Estate of Nguyen v. Franciscan Health System

ESTATE OF HUNG NGUYEN, by and through GABRIELLE NGUYEN-ALUSKAR, Appellant, v. FRANCISCAN HEALTH SYSTEM; GILBERT JOHNSTON, M.D., d/b/a ST. JOSEPH CARDIOTHORACIC SURGERY ASSOCIATES AT ST. JOSEPH; FRANCISCAN MEDICAL GROUP, Respondents.

No. 73931-0-I

Court of Appeals of Washington, Division 1

November 9, 2015

UNPUBLISHED OPINION

VERELLEN, J.

"Every action shall be prosecuted in the name of the real party in interest."^[1] The real party in interest for a wrongful death claim is the personal representative of the estate, not a child of the decedent.^[2] The lack of a real party in interest is a basis to dismiss an action unless, within a reasonable time after an objection to the lack of a real party in interest there is a motion to substitute the real party in interest.^[3] If the substitution is a change only in representative capacity and the defendant is not prejudiced a trial court should grant a motion to substitute the real party in interest.^[4]

This wrongful death action was filed by an adult daughter on behalf of her father's estate (the Estate). The daughter filed the action knowing she was not and could not be personal representative because of her felony conviction. Although the surviving spouse had been appointed personal representative and moved to substitute within a few weeks of the defendant's objection to the lack of a real party in interest, the trial court denied her motion to substitute as the real party in interest on the Estate's behalf. The court expressed its concern with a fraud on the court and dismissed the action both for lack of a real party in interest and as a CR 11 sanction.

We conclude the trial court should have granted the motion to substitute. The proposed substitution of the surviving spouse was the equivalent of a change in representative capacity and the defendant Franciscan Health System (FHS) was not prejudiced as contemplated by CR 17(a).

To the extent the conduct and filings by the daughter and the surviving spouse were in bad faith, dismissal may be an appropriate CR 11 sanction. But there are no findings regarding the surviving spouse's conduct and the inadequacy of less severe sanctions.

We reverse the denial of the motion to substitute and remand for further proceedings related to CR 11 sanctions.

FACTS

In December 2008, Hung Nguyen had severe postoperative complications from heart surgery and died intestate. Nguyen was survived by his spouse Phuoc Nhu and five adult children including Gabrielle Nguyen-Aluskar.

On April 30, 2010, the daughter Nguyen-Aluskar filed a petition for letters of administration intestate in King County Superior Court. That petition listed six heirs of the decedent, including the daughter and surviving spouse, Nhu. The King County Superior Court initially appointed the daughter as personal representative, but revoked her status three days later, finding that she "is disqualified from serving as personal representative because of her conviction of a felony crime."^[5] At the 2010 hearing, the court clearly explained to the daughter that her prior felony conviction prevented her from serving as the Estate's personal representative.

In December 2012, the daughter filed a wrongful death action in Pierce County Superior Court with the caption "Estate of Hung Nguyen, by and through Gabrielle Nguyen-Aluskar."^[6] On November 22, 2013, the daughter and the surviving spouse signed and filed an ex parte petition "for letters of administration and nonintervention powers" with the caption "Estate of Hung T. Nguyen."^[7] The petition recites under the "heirs" section that there are "none."^[8] The petition also recites:

No Bond should be required of me because I am Decedent's surviving spouse and I have appointed my daughter Gabrielle Nguyen-Aluskar to the estate with me since I do not speak fluent English language. . . .

Nonintervention Powers should be granted to me because I am Decedent's surviving spouse, as I have appointed my daughter Gabrielle Nguyen-Aluskar to handle all estate matter[s]. Decedent's estate consists only of community property, and all of the then, living or gestating issue of Decedent are also the issue of mine [sic].^[9]

The petition requested the appointment of "Personal Representative Phuoc Nhu[ ] to serve with Nonintervention Powers."^[10] The surviving spouse signed the petition. The trial court noted in the minutes of proceeding that the daughter "comes before the court seeking to be appointed personal representative."^[11]

In the transcript of the November 2013 hearing, "Gabrielle Nguyen-Aluskar" is the only name listed under "appearances, " but the record indicates that the surviving spouse was also present:

COURT: All right. . . . Your name, please?

