly pled and argued.

 

NOTE:  I am a non-attorney, pro se litigant.  This is 1st Amendment discussion about legal issues.  It is NOT legal advice.  You are encouraged to undertake independent due diligence and to seek counsel from a licensed attorney in your state! 

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William A. Roper, Jr.

Google Scholar Links To Cases Cited


Most of the cases cited in the post above are now available on Google Scholar.   This has the advantage that the decision includes hyperlinks to many of the other cases cited within each case:
Bank of N.Y. v. Gindele, APPEAL NO. C-090251, COURT OF APPEALS OF OHIO, FIRST APPELLATE DISTRICT, HAMILTON COUNTY, 2010 Ohio 542; 2010 Ohio App. LEXIS 462, February 19, 2010, Date of Judgment Entry on Appeal,  THESE ARE NOT OFFICIAL HEADNOTES OR SYLLABI AND ARE NEITHER APPROVED IN ADVANCE NOR ENDORSED BY THE COURT. PLEASE REVIEW THE CASE IN FULL.
http://scholar.google.com/scholar_case?case=12219306066245917937

Austin Nursing Ctr., Inc. v. Lovato, NO. 03-0659 , SUPREME COURT OF TEXAS, 171 S.W.3d 845; 2005 Tex. LEXIS 386; 48 Tex. Sup. J. 624, November 10, 2004, Argued , May 13, 2005, Delivered
http://scholar.google.com/scholar_case?case=6657464349540510451

Texas Ass'n of Business v. Texas Air Control Bd., NO. C-9556, SUPREME COURT OF TEXAS, 852 S.W.2d 440; 1993 Tex. LEXIS 22; 36 Tex. Sup. J. 607, March 3, 1993, Delivered
http://scholar.google.com/scholar_case?case=2619153071208352877

Gwaltney of Smithfield v. Chesapeake Bay Found., No. 86-473, SUPREME COURT OF THE UNITED STATES, 484 U.S. 49; 108 S. Ct. 376; 98 L. Ed. 2d 306; 1987 U.S. LEXIS 5030; 56 U.S.L.W. 4017; 9 Fed. R. Serv. 3d (Callaghan) 1029; 26 ERC (BNA) 1857; 18 ELR 20142, October 5, 1987, Argued , December 1, 1987, Decided ,  As Amended.
http://scholar.google.com/scholar_case?case=4589718656053559795

SIERRA CLUB v. MORTON, No. 70-34 , SUPREME COURT OF THE UNITED STATES, 405 U.S. 727; 92 S. Ct. 1361; 31 L. Ed. 2d 636; 1972 U.S. LEXIS 118; 3 ERC (BNA) 2039; 2 ELR 20192, November 17, 1971, Argued , April 19, 1972, Decided
http://scholar.google.com/scholar_case?case=15417249624067275504
*

But bear in mind the other adverse Supreme Court rulings in Kentucky and Maine clarifying different standing rules in those states. 
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William A. Roper, Jr.
The contrary Kentucky decision was that noted within the message thread "In Landmark KY Case, Pro Se Litigant Defeats Deutsche Bank, Court Find Lack of Standing"http://ssgoldstar.websitetoolbox.com/post?id=5100756 ) by The Equitable One (02/20/11 at 08:16 PM):
Harrison v. Leach, 2010-SC-000018-DGE, SUPREME COURT OF KENTUCKY, 323 S.W.3d 702; 2010 Ky. LEXIS 263, October 21, 2010, Rendered,  Released for Publication November 12, 2010.On remand at, Decision reached on appeal by Leach v. Harrison, 2011 Ky. App. LEXIS 46 (Ky. Ct. App., Mar. 11, 2011).
http://scholar.google.com/scholar_case?case=9311194211935526223

As discussed elsewhere within the thread cited above, pro se KY litigant Glenn Augenstein WON his Kentucky appeal on standing.  But this was because he correctly raised the issue in the trial court below.  Had he failed to raise the issue, the Harrison v. Leach decision seems to show that in Kentucky the borrower would have waived the issue.  This is a result which is similar to holdings in New York State.
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