Esposito v. United States

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
MAY 26 2004
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT

RAYMOND ELIO ESPOSITO,

Plaintiff-Appellant,

v. No. 03-3183

UNITED STATES OF AMERICA,

Defendant-Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
(D.C. No. 02-CV-2078-KHV)

Submitted on the briefs:

Pantaleon Florez, Jr., Topeka, Kansas, for Plaintiff-Appellant.

Eric F. Melgren, United States Attorney, Christopher Allman, Assistant
United States Attorney, Kansas City, Kansas, for Defendant-Appellee.

Before EBEL , BALDOCK , and LUCERO , Circuit Judges.

EBEL , Circuit Judge.
 INTRODUCTION

The deceased Raymond Elio Esposito, through his counsel, appeals from

the district court’s order dismissing his complaint for wrongful death filed

pursuant to the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671-80 (FTCA).

Mr. Esposito alleges that his death was the result of negligence by United States

government employees. The district court dismissed the suit because Mr.

Esposito is deceased and therefore lacks capacity to pursue an action for wrongful

death. It further denied the plaintiff’s motion to substitute Mr. Esposito’s

surviving wife as administratrix and plaintiff, reasoning that while his counsel

had made an “honest” mistake in naming a decedent as plaintiff, the mistake was

not an “understandable” one that would justify substitution under Fed. R. Civ. P.

17(a).

Rule 17(a) requires the district court to provide the party bringing an action

with a reasonable time after objection to substitute the real party in interest.

While the commentary to the Rule refers to “honest” and “understandable”

mistakes in naming the appropriate party, we have never barred a party from

substitution merely because his “honest” mistake was not also “understandable.”

The commentary to the Rule should not be applied in an overly formalistic

manner where, as here, the interests of justice may be compromised by failure to

grant leave to amend. We further reject the United States’ argument that the

-2-
attempted suit by a decedent was a nullity, and therefore provides nothing to

relate back to. We hold that the district court abused its discretion in denying

substitution of Mr. Esposito’s wife as plaintiff pursuant to Rule 17(a), based on

counsel’s failure to show that his “honest” mistake was also “understandable.”

We therefore reverse the order of dismissal, and remand for further proceedings.

FACTS

Mr. Esposito’s complaint recites that he died on March 12, 1999, while in

the custody of the United States Bureau of Prisons. The complaint alleges that his

death was the result of a negligent failure to provide him with adequate medical

attention during his incarceration at the United States Penitentiary in

Leavenworth, Kansas. On March 7, 2001, his surviving spouse, Yolanda

Esposito, filed an administrative tort claim for wrongful death with the Federal

Bureau of Prisons and Department of Justice. Aplt. App. at 90. The United

States denied her claim on August 23, 2001. Id. at 89.

Mrs. Esposito’s attorney filed this complaint for wrongful death on

February 22, 2002, the day before the six-month deadline for filing suit in federal

district court expired. Id. at 6; see 28 U.S.C. §§ 2401(b), 2675(a). In spite of the

fact that he had named Mrs. Esposito as the claimant in the administrative tort

claim, counsel named the late Mr. Esposito as the sole plaintiff in the federal

district court complaint. The United States responded with a motion to dismiss

-3-
for lack of subject matter jurisdiction, contending that the action was void and

a nullity. On March 7, 2003, the district court dismissed the action for lack of

subject matter jurisdiction, but granted counsel until March 17 to show cause why

the court should substitute Mrs. Esposito as the plaintiff.

Mr. Esposito’s attorney filed a response to the order to show cause, in

which he explained (1) that he made an honest mistake because he incorrectly

believed that only the person who suffered the harm was entitled to be named as

the plaintiff in the suit; (2) that this was his first wrongful death suit; and (3) that

the United States would not be prejudiced if Mrs. Esposito were substituted for

Mr. Esposito as plaintiff. The district court accepted the attorney’s

characterization of the mistake as “honest,” but found that he had failed to show

that the mistake was “understandable” so as to justify substitution of

Mrs. Esposito as plaintiff.

ANALYSIS

1. Standard of review

We review the district court’s dismissal for lack of subject matter

jurisdiction de novo , and its findings of jurisdictional facts, if any, for clear error.

Maestas v. Lujan , 351 F.3d 1001, 1013 (10th Cir. 2003). The district court’s

decision whether to join or substitute a party as a “real party in interest” under

Fed. R. Civ. P. 17(a) is reviewed for an abuse of discretion. Scheufler v.

