Frontier Leasing Corporation, Assignee From C & J Vantage Leasing, Assignor Vs. Treynor Recreation Area

• Court: Supreme Court of Iowa
• Decided: March 19, 2010
• Docket: 09–0123
• Status: Published

Opinion

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. 2

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 3

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 AFFIRMED, AND CASE

REMANDED.

This opinion shall not be published.