42 Trial Lawyer • Winter 2024 Between the Sheets Lisa T. Hunt Cody Hoesly Nadia Dahab By Cody Hoesly, OTLA Guardian By Lisa T. Hunt By Nadia Dahab, OTLA Guardian DECISIONS OF THE OREGON SUPREME COURT ORCP 26 A motion to substitute real party in interest, like motions to amend the complaint, should be freely granted absent unfair prejudice to nonmovant. Larsen v. Selmet, Inc., 371 Or 457 (2023), Bushong, J. Kevin Lafky represented the plaintiff. In this case, the plaintiff had filed a petition for a Chapter 7 bankruptcy after leaving her employment over various disputed issues. After the bankruptcy court had discharged the plaintiff’s debts and closed the case, the plaintiff filed this action against her former employer alleging three claims of disability discrimination and one claim of workers’ compensation retaliation. The plaintiff then reopened the bankruptcy case, a trustee was appointed, and the plaintiff amended her bankruptcy asset schedule to include the claims in this case. Six months later, the defendant employer moved the trial court for summary judgment arguing, among other things, that the bankruptcy filing had divested the plaintiff of standing to bring these claims and the plaintiff was not the real party in interest. The trial court granted the motion and thereafter denied plaintiff’s subsequent motion for leave to substitute the bankruptcy trustee as the real party in interest under ORCP 26 A. The trial court determined that the “plaintiff's filing of the action in her own name was ‘a calculation to discharge her debts prior to going forward with the lawsuit, and to allow herself to reap the benefits of the lawsuit while at the same time discharging her debts.’” Plaintiff appealed the dismissal of her action and the Court of Appeals affirmed. After examining the “analogous” federal rule, “the court concluded that the trial court had discretion to deny substitution and dismiss the action if it was not persuaded that the plaintiff had made an ‘honest mistake.’” The Supreme Court allowed review of that decision. After construing ORCP 26 A under a lengthy examination of the rule’s text, context, and legislative history, the Supreme Court concluded “that a request to substitute the real party in interest requires an amendment to the pleadings, and that such a request should be governed by the lenient standards governing leave to amend the pleadings to avoid dismissal or forfeiture of just claims.” Because the trial court had dismissed the plaintiff’s claims by applying a different legal standard, the Supreme Court concluded it had erred. The Court of Appeals’ decision and the Circuit Court
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