PAUL A. SCHMIDT, APPELLANT,
v.
JOHN P. MUELLER ET AL., APPELLEES
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Appellant Schmidt sued for a real estate commission, but the trial court dismissed the action because Schmidt had incorporated his business and allegedly the real party in interest—his new corporation—was not before the court. The appellate court reversed, holding that Florida Rules of Civil Procedure permitted the action to continue in Schmidt's name or alternatively to allow substitution/joinder of the corporation.
The trial court erred in dismissing the action. Once the court concluded a transfer of interest had occurred, it had two alternatives under Rule 1.260(c): allow the action to continue in the original plaintiff's name, or allow the corporation to be substituted or joined as a party. Neither dismissal nor finding that a motion to substitute was "too late" was proper.
[1] An action may be continued by or against the original party after a transfer of interest, unless the court orders substitution or joinder of the transferee.
[2] A trial court abuses its discretion by dismissing an action solely because the real party in interest has not been formally substituted when the action could have continu…
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Join FLexlaw to unlock all legal intelligence“Rule 1.260(c), RCP, provides: "(c) Transfer of Interest. In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party."”
Establishes the procedural rule that governs the situation where a party's interest in a cause of action transfers to another entity, permitting the court to choose among multiple options.
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Join FLexlaw to unlock all legal intelligenceSchmidt, a real estate agent, sued the Muellers for a real estate commission and sued Gram for interfering with his contractual relationship with the …
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SCHEB, Judge.
Appellant/plaintiff contends the trial court erred in dismissing his case on the ground the real party in interest was not before the court. We agree and reverse.
Plaintiff Schmidt sued appellees/defend-ants contending the defendants Muellers were liable to him for a real estate commission and that the defendaht Gram interfered with his contractual relationship with the Muellers. During the non jury trial the plaintiff alluded to having incorporated his real estate business thereby assigning his business assets to Paul Schmidt, Inc., the new corporation of which he was president. Defendants Muellers moved to dismiss on grounds the new corporation was not before the court as a party-plaintiff.
The trial judge dismissed the action holding . . that the corporation had not been substituted as party Plaintiff; that the real party in interest was, therefore, not within the jurisdiction of this Court and the action should be dismissed.” In its order of dismissal the trial judge noted the plaintiff had made an oral motion to substitute the newly-formed corporation as plaintiff but the court found “. that the Motion is too late.” Plaintiff Schmidt’s petition for rehearing was denied and this appeal ensued.
Rule 1.260(c), RCP, provides:
“(c) Transfer of Interest. In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party. Service of the motion shall be made as provided in subdivision (a) of this rule.”
The Rule is explicit. And once the trial judge concluded the plaintiff had transferred his cause of action to his newly-formed corporation two alternatives were available to the court: (1) to allow the action to be continued in the name of the plaintiff Schmidt; or (2) to allow Paul Schmidt, Inc. to be either substituted for or joined with the original party-plaintiff. See Miami Airlines, Inc. v. Webb, Fla.App.3d, 1959, 114 So. 2d 361.
Defendants Muellers fail to show that any prejudice would have occurred unto them by the action being continued in the name of the plaintiff Schmidt. In effect they point to no real obstacle to exercise of the first alternative by the court. They do argue, however, that had the plaintiff been allowed to join or substitute the corporation that they would be compelled to respond to a claim brought by an unknown corporation whose interest and status would have been unknown to them. The simple answer is that Florida Rules of Civil Procedure are sufficiently flexible to allow the court to grant any further relief by way of continuance, discovery or otherwise to protect the defendants even if the court chose to exercise the second alternative.
Accordingly, the order of the trial court is reversed and the cause remanded for further proceedings consistent with this opinion.
BOARDMAN, Acting C. J., and GRIMES, J., concur.
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Levine v. Nicholas Gonzalez, M.D., 901 So. 2d 969 (Fla. 4th DCA 2005)…able to the court: (1) to allow the action to be continued in the name of the plaintiff; or (2) to allow [the person to whom the interest was transferred] to be either substituted for or joined with the original party-plaintiff. Schmidt v. Mueller, 335 So. 2d 630, 631 (Fla. 2d DCA 1976); see also Sun States Utils., Inc. v. Destin Water Users, Inc., 696 So. 2d 944 (Fla. 1st DCA 1997); C.A. Leasing Serv. Corp. v. Zorn’s (Howard) Equip. Serv., 565 So. 2d 744 (Fla. 5th DCA 1990); Gas Dev. Corp. v. Royal Oak Buil…
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SUN States Utils., Inc. v. Destin Water Users, Inc., 696 So. 2d 944 (Fla. 1st DCA 1997)…action pending suit. The action may be continued in the name of the original party, or the court may upon application allow substitution of the transferee. See Collier v. Canal Ins. Co., 511 So. 2d 736, 738 (Fla. 1st DCA 1987); Schmidt v. Mueller, 335 So. 2d 630, 631 (Fla. 2d DCA 1976). Thus, the trial court’s final judgment is REVERSED and the case is REMANDED to the trial court for further consideration in light of rule 1.260, and to allow such substitution of parties as may be appropriate. JOANOS and V…
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Collier v. Canal Ins. Co., 511 So. 2d 736 (Fla. 1st DCA 1987)…(c), the property owners, who were the original parties to the suit, could continue the action despite the fact that the party who purchased the property after foreclosure had become the real party in interest. More recently, in Schmidt v. Mueller, 335 So. 2d 630 (Fla.2d DCA 1976), the court again considered Rule 1.260(c) in an appeal concerning a trial court’s dismissal of an action on the ground that the original plaintiff was no longer properly before the court. Schmidt, the plaintiff, had sued the defend…
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Miami Airlines, Inc. v. Webb, 114 So. 2d 361 (Fla. 3d DCA 1959)