Light v. Whittington (In re Whittington) (Aug. 20, 2014)
The plaintiffs alleged that the Debtor breached his fiduciary duties and committed fraud and sought an award of damages along with attorney’s fees. The plaintiffs also argued that under sections 523(a)(2)(a) and 523(a)(4) their claim against the Debtor should be deemed nondischargeable. The Debtor asserted numerous affirmative defenses in response to these claims including the individual plaintiffs’ lack of standing to bring their claim. The Court addressed two separate standing issues: constitutional standing and prudential standing. In addressing the issue of prudential standing, the Court found that Federal Rule of Civil Procedure 17 governed, which requires that “[a]n action must be prosecuted in the name of the real party in interest.” The Court then held that the objection based on a real-party-in-interest defect was made within a reasonable time, the post-complaint assignments of the causes of action to the individual plaintiffs successfully ratified them as the real parties in interest and that the case should be treated as if it had originally commenced by the real party in interest. Thus, the requirements of prudential standing and FRCP 17 were satisfied.
Light v. Whittington (In re Whittington), 530 B.R. 360 (Bankr. W.D. Tex. 2014).