[¶ 1] Trefren Construction Co. (Trefren Construction) appeals the district court's denial of its motion to substitute the real party in interest and the district court's grant of summary judgment to Defendants, V&R Construction, LLC, and Cocca Development, Ltd. We find the district court erred in dismissing the complaint for lack of subject matter jurisdiction, abused its discretion in denying the motion to substitute, and erred in prematurely ruling on the merits of the parties' contract claims. We therefore reverse.
[¶ 2] Although Trefren Construction presents a number of issues on appeal, we find the dispositive issues to be:
[¶ 3] Prior to his death on April 23, 2015, Timothy N. Trefren owned Trefren Construction and operated it as a sole proprietorship. Trefren Construction was based in Thayne, Wyoming, and was managed by Timothy N. Trefren and his son, Timothy R. Trefren. Defendant V&R Construction, LLC (V&R) is an Ohio limited liability company, and Defendant Cocca Development, Ltd. (Cocca) is an Ohio limited partnership. Cocca is a member of V&R.
[¶ 4] Cocca owned real property in Afton, Wyoming, on which it desired to construct a Shopko retail establishment. Cocca entered into a contract with V&R, by which V&R was to act as general contractor in the construction of the Shopko building. In turn, V&R, on May 31, 2013, entered into a subcontract with Trefren Construction, by which it agreed to pay Trefren Construction $458,850.00 to complete site preparation and excavation for the project. On June 30, 2013, V&R entered into another subcontract with Trefren Construction, by which it agreed to pay Trefren Construction $145,000.00 for erection of an approximately 36,000 square foot pre-engineered metal building on the site.
[¶ 5] In October and November 2013, Trefren Construction billed V&R for amounts still owing on both the site preparation/excavation contract and the building erection contract. On May 15, 2014, it again submitted a billing to V&R for these amounts, and on July 30, 2014, its counsel sent a demand letter to both Cocca and V&R for the amounts owing. The amounts owing on the contracts were not paid, and on September 19, 2014, Trefren Construction filed a complaint against V&R and Cocca in the Third Judicial District Court in Lincoln County. The complaint asserted both contract and non-contract claims and requested damages in the amount of $115,560.53, plus prejudgment interest. V&R and Cocca (collectively Defendants) filed an answer and counterclaims, and the litigation thereafter proceeded through discovery and an unsuccessful mediation, with a trial date scheduled for January 19, 2016.
[¶ 6] On November 20, 2015, Defendants filed a motion to dismiss. Defendants' motion directed the district court to Paragraph One of Trefren Construction's complaint, which alleged, "Plaintiff is a Wyoming Corporation with its principal place of business located in the Town of Thayne, County of Lincoln, State of Wyoming." Defendants' motion then asserted that during a telephone conversation with a non-party, defense counsel was told Trefren Construction is not a Wyoming corporation, and upon investigation, Defendants confirmed that all corporations associated
[¶ 7] Based on this information, Defendants further asserted (citations to exhibits omitted):
[¶ 8] Defendants attached to their motion to dismiss the relevant page of Trefren Construction's complaint and the signature pages of the parties' contracts, which contracts had been attached to the complaint. Defendants also attached several documents downloaded from the website for the Wyoming Secretary of State's Office and an affidavit from defense counsel's legal assistant concerning the downloaded documents and her contact with the Secretary of State's Office.
[¶ 9] On November 23, 2015, three days following the filing of Defendants' motion to dismiss, Trefren Construction filed a Motion for Substitution of Party pursuant to W.R.C.P. 25(a), which rule governs substitutions upon the death of a party. The motion stated, in part:
[¶ 10] Defendants opposed the motion to substitute the Estate of Timothy Nelson Trefren (the Estate) as plaintiff, arguing Rule 25(a) did not apply because no party to the action had died. They also asserted they would be prejudiced by the substitution because had they known Trefren Construction was not a corporation, they would have asserted additional claims for breach of fiduciary duty, conflict of interest, and breach of contract.
