FRONTIER LEASING CORPORATION, Assignee From C & J VANTAGE LEASING, Assignor vs. TREYNOR RECREATION AREA
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IN THE SUPREME COURT OF IOWA
No. 09–0123
Filed March 19, 2010
FRONTIER LEASING CORPORATION, Assignee From
C & J VANTAGE LEASING, Assignor,
Appellant,
vs.
TREYNOR RECREATION AREA,
Appellee.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Polk County, Eliza J. Ovrom,
Judge.
Further review of court of appeals’ decision finding assignments of
lease invalid and requiring substitution of real party in interest. DECISION
OF COURT OF APPEALS VACATED IN PART; DISTRICT COURT
JUDGMENT CONDITIONALLY AFFIRMED, AND CASE REMANDED.
Edward N. McConnell and Aaron H. Ginkens of Ginkens & McConnell,
P.L.C., Clive, for appellant.
A.W. Tauke of Porter, Tauke & Ebke, Council Bluffs, for appellee.
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PER CURIAM.
The appellant, Frontier Leasing Corporation (Frontier), seeks to recover
for the default of the appellee, Treynor Recreation Area (Treynor), under an
equipment lease between Treynor and C and J Leasing Corporation.
Frontier alleged it had been assigned the lease through a series of
assignments involving various entities. At issue is not only the validity of
these assignments, but also the identity of the real party in interest holding
the right to seek recovery for the default.
The case went to trial and the
district court dismissed the petition on the grounds that, because of errors
in the chain of assignment, Frontier was not the real party in interest.
Frontier appealed, and the court of appeals affirmed the district court’s
judgment. In so doing, the court of appeals stated:
[Because of errors in the chain of assignment,] Frontier has no
enforceable interest in the lease and is not the real party in
interest. 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.
Without deciding the merits of whether the real party in interest
should be substituted under Iowa Rule of Civil Procedure 1.201, we hold
that Treynor should have an opportunity to show prejudice by any
substitution. Estate of Kuhns v. Marco, 620 N.W.2d 488, 495 (Iowa 2000)
(discussing Iowa Rules of Civil Procedure 2 and 69(c), now rules 1.201 and
1.402(5), and stating that “the defendant should be given an opportunity to
show prejudice in the event that notice of the misnamed party adversely
impacted the policy considerations of the statute of limitations”); see also
Richardson v. Clark Bros., 202 Iowa 1371, 1372, 212 N.W. 133, 134 (1927)
(holding that substitution of the plaintiff should be allowed, unless
defendant is thereby prejudiced). Thus, we vacate the portion of the court of
appeals’ decision instructing the district court to allow for a reasonable
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period of time for substitution of the real party in interest. On remand, the
district court shall determine whether substitution of the real party in
interest is appropriate, and, if so, the reasonable timing of such substitution.
If the district court determines substitution is warranted, then the
court should consider the case on its merits. If, however, the district court
determines substitution is not appropriate, the judgment shall stand. See,
e.g., In re R.E.K.F., 698 N.W.2d 147, 151 (Iowa 2005) (conditionally affirming
the termination of father’s parental rights pending determination pursuant
to Iowa ICWA that child is not eligible for tribal membership).
DECISION OF COURT OF APPEALS VACATED IN PART; DISTRICT
COURT
JUDGMENT
CONDITIONALLY
REMANDED.
This opinion shall not be published.
AFFIRMED,
AND
CASE
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