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McLeod-Wisienski v. Doe

United States District Court, E.D. Michigan, Southern Division

July 26, 2019




         Plaintiff has sued individuals in the Wayne County Sheriff's Office, employees of Wayne County Jail, and Wayne County itself to recover for injuries she sustained when she fell from the top bunk in her cell in Wayne County Jail on July 20, 2015. Complaint, ECF No. 1. Plaintiff filed her initial Complaint on May 25, 2018. On July 20, 2018, she filed a second Complaint without identifying the first case as a potential companion. No. 18-12291, ECF No. 1. Defendant filed a Motion to Consolidate and Dismiss the cases, which the Court granted in part by consolidating the cases on January 15, 2019. ECF No. 11. That order designated this case number, 18-11671, as the lead case and directed Plaintiff to amend her complaint and serve any defendants who had not yet been served. Plaintiff filed her amended complaint on January 17, 2019. ECF No. 13.

         Defendants then filed a second Motion to Dismiss. ECF No. 15. Prior to hearing the Motion to Dismiss, the Court called a status conference with the parties to discuss the relationship between Plaintiff's prior bankruptcy court action and this case. Based on that conference, Plaintiff filed a Motion to Substitute the Bankruptcy Trustee as Plaintiff. ECF No. 24. Based on the reasoning below, the Court now GRANTS Plaintiff's Motion to Substitute and DENIES as moot Defendant's Motion to Dismiss.

         I. Facts

         In July 2016, Plaintiff filed for Chapter 7 bankruptcy. In re McLeod-Wisienski, No. 16-49703 (Bankr. E.D. Mich. Dec. 8, 2016). Defendant alleges-and Plaintiff admits-that, in her bankruptcy schedules, she did not disclose her potential legal claim that arose on July 20, 2015, when she suffered the injuries underlying this case. The relevant schedule asks whether the individual filing for bankruptcy has any “[c]laims against third parties, whether or not [she has] filed a lawsuit or made a demand for payment.” Plaintiff answered “no” to this question. ECF No. 15-2 PageID.435.

         On February 27, 2019, the bankruptcy court granted Plaintiff's request to reopen the bankruptcy proceeding to report the undisclosed asset of her legal claim against Wayne County. No. 16-49703, ECF No. 32. The appointed trustee then filed a Report of Undisclosed Assets, ECF No. 36, and notified all creditors of the assets, ECF No. 38. The bankruptcy court issued an order authorizing the trustee, Michael Stevenson, to employ special counsel to pursue the Plaintiff's claim, ECF No. 44. The trustee designated counsel in this case, Romano Law, to serve as the special counsel. Id.

         II. Analysis

         a. McLeod-Wisienski has standing despite not being the real party in interest

         Defendant first contends that Article III of the Constitution prevents the Court from considering Plaintiff's motion to substitute the trustee as plaintiff. This argument improperly conflates standing doctrine with real party in interest doctrine. While “[s]tanding involves a determination whether the plaintiff can show an injury in fact traceable to the conduct of the defendant, ” “the real party in interest principle is a means to identify the person who possesses the right sought to be enforced.” Firestone v. Galbreath, 976 F.2d 279 (6th Cir. 1992) (internal quotation marks omitted).

         In this case, Ms. McLeod-Wisienski suffered an injury in fact- falling from a bunk in jail. She alleges that this injury is traceable to Defendant's conduct. She therefore has standing to bring this action. But the question for purposes of Plaintiff's motion to substitute is whether Ms. McLeod-Wisienski is the real party in interest with the capacity to bring the claim. All parties agree that she is not-hence this motion to substitute the trustee of her bankruptcy estate as Plaintiff in the matter. Because Ms. McLeod-Wisienski has standing on her own, the Court is not precluded from considering the motion to substitute.

         b. Fed.R.Civ.P. 17 permits substitution of the bankruptcy trustee

         Pursuant to Fed.R.Civ.P. 17(a)(3), “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.” Courts use the Advisory Note to Rule 17 to determine whether motions to substitute real parties in interest should be granted. E.g. Zurich Ins. Co. v. Logitrans, Inc., 297 F.3d 528, 532 (6th Cir. 2002). The Advisory Note speaks to the Rule's intent. Rule 17 “is intended to prevent forfeiture when determination of the proper party to sue is difficult or when an understandable mistake has been made.” Id. (quoting Fed.R.Civ.P. 17 advisory committee's notes). Defendant's opposition to substitution arises from two points, set forth below.

         First, Defendant argues that Plaintiff excessively delayed seeking substitution. Defendant argued in its first Motion to Dismiss, filed on September 27, 2018, that the trustee of Plaintiff's estate was the proper party in interest.[1] Plaintiff did not seek to substitute the trustee until June 3, 2019-nine months later-though she began the process of adding the legal claim to her estate to authorize the trustee to pursue it in February 2019. Courts in this district conduct a fact-specific inquiry to determine whether putative substituted plaintiffs are seeking substitution within a “reasonable time” after the defendant's objection under Fed.R.Civ.P. 17. E.g. Hilgraeve Corp. v. Symantec Corp., 212 F.R.D. 345, 349 (E.D. Mich. 2003). This analysis includes whether the defendant will suffer prejudice from permitting substitution. Id.; see also White House Servs. v. Allstate Ins. Co., No. 17-CV-12672, 2018 WL 6527693, at *5 (E.D. Mich. Dec. 12, 2018).

         In this case, although there was some delay between Plaintiff's awareness of the defect in her pleading and her motion to substitute the trustee in her place, that delay was reasonable. Reopening the bankruptcy proceeding and adding this legal claim to Ms. McLeod-Wisienski's estate took some time. Ms. McLeod-Wisienski has now completed this process. Defendant will not suffer significant prejudice given that this case is still in an early stage of litigation. In addition, substituting the ...

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