[¶ 11] On December 2, 2015, the district court entered an order vacating the January 19, 2016 trial date and setting deadlines for briefing on Defendants' motion to dismiss. In
[¶ 12] In arguing against Defendants' motion to dismiss, Trefren Construction took the position that W.R.C.P. 17(a) was, under the circumstances, not a ground for dismissal but was instead a basis for substituting the Estate. Trefren Construction argued that whether viewed singularly or in combination, Rules 17(a), 21, 25 and 15(a) "readily allow the substitution of The Estate of Timothy N. Trefren as the real party in interest in this case." In support of this argument, Trefren Construction attached an affidavit by Timothy R. Trefren, the son of decedent, Timothy N. Trefren. That affidavit stated, in part:
[¶ 13] On December 28, 2015, Defendants filed their opposition to Trefren Construction's motion for leave to amend its complaint. Defendants argued they would be prejudiced by the amendment in that had they known Trefren Construction was a sole proprietorship, they would have approached the litigation differently and would have asserted additional claims against the entity. On the same date, Defendants also filed a reply in support of their motion to dismiss, again asserting they would be prejudiced by a substitution of the parties.
[¶ 14] On February 9, 2016, the district court entered an Order Denying Motion for Substitution of Party, Denying Motion for Leave to Amend Complaint, and Granting Defendants' Motion for Summary Judgment. The court found Rule 25(a) inapplicable because no party to the action had died and on that basis denied Trefren Construction's Rule 25(a) motion. The court denied Trefren Construction's motion to amend based on its findings that the motion was not timely and amendment of the complaint would not serve the interests of justice. The court did not address Trefren Construction's argument that substitution of the Estate as plaintiff was proper under Rule 17(a).
[¶ 15] In addressing Defendants' motion to dismiss, the district court observed that Defendants had not cited to a specific rule upon which they based their motion, but the Court viewed the motion as a Rule 17(a) challenge to the named plaintiff as the real party in interest. The court also noted that it had converted Defendants' motion to dismiss to a summary judgment motion because the court
[¶ 16] With respect to the real party in interest question, the district court found that because there was no existing Wyoming corporation by the name of Trefren Construction Co., the named plaintiff was a non-existent entity and could not be the real party in interest. The court then concluded that because the named plaintiff was not the real party in interest, the complaint had to be dismissed for lack of subject matter jurisdiction.
[¶ 17] The district court thereafter deviated from the real party in interest question and turned to an analysis of the enforceability of the parties' contracts, specifically whether the parties had a meeting of the minds when they entered into their contracts and whether Trefren Construction had perpetrated a material misrepresentation upon Defendants. The court found that: 1) no contract could be formed because Trefren Construction did not exist as a corporate entity and the parties therefore could not have had a meeting of the minds; and 2) Trefren Construction Co. perpetrated a material misrepresentation upon Defendants, which made the contracts voidable. The court then summarized its ruling on Defendants' motion to dismiss/summary judgment motion with the following:
[¶ 18] Trefren Construction timely filed a notice of appeal to this Court.
STANDARD OF REVIEW
[¶ 19] This Court reviews summary judgment orders de novo. Snell v. Snell, 2016 WY 49, ¶ 18, 374 P.3d 1236, 1240 (Wyo. 2016). We have explained:
Snell, ¶ 18, 374 P.3d at 1240.
[¶ 20] We will address the district court's rulings dismissing the complaint for lack of
[¶ 21] We have outlined the circumstances under which an appeal must be dismissed as moot:
In re CRA, 2016 WY 24, ¶¶ 25-26, 368 P.3d 294, 300 (Wyo. 2016).
[¶ 22] Defendants assert that the Estate has filed a new action against Defendants asserting claims identical to those alleged in the dismissed complaint, and the Estate does not dispute that allegation. Based on that filing, Defendants contend that any decision by this Court concerning the dismissed complaint will have no impact on the parties' dispute. We disagree.
[¶ 23] Trefren Construction has asked that this Court reverse the district court's decision denying substitution of the Estate as the real party in interest. If we grant that relief, Trefren Construction's original complaint would be reinstated and, with the Estate substituted as Plaintiff, the parties would pick up where they left off. Although Defendants contend the substitution itself will create delays due to pleading amendments and additional discovery, we would not anticipate that any such delays would be as lengthy as
[¶ 24] Additionally, Trefren Construction has asked that this Court reverse the district court's ruling concerning contract formation and enforceability. While the district court's order did purport at times to apply only to the named plaintiff in the case before it, the court's ruling was otherwise couched in terms that would undoubtedly impair, or at least complicate, any contract claim asserted by the Estate. For example, the court ruled:
[¶ 25] Because both the parties' contracts appear to be signed by Timothy N. Trefren, now deceased, it may be difficult for the Estate to escape these contract findings.
[¶ 26] For these reasons, we reject Defendants' request that this appeal be dismissed as moot.