-4-
Gen. Host Corp. , 126 F.3d 1261, 1270 (10th Cir. 1997); Metro. Paving Co. v.

Int’l Union of Operating Eng’rs , 439 F.2d 300, 306 (10th Cir. 1971).

2. Procedural difficulties occasioned by naming Mr. Esposito as

plaintiff

We first consider, briefly, whether substitution is in fact necessary or

whether the action can be pursued in the name of Mr. Esposito. We discern four

difficulties that must be overcome if this action is to go forward. First,

Mr. Esposito may lack capacity to maintain this suit in his own name. Second, as

a decedent he may no longer be the real party in interest. Third, he has never

filed an administrative claim in his own name. Fourth, Mrs. Esposito, the party

who did file an administrative claim, has not filed a timely action in federal

district court as required by 28 U.S.C. §§ 2401(b) and 2675(a). We consider each

of these difficulties in turn.

a. Capacity to sue

Federal Rule of Civil Procedure 17 governs both the determination of

a party’s capacity to sue and be sued and his or her status as the real party in

interest. The “real party in interest” principle requires that an action “be brought

in the name of the party who possesses the substantive right being asserted under

the applicable law.” 6A Charles A. Wright, Arthur R. Miller & Mary Kay Kane,

Federal Practice and Procedure § 1541 at 321 (2d ed. 1990) (hereinafter Federal

-5-
Practice & Procedure ). Capacity, by contrast, refers to “a party’s personal right

to litigate in a federal court.” Id. § 1542, at 327.

Rule 17(b) provides that issues of capacity are determined by the law of the

individual’s domicile. The parties do not dispute the district court’s

determination that Mr. Esposito was domiciled in Kansas and that Kansas law

should be applied to determine the question of capacity. Under Kansas law,

a decedent lacks capacity to sue or be sued. Cf. Moore v. Luther , 35 P.3d 277,

279 (Kan. Ct. App. 2001) (stating decedent cannot be sued). Therefore,

Mr. Esposito could not bring this action on his own behalf.

b. Real party in interest

Rule 17(a) provides that “[e]very action shall be prosecuted in the name of

the real party in interest.” Since Mr. Esposito could not bring this action, his

right had to be asserted, if at all, by a party on whom the right devolved at his

death. The identity of this real party in interest is determined by referring to the

governing substantive law. See 6A Federal Practice & Procedure § 1543, at 334;

Audio-Visual Mktg. Corp. v. Omni Corp. , 545 F.2d 715, 719 (10th Cir. 1976).

The FTCA governs Mr. Esposito’s wrongful death suit. Pursuant to the

FTCA, “[t]he United States shall be liable [with respect to] tort claims, in the

same manner and to the same extent as a private individual under like

circumstances,” 28 U.S.C. § 2674, “in accordance with the law of the place where

-6-
the act or omission occurred,” id. § 1346(b)(1). Ayala v. United States , 49 F.3d

607, 610 (10th Cir. 1995). We therefore look to Kansas law to determine who is

the proper party to bring a wrongful death action. See, e.g., Goodman v. United

States , 298 F.3d 1048, 1054 (9th Cir. 2002) (looking to state law to determine

appropriate party to bring wrongful death action under FTCA).

Kansas Statute Annotated § 60-1902 provides that the decedent’s heirs at

law are the appropriate parties to a wrongful death action:

The action may be commenced by any one of the heirs at law of the
deceased who has sustained a loss by reason of the death. Any heir
who does not join as a party plaintiff in the original action but who
claims to have been damaged by reason of the death shall be
permitted to intervene therein. The action shall be for the exclusive
benefit of all of the heirs who has [sic] sustained a loss regardless of
whether they all join or intervene therein, but the amounts of their
respective recoveries shall be in accordance with the subsequent
provisions of this article.

The district court thus had grounds to dismiss the action, purportedly

brought by Mr. Esposito. Only Mr. Esposito’s heirs at law were “real parties in

interest” entitled to bring the action.

c. Mr. Esposito’s failure to file a claim

A further difficulty, this time jurisdictional, is presented by Mr. Esposito’s

failure to file a timely administrative claim for his own wrongful death, as

required by 28 U.S.C. § 2675(a). Mr. Esposito has failed to exhaust his

-7-
administrative remedies and may not pursue this action in his own name.

