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Estate Battle Centers on Issue of Legal Standing to Bring an Action Against an Estate’s Personal Representative

Wills-trust-estates-bank-beneficiary-trust-trusteesIssues of standing—defining who has the legal right to bring a civil action against an estate—comprise many estate battles. People are often surprised to learn that they may not be able to sue for recovery.

What happens when the personal representative of the estate, a potential defendant in a case, wants to bring a civil action on behalf of the estate of a deceased person? That was the issue before the South Carolina Supreme Court in Fisher v. Huckabee

Alice Shaw-Baker lived in Charleston and had no immediate family. She allegedly had an agreement with Bessie Huckabee, Kay Passailaigue Slade and Sandra Byrd that if they would care for her in her final years, she’d leave them the assets of her estate. In her last will—executed in 2001—she left her entire estate to the three ladies and named Huckabee the personal representative. Shaw-Baker died in 2009 at the age of 79.

Betty Fisher is Shaw-Baker's niece and was her closest living relative. Right after Shaw-Baker's death, Fisher filed an action in probate court challenging the 2001 will and the appointment of Huckabee as personal representative. Fisher filed what she called a "Motion for Temporary Injunction" in the probate action, in which she requested to remove Huckabee as the personal representative. She specifically alleged that "Shaw-Baker's estate has a survival action against Huckabee", as one of the reasons she should be removed. As an alternative to the removal of Huckabee, Fisher requested that an attorney be appointed special administrator according to state law. She didn’t suggest, however, that the special administrator might bring a survival action.

In 2012, purporting to act as Shaw-Baker's "real representative," Fisher brought an action in circuit court against the three ladies, and against a lawyer who represented the first three. Her primary allegation was that the three breached their duty to take care of Shaw-Baker, causing her to incur damages during her lifetime. She brought the action under the state’s survival statute.

The defendants argued that Fisher didn’t have standing (the legal right) to bring the survival action. Her Motion for Temporary Injunction, that Fisher filed almost three years earlier, was still pending in the probate action at this time. However, Fisher never asked the circuit court—in the probate action or the survival action—to appoint a special administrator to bring the survival action. The circuit court dismissed the action. The court of appeals affirmed. The South Carolina Supreme Court granted Fisher's petition to review the dismissal of the action.

Justice John Cannon Few wrote in the opinion of the Supreme Court that the question of who may bring a civil action arises under Rule 17(a) of the Rules of Civil Procedure, which provides, "Every action shall be prosecuted in the name of the real party in interest."

The real party in interest is "'the party who, by the substantive law, has the right sought to be enforced.' It is ownership of the right sought to be enforced, which qualifies one as a real party in interest." Usually, the Probate Code grants the personal representative the exclusive authority to bring civil actions on behalf of an estate, but the laws acknowledge that there will be "circumstances where a general personal representative cannot or should not act." In that case, a special administrator may be appointed.

The Court noted the Reporter's Comment to section 62-3-614, which explains, "Appointment of a special administrator would enable the estate to participate in a transaction which the general personal representative could not, or should not, handle because of conflict of interest."

The defendants said Fisher didn’t meet the real party in interest requirement of the court rule. They argued that Fisher was neither the personal representative nor a special administrator. But Rule 17(a) states:

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.

The Reporter's Notes to the rule say that it "is intended to prevent forfeiture in those cases in which the determination of the proper party to sue is difficult or when there has been an honest mistake." Therefore, Justice Few held that the rule gave Fisher an opportunity to cure (or fix) her failure to meet the real party in interest requirement. If she had asked, the circuit court would’ve been required to allow her time to correct her mistake.

But Fisher didn’t ask for time, and she never asked the circuit court to consider whether a special administrator should be appointed. Nor did she mention her pending motion in the probate action to appoint one. As a result, the South Carolina Supreme Court held that Rule 17(a) allowed the dismissal of the action.

Justice Few acknowledged that the case was litigated in confusion from the start. Fisher filed her complaint in what she claimed was her capacity "as Real Representative for Alice Shaw-Baker." The term "real representative" is found in the survival statute, which provides, "Causes of action for and in respect to any and all injuries and trespasses to and upon real estate and any and all injuries to the person or to personal property shall survive both to and against the personal or real representative, as the case may be, of a deceased person . . . ." The justice said that neither the circuit court nor the court of appeals considered Rule 17(a). Although the result the courts reached was not erroneous, Justice Few said, the analysis was misplaced.

The justice explained that the confusion and misplaced analysis arose from the fact that the state statutes contain terms that no longer have the same significance under modern law which they had when they were originally used. The term "real representative"—whatever the term meant when the survival statute was enacted in 1892—is no longer a meaningful term, the justice explained. However, the right to bring a survival action is determined by the Probate Code. Under the statute, the right to bring a survival action belongs initially to the personal representative. But "in circumstances where a general personal representative cannot or should not act," the right to bring a survival action belongs to a special administrator.

The Probate Code defines who may act on behalf of the estate of a deceased person, the justice said. When the personal representative of the estate can’t or shouldn’t bring the lawsuit, a "special administrator" should be appointed.

After the defendants challenged Fisher's status as the real party in interest, they didn’t request "a reasonable time . . . for ratification . . . or joinder or substitution." Thus, the Court found that the court rules provide for dismissal. The circuit court didn’t err. As a result, the South Carolina Supreme Court vacated the portion of the court of appeals' opinion discussing "real representative," and affirmed the decision as modified.

The Court found that the rules provide for dismissal, so the circuit court was correct in its ruling. The defendants did not request "a reasonable time . . . for ratification . . . or joinder or substitution." The portion of the court of appeals’ opinion concerning “real representative” was modified and the decision was affirmed as modified.

Reference: South Carolina Supreme Court (Feb. 28, 2018) Fisher v. Huckabee