District Court Rulings
Real Party in Interest
[¶ 27] Rule 17 of the Wyoming Rules of Civil Procedure requires that an action be brought by the real party in interest. It provides, in relevant part:
W.R.C.P. 17(a) (LexisNexis 2015) (emphasis added).
[¶ 28] The district court found that Trefren Construction, as named in the complaint, was not the real party in interest, and neither party disputes that finding. The court did not make a finding as to the identity of the real party in interest, but the parties appear to agree that the Estate is the real party in interest.
Dismissal for Lack of Jurisdiction
[¶ 29] The district court found that "[w]hen Plaintiff asserted its cause of action, it was a dissolved corporate entity without the legal possibility of revival." The court also rejected Trefren Construction's argument that a dissolved corporation may bring an action. The court concluded:
[¶ 30] Trefren Construction argues this ruling, which suggests that dismissal must follow when an action is not brought in the name of the real party in interest, is contrary to the plain terms of Rule 17(a). We agree.
[¶ 31] Rule 17(a) directs that "[n]o 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 ratification of commencement of the action by, or joinder or substitution of, the real party in interest." W.R.C.P. 17(a). Thus, not only does Rule 17(a), by its plain terms, not mandate dismissal when an action is not prosecuted in the name of the real party in interest, but it expressly requires the opposite — that the court allow a reasonable time to cure the defect through ratification, joinder or substitution.
[¶ 32] The fact that a dissolved corporation, without the capacity to sue, may have been the named plaintiff has no bearing on the requirement that a reasonable time be allowed for substitution. Even assuming a named plaintiff lacks the capacity to sue, substitution remains an available mechanism to cure the defect in naming the real party in interest. Esposito v. U.S., 368 F.3d 1271, 1277-78 (10th Cir. 2004).
Esposito, 368 F.3d at 1277-78 (footnote omitted); see also Russell v. Sullivan, 2012 WY 20, ¶ 22, 270 P.3d 677, 682-83 (Wyo. 2012) (relying on Esposito Rule 17(a) relation-back analysis to allow joinder of petitioner to will contest where original petitioners lacked standing and action without such joinder would have been a nullity).
[¶ 33] Having concluded that Rule 17(a) did not mandate dismissal, we turn to the district court's determination that dismissal was required because the real party in interest requirement is jurisdictional. Our Court has a line of decisions holding, as the district court ruled, that the real party in interest requirement is jurisdictional. McNeiley v. Ayres Jewelry Co., 886 P.2d 595, 600 (Wyo. 1994); Mari v. Rawlins Nat'l Bank of Rawlins, 794 P.2d 85, 88 (Wyo. 1990); Greenough v. Prairie Dog Ranch, Inc., 531 P.2d 499, 500 (Wyo. 1975); Wyoming Wool Marketing Ass'n v Urruty, 394 P.2d 905, 908 (Wyo. 1964); Gardner v. Walker, 373 P.2d 598, 599 (Wyo. 1962). We also, however, have a line of decisions holding that a real party in interest defense or objection is waived if it is not timely raised, implying that the requirement is not jurisdictional. Shepard v. Beck, 2007 WY 53, ¶ 10, 154 P.3d 982, 986 (Wyo. 2007); Action Bailbonds v. State, 2002 WY 103, ¶ 8, 49 P.3d 992, 994 (Wyo. 2002); Cockreham v. Wyoming Production Credit Ass'n, 743 P.2d 869, 874 (Wyo. 1987); Gifford-Hill-Western, Inc. v. Anderson, 496 P.2d 501, 502 (Wyo. 1972). We take this opportunity to resolve this conflict and hold, consistent with our more recent decisions, that the real party in interest requirement is not jurisdictional.
[¶ 35] Our decisions holding a real party in interest objection can be waived have reasoned that the issue must first be raised before the district court in order to comply with Rule 17(a)'s requirement that the named plaintiff be given an opportunity for ratification, joinder, or substitution. Action Bailbonds, ¶ 8, 49 P.3d at 994; Cockreham, 743 P.2d at 874. We agree with these practical considerations. Additionally, we can discern no basis to find the real party in interest requirement jurisdictional.