See, e.g., Cadwalder v. United States , 45 F.3d 297, 300-02 (9th Cir. 1995).

d. Mrs. Esposito’s failure to file a timely suit

Finally, Mrs. Esposito, who did file an administrative claim for wrongful

death, failed to file suit within the six months provided by statute. “A district

court does not have jurisdiction to hear a tort claim against the United States

unless the claimant files a complaint in federal court within six months after final

agency decision.” Goodman , 298 F.3d at 1053. Therefore, as it was presented,

the district court lacked subject matter jurisdiction over this suit. 1

3. Substitution

The fact that Mr. Esposito cannot proceed with this suit does not end our

inquiry, however. Rule 17(a) requires the district court to grant leave to

substitute or join the real party in interest prior to dismissing an action for failure

to name the real party in interest:

1
Failure to name the real party in interest does not ordinarily create a
jurisdictional defect; the “real party in interest” issue may in fact be waived if the
defendant fails to present it in a timely fashion. FDIC v. Bachman , 894 F.2d
1233, 1235-36 (10th Cir. 1990). The issue of subject matter jurisdiction arises
here, however, because the FTCA acts as a limited waiver of sovereign immunity.
A party’s failure to file a timely suit strips the federal courts of subject matter
jurisdiction. See Goodman , 298 F.3d at 1053. Mrs. Esposito, the party properly
named in the administrative FTCA claim, did not file this suit within the period
provided by statute.

-8-
 No 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; and
such ratification, joinder, or substitution shall have the same effect as
if the action had been commenced in the name of the real party in
interest.

Fed. R. Civ. P. 17(a).

If Mrs. Esposito were substituted under this rule, it would solve each of the

problems identified above. See, e.g., Goodman , 298 F.3d at 1054 (holding FTCA

jurisdictional requirements satisfied in wrongful death action by substituting

husband in his individual capacity, who had filed timely administrative claim, for

husband in his capacity as personal representative of decedent’s estate, who had

not filed claim and could not bring wrongful death action under state law).

Rule 17(a) provides that the substitution “shall have the same effect as if the

action had been commenced in the name of the real party in interest.” The issue

before us, therefore, is whether the district court should have permitted Rule

17(a) substitution under the circumstances of this case.

a. “Understandable” mistake requirement

We review de novo the district court’s interpretation of the Federal Rules of

Civil Procedure. Butler v. Biocore Med. Tech., Inc. , 348 F.3d 1163, 1173

(10th Cir. 2003). Read literally, Rule 17(a) would appear to require that a party

always be given a reasonable time to substitute the real party in interest where

-9-
objection has been made. 2
Such a literal reading, however, would countenance

conduct in violation of the spirit of the Rules, such as filing suit in the name of

a fictitious party in the hope that the real party might at some future point be

identified. See 6A Federal Practice & Procedure § 1555, at 415. Courts have

therefore looked to the Advisory Committee Notes accompanying the Rule to

provide parameters for its application. See id. at 415-16; see also generally

United States v. Vonn , 535 U.S. 55, 64 n.6 (2002) (“In the absence of a clear

legislative mandate, the Advisory Committee Notes provide a reliable source of

insight into the meaning of a rule . . . .”); Schiavone v. Fortune , 477 U.S. 21, 31

(1986) (stating that “[a]lthough the Advisory Committee’s comments do not

foreclose judicial consideration of the Rule’s validity and meaning,” they are

entitled to weight in determining Congressional purpose).

2
The language in Rule 17(a) permitting substitution and relation back dates
to a 1966 amendment to the Rule. The amendment was originally developed to
apply to maritime actions with a very short statute of limitations where the
identity of the party entitled to sue can be difficult to determine. 6A Federal
Practice & Procedure § 1555, at 411. As adopted, however, the provision was
made applicable to all civil cases, on the basis that it was consistent with the
better-reasoned decisions in a variety of civil contexts. Id. at 411-12. Indeed, the
practice in this circuit, even prior to the amendment of the Rule, was to permit
substitution where necessary in the interests of justice. See Am. Fid. & Cas. Co.
v. All Am. Bus Lines, Inc. , 190 F.2d 234, 236-37 (10th Cir. 1951).

