United States District Court, D. Colorado
GARY L. HAYNES, as Trustee for and on behalf of the Insurance Trust of Marjorie Unger, Trustor Plaintiff,
TRANSAMERICA CORPORATION, a member of Aegon Group, doing business as Transamerica Life Insurance Company, Defendant.
KRISTEN L. MIX MAGISTRATE JUDGE.
matter is before the Court on the Motion of John
Unger to Join or Be Substituted as Party Plaintiff
[#77] (the “Motion”). Defendant
filed a Response [#78] in partial opposition to the Motion,
and Plaintiff filed a Reply [#79]. The Court has reviewed the
Motion [#77], the Response [#78], the Reply [#79], the entire
case file, and the applicable law, and is sufficiently
advised in the premises. For the reasons set forth below, the
Motion [#77] is GRANTED.
Summary of the Case
case arises out of an insurance dispute. Plaintiff Gary L.
Haynes (“Plaintiff” or “Mr. Haynes”)
has cared for the day-to-day business of the Insurance Trust
of Marjorie Unger (the “Trust”) since the 1980s,
and, in this lawsuit, he sued Defendant for cancelling the
Trust's life insurance policy on Marjorie Unger
(“Trustor” or “Ms. Unger”).
Notice of Removal [#1] at 1-2. Defendant filed a
Motion for Summary Judgment [#64] partially on the basis that
Plaintiff lacked standing to bring the suit because he is not
a formal or de facto trustee of the Trust. Motion for
Summary Judgment [#64] at 1-2. Defendant argued that Ms.
Unger's son, John Unger (“Mr. Unger”), was
the only “party in interest” able to file this
suit as a trustee. Id. at 3; Fed.R.Civ.P. 17(a)(1).
The Court granted the Motion for Summary Judgment [#64] on
the basis that “there appears to be utterly no
evidence, and certainly no evidence properly brought to the
Court's attention, that Plaintiff was ever formally added
to the Trust as trustee or otherwise formally empowered to
act on behalf of Mr. Unger, who was undisputedly formally
named as the trustee of the Trust.” Order
[#74] at 6. The Court ordered the ruling “held in
abeyance for thirty days . . . to allow Mr. Unger to properly
move ‘to ratify, join, or be substituted into this
action.'” Order [#74] at 16 (citing
present Motion [#77], Mr. Unger responds to the Order [#74]
by moving to be joined with or substituted for Plaintiff.
Defendant argues in partial opposition that substitution is
the only valid way for Mr. Unger to enter the lawsuit and
that joinder with Plaintiff is inappropriate because
Plaintiff is not a “party in interest.”
Response [#78] at 2. Plaintiff argues in his Reply
that joinder is appropriate because he is a substitute
trustee. Reply [#79] at 2 (citing Ex. 1,
Insurance Trust Agreement [#79-1] at 10).
argues that Mr. Unger, the Trustee, is sometimes unwilling
and unable to serve as trustee because his job keeps him in
“foreign locations doing work that requires security
clearances” and he is therefore “incognito and
unreachable.” Motion [#77] at 5. Mr.
Unger's involvement in the trust “started declining
[around 1998], and at some point in time, [he was] wholly
removed” from the daily maintenance of the trust.
Id. at 6. Plaintiff argues that Mr. Unger states
that he “was never the sole
trustee.” Id. On March 15, 2018, Mr. Unger
signed a Notice of Appointment, appointing “Gary Haynes
to act as a trustee or co-trustee for the benefit of the
Trust Agreement” because Mr. Unger “has been and
is unable to serve on a day-to-day basis as Trustee.”
Ex. 5, Notice [#79-5] at 1.
Standard of Review
17(a) of the Federal Rules of Civil Procedure provides that
“[a]n action must be prosecuted in the name of the real
party in interest.” Fed.R.Civ.P. 17(a)(1); Anderson
v. Van Pelt, No. 09-cv-00704-CMA-KMT, 2013 WL 856508, at
*2 (D. Colo. Mar. 7, 2013). “[T]he real party in
interest is the one who, under applicable substantive law,
has the legal right to bring suit.” FDIC v.
Gelderman Inc., 975 F.2d 695, 698 (10th Cir. 1992);
Anderson, 2013 WL 856508, at *2. Pursuant to Fed. R.
Civ P. 17(b)(3), having a legal right to sue “is
determined . . . by the law of the state where the court is
located . . . .” Under Colorado law, a
“fiduciary” is defined as “one or more
persons designated in a will, trust instrument, or otherwise,
whether corporate or natural persons and including successors
and substitutes, who are acting in any of the following
capacities: . . . (IV) Trustees.” Colo. Rev. Stat.
§ 15-1-802(3)(a). “During the period of
administration of the . . . trust and until final
distribution, a [trustee] has the power to perform, without
court authorization, every act reasonably necessary to
administer . . . the trust . . . .” Colo. Rev. Stat.
§ 15-1-804(1). This includes the power “[t]o pay,
contest, or otherwise settle claims by or against the . . .
trust, including taxes, assessments, and expenses, by
compromise, arbitration, or otherwise . . . .” Colo.
Rev. Stat. § 15-1-804(2)(r).
short, as discussed below, the Court finds that Mr. Haynes
did not have standing at the inception of this lawsuit, but
that Mr. Unger may be substituted in his place pursuant to
Fed.R.Civ.P. 17(b)(3) in order to satisfy subject matter
jurisdiction concerns. However, because evidence has now been
provided that Mr. Haynes became a real party-in-interest
after this lawsuit's inception by being formerly
named substitute trustee of the Trust, Mr. Haynes is
permitted to replace Mr. Unger as the sole plaintiff and
proceed with the lawsuit on his own.
parties agree that, regardless of whether he is substituted
or joined, Mr. Unger may be added to this lawsuit as a
trustee of the Trust. See generally Motion [#77];
Response [#78] at 2. The question remains,
therefore, whether he should be joined with Mr. Haynes as a
co-plaintiff/co-trustee or whether he should be substituted
in place of Mr. Haynes as the sole plaintiff/trustee in this
matter. See generally Motion [#77];
Response [#78] at 2. “Standing doctrine
addresses whether, at the inception of the
litigation, the plaintiff had suffered a concrete injury
that could be redressed by action of the court.”
WildEarth Guardians v. Pub. Serv. Co. of Colorado,
690 F.3d 1174, 1182 (10th Cir. 2012) (emphasis added). The
Court thoroughly analyzed this issue in its Order [#74] on
the Defendant's Motion for Summary Judgment [#64].
Nothing provided in the present briefing alters its prior
determination that Mr. Unger had standing to bring these
claims at the inception of this lawsuit on December 1, 2016,
but that Mr. Haynes did not. Thus, the Court incorporates
that analysis here and finds that Mr. Unger should be
substituted for Mr. Haynes as the appropriate plaintiff in
this action, rather than joined with Mr. Haynes as a
co-plaintiff, for purposes of standing at the inception of
this lawsuit. See Fed. R. Civ P. 17(b)(3) (stating
that a “court may not dismiss an action for failure to
prosecute in the name of the real party in interest until,
after an objection, a reasonable time has been allowed for
the real party in interest to ratify, join, or be substituted
into the action”).
“John Unger, trustee for and on behalf of the Insurance
Trust of Marjorie Unger, ” is
substituted as plaintiff in place of
“Gary L. Haynes, trustee for and on behalf of the
Insurance Trust of Marjorie Unger, ” pursuant to