[¶ 36] "A court has subject matter jurisdiction when it has the authority to consider and decide `cases of the general class of which the proceeding belongs.'" Linch v. Linch, 2015 WY 141, ¶ 17, 361 P.3d 308, 313-14 (Wyo. 2015) (quoting Brush v. Davis, 2013 WY 161, ¶ 9, 315 P.3d 648, 651 (Wyo. 2013)). The real party in interest requirement serves to protect a "defendant from the vexation of a multiplicity of actions, with the possible burden of multiple recoveries, all emanating from the same cause." Vargas Ltd. Partnership v. Four H Ranches Architectural Control Committee, 2009 WY 26, ¶ 12, 202 P.3d 1045, 1051 (Wyo. 2009) (quoting Mari, 794 P.2d at 88). While the requirement serves an important function, it does not speak to a court's jurisdiction or limit a court's power to hear a matter. See Lincoln Property Co. v. Roche, 546 U.S. 81, 90, 126 S.Ct. 606, 613, 163 L.Ed.2d 415 (2005) (Rule 17(a) addresses party joinder not subject matter jurisdiction); K-B Trucking Co. v. Riss Intern. Corp., 763 F.2d 1148, 1153, n.2 (10th Cir. 1985) ("The real party in interest defense may be waived if it is not timely raised.").
[¶ 37] For these reasons, we hold that the real party in interest requirement is not jurisdictional. To the extent our cases hold otherwise, they are hereby overruled.
[¶ 38] Having concluded that neither Rule 17(a) nor jurisdictional limits necessarily mandated dismissal of Trefren Construction's complaint, we must next address whether the district court erred in denying Trefren Construction's motion to substitute the real party in interest. It is our resolution of that question that will determine whether the complaint was in the end properly dismissed. If the substitution was properly denied, then the dismissal for failure to bring the action in the name of the real party in interest would necessarily follow. If we find the substitution should have been permitted, that substitution will cure the complaint's defect, making dismissal improper.
Denial of Motion to Substitute
[¶ 39] While it is Rule 17(a) that addresses the requirement that an action be brought by the real party in interest, Trefren Construction sought to have the Estate substituted as the real party in interest first through a Rule 25 motion to substitute and then alternatively through a Rule 15 motion to amend the complaint. Trefren Construction also, however, asserted Rule 17(a) as a basis for allowing the substitution, arguing that "considering Rule 17(a) in conjunction with Plaintiff's previously filed Motion for Substitution of Party, the remedy required here is the substitution of The Estate of Timothy N. Trefren as the real party in interest." Since Rule 17 is the controlling rule with respect to a real party in interest analysis, and Trefren Construction effectively invoked the rule as the basis for its substitution motion, we begin our review with the district court's Rule 17 ruling rather than
[¶ 40] Although Rule 17(a) mandates that an action not be dismissed until a reasonable time has been allowed for substitution of the real party in interest, the district court's decision whether to allow the substitution is a decision we review for an abuse of discretion. Esposito, 368 F.3d at 1273. To the extent our review of the district court's Rule 17(a) ruling requires interpretation of the rule, our review is de novo. Russell, ¶ 13, 270 P.3d at 680.
[¶ 41] This Court has not previously had occasion to address the denial of a Rule 17(a) motion to substitute and we therefore look once again to federal authority. The Tenth Circuit, drawing on the advisory committee notes to the federal rule, has held that the factors to be considered in deciding a motion to substitute are: 1) whether the mistake in naming the plaintiff was an honest mistake and not the result of "deliberate tactical maneuvering;" and 2) whether the defendant or defendants will be prejudiced by the substitution. Esposito, 368 F.3d at 1276.
[¶ 42] The district court did not expressly address Trefren Construction's motion to substitute as a Rule 17(a) motion, but the court did make the following finding:
[¶ 43] With respect to the timeliness of the motion to substitute, Trefren Construction argues that the district court measured the delay in its filing of the motion to substitute from the wrong date. We agree. Rule 17(a) requires that an action not be dismissed "until a reasonable time has been allowed
[¶ 44] With respect to whether the mistake in naming the plaintiff was an honest mistake, Trefren Construction submitted the affidavit of Timothy R. Trefren. Through that affidavit, Timothy R. Trefren attested that when the action was originally filed, it was his understanding that his father had operated Trefren Construction as a corporation and that he believed it was still a corporation at the time the complaint was filed. He further stated that based on that belief, he told the attorney who prepared and filed the complaint that the business was operated as a corporation. In Defendants' opposition to the motion to substitute, they argued they had been ambushed by the late-hour change in Trefren Construction's business status, but they offered no evidence in support of that claim and no evidence to show some type of tactical maneuvering by Trefren Construction. The district court made no findings concerning Trefren Construction's motivation, but we are satisfied, based on the only evidence on the question, that the mistake in identifying Trefren Construction as a corporation was an honest mistake.