NGUYEN-ALUSKAR: Gabrielle Nguyen-Aluskar and my mother.

COURT: Okay. Do you have-okay, so you're both asking to be made personal representative?

NGUYEN-ALUSKAR: Urn, yes, but more (inaudible) for me because my mom doesn't speak fluent English.

COURT: And are there any other heirs besides you?

NGUYEN-ALUSKAR: No. ^[12] When asked, the daughter acknowledged to the court that she had siblings.

COURT: Okay. Do they know that you are asking to be made personal representative?

NGUYEN-ALUSKAR: Yes, um-hum. Yes.

COURT: And do you both live in Pierce County?

NGUYEN-ALUSKAR: Yes.

[PHUOC] NGUYEN: Yes.^[13]

The court declined to appoint the daughter as personal representative:

And before I would make this appointment, I request that you set a motion . . . and give notice to all the children, your brothers and sisters, because there are some issues with your background and I do not know if the court will approve you as the personal representative. But I think all the potential heirs are entitled to notice. . . . Your background!, ] there's issues of fact, forgery, a DUI, those types of things cause the court concern.^[14]

At some point, the daughter crossed out her signature and references to herself in the petition. After a recess, the daughter sought to have only her mother appointed as personal representative. The court declined to appoint her without a motion and notice to all heirs:

COURT: Ma'am, I told you [that] you had to file a motion.

NGUYEN-ALUSKAR: My mom is with me and she said that's too much time and she'll just be the personal representative to my--her husband's estate.

COURT: Okay. I'm still requiring notice because of the language issue. So there has to be notice. You have to file a motion.

NGUYEN-ALUSKAR: She's-

COURT: Ma'am, that is my ruling.

CLERK: And what you might want to do also is go down to Court 7 and you can arrange for an interpreter.

NGUYEN-ALUSKAR: Okay. Thank you. ^[15]

When a dispute arose over medical record release stipulations signed by the daughter, FHS discovered that the Estate lacked a personal representative. On May 27, 2014, FHS filed a motion to dismiss for lack of a real party in interest. On June 13, 2014, a superior court commissioner appointed the surviving spouse "personal representative of the Estate of Hung Nguyen."^[16] On June 14, 2014, the Estate, "by and through Gabrielle Nguyen-Aluskar" requested to substitute the surviving spouse as the real party in interest.^[17]

At the July 2014 hearing on the motion to dismiss, the trial court found that Nguyen-Aluskar "is disqualified from serving as personal representative" by virtue of being "convicted of a . . . felony drug offense." The court also stated it "does not find credible" the representations in her latest declaration, that she "subjectively knew that she could not serve in that capacity, " yet "she held herself out as personal representative in filing both the [c]omplaints in this case, " and that such conduct "constitutes a deliberate, intentional fraud upon the court."^[18] The court declined to substitute the surviving spouse as the real party in interest and dismissed the wrongful death action for "there being no real party in interest."^[19] The court also dismissed the complaint as a CR 11 sanction based upon "the circumstances under which the [c]omplaints have been filed."^[20]

The Estate appeals.

ANALYSIS

The Estate contends the trial court should have granted its motion to substitute the surviving spouse as the real party in interest because, at that time, the surviving spouse had been appointed personal representative and FHS was not prejudiced. We agree.

Standard of Review

We review a trial court's decision to dismiss a case, or allow substitution of a real party in interest under CR 17(a), for abuse of discretion.^[21] "An abuse of discretion occurs only where 'exercise of discretion is manifestly unreasonable or based upon untenable grounds or reasons.'"^[22]

Substitution of the Real Party in Interest

CR 17(a) requires that the party who commences an action be a "real party in interest." "The real party in interest is the person who possesses the right sought to be enforced."^[23] A wrongful death action must be brought by the estate's personal representative.^[24]

The purpose of CR 17(a) is "'to protect the defendant against a subsequent action by the party actually entitled to recover, and to insure generally that the judgment will have its proper effect as res judicata.'"^[25]

The critical inquiry here is on the last sentence of CR 17(a) that allows substitution of the real party in interest and relation back to the original filing:

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

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