-10-
 The Advisory Committee Notes to the 1966 Amendment of Rule 17 specify

that substitution is required only where necessary to prevent a forfeiture or

injustice:

This provision keeps pace with the law as it is actually
developing. Modern decisions are inclined to be lenient when an
honest mistake has been made in choosing the party in whose name
the action is to be filed–in both maritime and nonmaritime cases.
See Levinson v. Deupree , 345 U.S. 648 (1953); Link Aviation, Inc. v.
Downs , 325 F.2d 613 (D.C. Cir. 1963). The provision should not be
misunderstood or distorted. It is intended to prevent forfeiture when
determination of the proper party to sue is difficult or when an
understandable mistake has been made. It does not mean, for
example, that, following an airplane crash in which all aboard were
killed, an action may be filed in the name of John Doe (a fictitious
person), as personal representative of Richard Roe (another fictitious
person), in the hope that at a later time the attorney filing the action
may substitute the real name of the real personal representative of a
real victim, and have the benefit of suspension of the limitation
period . . . . It is, in cases of this sort, intended to insure against
forfeiture and injustice–in short, to codify in broad terms the salutary
principle of [ Levinson ] and [ Link Aviation ].

Fed. R. Civ. P. 17 advisory committee’s note (1966 Amendment) (emphasis

added).

The district court relied on the language we have emphasized in the above

quotation to conclude that the party seeking substitution must demonstrate an

“understandable” mistake in naming the incorrect party plaintiff. Some courts

have indeed adopted this formulation of the requirement. See, e.g., Wieburg v.

GTE SW Inc. , 272 F.3d 302, 308 (5th Cir. 2001) (citing cases). In this circuit,

however, we have never required a plaintiff seeking substitution to show that his

-11-
mistake was “understandable” in addition to being “honest.” Instead, our cases

focus primarily on whether the plaintiff engaged in deliberate tactical

maneuvering (i.e. whether his mistake was “honest”), and on whether the

defendant was prejudiced thereby. See, e.g., Scheufler , 126 F.3d at 1270

(upholding district court’s joinder of real party in interest because plaintiff’s

failure to include certain parties “was not the result of some tactic designed to

prejudice defendant” and “there has been no tangible showing that defendant was

prejudiced by the joinder”); Metro. Paving , 439 F.2d at 306 (permitting

substitution of corporations for joint venture where “it was clear from the outset

that the three corporations were the real parties in interest” and “there was no

prejudice to the defendant,” even though applicable statute of limitations had run

at time of substitution). Interestingly, Metropolitan Paving suggests that even

a mistake that should have been patently obvious does not automatically foreclose

a later substitution, so long as the plaintiff did not act in bad faith and the

defendant has not been prejudiced thereby. 439 F.2d at 306.

A careful reading of the Rule 17(a) commentary cautions us against an

over-emphasis on the “understandability” of counsel’s mistake as a separate factor

in the analysis. The example given in the commentary of what is not an

“understandable” mistake–the deliberate naming of fictitious parties–is also

plainly not an “honest” mistake. It is therefore open to question whether the

-12-
commentary intended to ingraft a separate “understandability” requirement , in

addition to the “honest mistake” requirement , where the plaintiff committed an

otherwise honest mistake.

The commentary relies on two cases, Levinson v. Deupree , 345 U.S. 648

(1953) and Link Aviation, Inc. v. Downs , 325 F.2d 613 (D.C. Cir. 1963). Neither

of these cases imposes a requirement that the failure to name the “real party in

interest” in the initial complaint be “understandable.” Since the language of the

Rule itself does not impose a threshold requirement that a party’s mistake be

“understandable,” we should be wary of reading such a blanket requirement into

the Rule based on ambiguous language in the commentary.

We do not foreclose the possibility that a party’s mistake in naming the

plaintiff in a wrongful death action could be so inexplicable and irrational as to

raise an inference that it was not an “honest” mistake. See Advanced Magnetics,

Inc. v. Bayfront Partners, Inc. , 106 F.3d 11, 20 (2d Cir. 1997) (“[T]he district

court retains some discretion to dismiss an action where there was no semblance

of any reasonable basis for the naming of an incorrect party . . . .”). That

inference cannot be drawn in this case, however, because the district court has

already made a finding, supported by the evidence, that the mistake made was an

“honest” one. Aplt. App. at 135. That finding triggered the policy behind

Rule 17(a), which disfavors forfeiture. Advanced Magnetics , 106 F.3d at 20.

