Estate Planning and Business Law

Who is the Real Party in Interest in a Lawsuit?

Every action must be prosecuted in the name of the real party in interest. ( Code Civ Proc § 367) The question then becomes, who is the real party in interest?

The general test of such a party is: "It [Code of Civ. Proc., sec. 307] is to save a defendant, against whom a judgment may be obtained, from further harassment or vexation at the hands of other claimants to the same demand. ( Anheuser-Busch, Inc. v. Starley (Cal. 1946) 28 Cal. 2d 347, 351-352; Keru Investments, Inc. v. Cube Co. (1998) 63 Cal. App. 4th 1412, 1424)

The application of the statute [ Code Civ Proc § 367] while superficially concerned with procedural rules, really calls for a consideration of rights and obligations ( Jasmine Networks, Inc. v. Superior Court (2009) 180 Cal. App. 4th 980, 991). A person has standing if he or she is the real party in interest. A real party in interest is one having an actual and substantial interest in the subject matter of the action and who would be benefited or injured by the judgment in the action. A party enjoys standing if his stake in the resolution of that complaint assumes the proportions necessary to ensure that he will vigorously present his case. Standing is determined by a measure of the intensity of the plaintiff's claim to justice.

A real party in interest ordinarily is defined as the person possessing the right sued upon by reason of the substantive law. The real party in interest has ‘an actual and substantial interest in the subject matter of the action,’ and stands to be ‘benefited or injured’ by a judgment in the action. Plaintiffs have standing to sue if they or someone they represent have either suffered or are threatened with an injury of sufficient magnitude to reasonably assure the relevant facts and issues will be adequately presented. The real party in interest is the party who has title to the cause of action, i.e., the one who has the right to maintain the cause of action. In context of the ownership of real property, while ordinarily the owner of the real property is the party entitled to recover for injury to the property, the essential element of the cause of action is injury to one's interests in the property--ownership of the property is not.

Blackwell, Santaella & Jahangiri, LLP specializes in business and corporate law, business, commercial and real estate litigation, estate planning and bankruptcy law. We are located in San Ramon, Contra Costa County. We are open from 8:30 a.m. to 5 p.m., Monday to Friday. To make an appointment please call 925-359-3233.