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Miller v. Accelerated Bureau of Collections Inc.5/16/1996
nce may provide the defendant a defense in a subsequent proceeding brought by the real party in interest, but the existence of such a defense does not affect the standing of the plaintiff in the first instance.
Two divisions of this court have held that financial institutions did not have standing to pursue the claims of their insurers based on a federal regulation requiring the institutions to bring the actions and pay the proceeds over to the insuring agency. Citicorp Mortgage, Inc. v. Younger, 856 P.2d 52 (Colo. App. 1993); Platte Valley Savings v. Crall, 821 P.2d 305 (Colo. App. 1991); see also Hollingsworth v. Satterwhite, 723 P.2d 169 (Colo. App. 1986) (holder of power to demand that action be commenced together with right to control the action not a real party in interest).
In Younger, a financial institution commenced an action to collect the deficiency on an insured and secured loan after the insurer had paid the institution all of its losses. The action was commenced pursuant to a regulation of the insurer, the Department of Housing and Urban Development (HUD), by which it could request the institution to bring the action and pay over any proceeds to HUD. A division of this court held that because the financial institution had been paid in full it had no standing and that the regulation merely defined the relationship between HUD as an insurer and its lenders and did not confer standing.
In Bickett, a division of this court reached the opposite result under identical circumstances in a case in which the deficiency claim was assigned by HUD to the financial institution.
Therefore, in our view, the stipulation entered into between the Millers and the trustee in bankruptcy which deals only with the relationship of the Millers and the trustee does not confer standing on the Millers.
The judgment is reversed, and the cause is remanded with directions that a judgment of dismissal without prejudice be entered as to all claims asserted by the Millers.
JUDGE PLANK concurs.
CHIEF JUDGE STERNBERG Dissents.
Disposition
JUDGMENT REVERSED AND CAUSE REMANDED WITH DIRECTIONS
CHIEF JUDGE STERNBERG Dissenting.
I agree with much of what the majority writes: in Colorado, standing may be acquired after a complaint is filed, but before trial; and, the purpose of C.R.C.P. 17(a) is to prevent a defendant from facing duplicative suits on the same claim. Where I part company with the majority is its holding that the only way in which a claim for relief may be transferred is by "assignment."
In my view, our law does not require so restrictive an interpretation. The cases relied upon by the majority demonstrate that real party in interest status may be acquired after a complaint is filed. Here, there was a court-approved written stipulation providing that the suit could be prosecuted by plaintiffs, and agreeing for a sharing of attorney fees and division of any recovery. That language is the functional equivalent of an assignment.
Because the defendant had no exposure to a second suit on the claim, the purpose of the requirement of standing, as explained in Wright, Miller & Kane, supra, is served by recognizing the efficacy of the stipulation.
By placing form over substance, the majority takes away from plaintiffs' compensation for damage they sustained by defendant's actions, while allowing defendant to escape unscathed and unpunished for the wrongs they perpetrated.
I would affirm the judgment.
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