-13-
We therefore conclude that the district court abused its discretion in denying the

requested substitution based on the plaintiff’s failure to show an “understandable”

mistake.

b. Relation back to a “nullity”

The United States argues, however, that substitution and/or relation back

are unavailable in this case because the attempt to bring the case in the name of

a decedent was a nullity, which cannot be cured by substitution. The district

court rejected this proposition, which is re-urged on appeal as an alternative

ground for affirmance. There is very little authority on this point. Prior cases

denying substitution or relation back on a theory of “nullity,” however, are

distinguished from this case.

Banakus v. United Aircraft Corp. , 290 F. Supp. 259 (S.D.N.Y. 1968), is the

case most often cited for the “nullity” theory. In that case, the district court

denied motions by the decedent’s administratrix (1) to substitute herself for the

decedent in his suit for personal injuries and (2) to add a claim for wrongful

death. Id. at 260. The court noted that because the decedent had died thirty-five

minutes before his attorney filed his action seeking damages for personal injury,

his suit was a nullity. Id. It therefore could not be revived by substituting parties

and amending the complaint to add a claim for wrongful death. Id.

-14-
 Banakus involved a particular factual situation that is not present here. The

decedent’s original complaint in Banakus was for personal injury only and did not

include a cause of action for wrongful death. The court was not faced with

possible forfeiture of a wrongful death claim; it specifically stated that its holding

was without prejudice to the right of the administratrix to institute a separate

action for wrongful death. Id. The essential point of Banakus is that the

administratrix should not have attempted to revive an expired lawsuit for personal

injuries by injecting a new wrongful death claim; instead, she should have filed

her claim as a separate action. Because Banakus relied heavily on the

administratrix’s attempt to obtain amendment as well as substitution, and did not

address the forfeiture avoidance principles of Rule 17(a), we do not find it

persuasive on the substitution issue in this case.

Mizukami v. Buras , 419 F.2d 1319 (5th Cir. 1969) (per curiam), also

frequently cited in this context, is not on point here either. That case dealt with

an attempt to substitute the heirs of a defendant pursuant to Fed. R. Civ. P. 25,

rather than the heirs of a plaintiff under Rule 17(a). The same is true of Moul v.

Pace , 261 F. Supp. 616 (D. Md. 1966). We find none of these cases persuasive

on the issue confronting us here.

We do, however, find support in the federal rules for permitting

substitution notwithstanding Mr. Esposito’s lack of capacity at the time the suit

-15-
was filed. As the district court pointed out, nothing in Rule 17(a) requires that

the original plaintiff have capacity to sue. The fact is, Rule 17(a) does more than

merely provide a relation back principle. It provides that substitution “shall

have the same effect as if the action had been commenced in the name of the

real party in interest.” Fed. R. Civ. P. 17(a) (emphasis added). 3
Rule 17(a) is

designed to prevent forfeitures, and as such must be given broad application.

See Fed. R. Civ. P. 17 advisory committee’s notes (1966 Amendment) (stating

Rule 17(a) is “intended to insure against forfeiture and injustice” by codifying

“in broad terms” prior law permitting substitution notwithstanding running of

limitations statute). We conclude that Mr. Esposito’s lack of capacity at the time

the suit was filed does not prevent the substitution from relating back to the date

the suit was filed under Rule 17(a).

c. Prejudice to the United States

Finally, the United States argues that substitution should be denied because

it has been prejudiced. The typical grounds for prejudice are absent, since the

United States had actual notice of Mrs. Esposito’s claim against it once she filed

an administrative tort claim. The United States relies instead on the delay caused

3
As noted above, this case presents an attempt to substitute the real party
in interest under Rule 17, and not an attempt to amend a complaint under
Fed. R. Civ. P. 15. We do not, therefore, address the effect of Rule 15 on the
issue presented here.

-16-
by Mrs. Esposito’s failure to move for substitution earlier in the action and it

points, inter alia , to plaintiff’s failure to provide discovery and to designate an

expert witness on medical care issues. Aplee. Br. at 41-43. Nothing in our

decision should be viewed as prohibiting the United States from raising these

issues or as prohibiting the district court from taking appropriate action in

response to them. Nor do we hold that substitution should relieve plaintiff of any

deadlines previously established in this case. These are matters to be considered

on remand by the district court.

The judgment of the district court is REVERSED and the case is

REMANDED for further proceedings in accordance with this opinion.

-17-