[¶ 45] With respect to the final factor, whether the substitution will prejudice Defendants, the district court stated in general
[¶ 46] In most particulars, the case remains much the same with the substitution of the Estate as the named plaintiff: the same fact witnesses; the same contracts; the same project; the same work completed; the same alleged defects in the work; and the same payments made and not made. To the extent Defendants make a showing that additional discovery is required, the district court has the discretion to rule on a request for additional discovery. Likewise, if Defendants are able to show a factual basis for additional counterclaims and affirmative defenses, the district court has the discretion to rule on a motion to amend Defendants' pleadings. The alleged prejudice is not sufficient to justify denial of the motion to substitute. See Scheufler v. General Host Corp., 126 F.3d 1261, 1270 (10th Cir. 1997) (finding no tangible prejudice in Rule 17(a) joinder where defendant was given opportunity to conduct discovery on possible defenses to joined parties' claims).
[¶ 47] Under these circumstances, we conclude that the district court abused its discretion under Rule 17(a) when it denied Trefren Construction's motion to substitute the Estate as the real party in interest. Having concluded that the substitution should have been permitted under Rule 17(a), we need not address the court's Rule 15 and Rule 25 rulings.
Summary Judgment on Contract Enforceability
[¶ 48] After ruling that the complaint had to be dismissed because it was not brought in the name of the real party in interest, the district court made an additional ruling that Defendants were entitled to judgment as a matter of law because the parties' contracts were voidable. The court summarized its findings in support of that ruling as follows:
[¶ 49] The district court also made the following findings in support of its summary judgment ruling:
[¶ 50] Rule 56 allows entry of summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." W.R.C.P. 56(c) (LexisNexis 2015). We have also said:
Amos v. Lincoln County School Dist. No. 2, ¶ 15, 359 P.3d 954, 958 (2015) (quoting Johnson v. Dale C. and Helen W. Johnson Family
[¶ 51] The most fundamental flaw in the district court's ruling is that Defendants did not move for summary judgment on the ground that the parties' contracts were voidable and they submitted no evidence on that question. Indeed, Defendants had asserted no such claim in their answer, affirmative defenses, or counterclaims. That this claim had not been made prior to the district court's entry of summary judgment is clear from Defendants' opposition to Trefren Construction's motion to substitute. Defendants asserted in that opposition that had they known the case was being brought by a sole proprietorship, they would have approached the case differently and would have "looked closely" at claims of misrepresentation and "perhaps fraud in the inducement of the contract." Defendants also stated "they would have considered filing a motion for summary judgment based on what they perceive as misrepresentations concerning Mr. Trefren's statements concerning the status of a corporation and his inducement of the contract."
[¶ 52] Plainly, Trefren Construction had no notice that a claim that the parties' contracts were voidable would be considered by the district court as a basis for entering an order of summary judgment in favor of Defendants. Moreover, since Defendants had made no prima facie showing that the parties' contracts were voidable, Trefren Construction was under no obligation to submit evidence on the question. Most particularly, Trefren Construction had no opportunity or reason to submit evidence defending against the allegation that it represented itself as a corporation during contract negotiations. The district court's summary judgment ruling that the contracts were voidable was thus procedurally infirm and unsupported by a showing of undisputed material facts.
[¶ 53] We conclude that the district court erred in dismissing the complaint for lack of subject matter jurisdiction, and in so ruling, we overrule our prior decisions holding that the real party in interest requirement is jurisdictional. We further conclude that the district court abused its discretion in denying Trefren Construction's motion to substitute and erred in granting summary judgment to Defendants on the enforceability of the parties' contract claims. We reverse and remand for proceedings in accordance with these holdings.
We agree that in this case there was certainly confusion in how the matter proceeded before the district court. Defendants filed a motion to dismiss, to which they attached an affidavit and other materials, but they did not identify the rule under which they were filing the motion. The record contains no indication the district court notified the parties it was converting the motion to one for summary judgment, and given the ambiguity in Defendants' motion, it is not clear that a conversion was automatic. The court did, however, set a schedule giving both parties an opportunity to provide any briefing they wished the court to consider, and in providing its briefing on the motion to dismiss, Trefren Construction submitted an affidavit and other materials outside the pleadings. While the conversion should have been handled with more clarity, we are satisfied that Trefren had an opportunity to respond, at least with respect to the issue of the real party in interest. As we will discuss hereafter, notice on the contract enforceability question was wholly inadequate, but our reversal of that aspect of the district court's decision is unaffected by the standard of review we employ.