July 29, 2025
While the real party in interest rule and standing doctrine function similarly in practice, they are derived from different sources and serve different purposes. A litigant has standing whenever there is a legal cause of action and standing must be established at the time a complaint is filed. In contrast, the real party in interest rule mandates that every action must be prosecuted in the name of the real party in interest. Although a failure to bring suit in the name of the real party in interest is a ground for dismissal, it does not follow that a suit originally filed in the name of someone other than the real party in interest must necessarily be dismissed. Instead, it is possible, in some circumstances, for a plaintiff to cure this defect by taking some action in the litigation that would allow the court to assess the effect of the changes in parties. The court may then consider under MCR 2.118(D) whether the correction of the real party in interest defect may relate back to when the original complaint was filed, or whether the suit will be barred by the running of the statutory period of limitations or the one-year-back rule.
The Michigan Supreme Court recently addressed assignments of claims in the no-fault context. Generally, a party that assigns away a legal claim then cannot sue because it is not the “real party in interest.” In C-Spine Orthopedics, PLLC, v Progressive Michigan Insurance Company, consolidated with Wallace v Suburban Mobility Authority for Regional Transportation, however, the Supreme Court held that a party may assign a claim to sue for benefits then revoke that assignment during litigation and still proceed as the “real party in interest” in certain circumstances.
The C-Spine consolidated cases come in the context of what the Supreme Court calls the “tangles of assignments” that complicate no-fault litigation. When an injured person seeks medical care, it is common for that injured person to assign any rights to bring a claim for PIP benefits to the medical providers giving treatment. In some cases, the medical provider may be more willing or more capable to bring a lawsuit for PIP benefits than the injured person, and the injured person saves time and effort by not being the person responsible for initiating a lawsuit.
The C-Spine case involved two consolidated cases where the injured person assigned away the right to bring a claim for benefits. In each case, the defendant moved for summary disposition, arguing that the plaintiff in the case had assigned away its legal right to sue and collect benefits. A unique twist brought these cases to the Supreme Court: in each case the plaintiff signed new contracts during litigation that revoked their prior assignment of rights. The Supreme Court then took up the cases to decide the effect of such a revocation during litigation.
When the plaintiffs in these cases sued after assigning away the claim, they were not the “real parties in interest.” This “real party in interest” rule intertwines with the standing doctrine, the notion that the party suing has a legal cause of action or a special injury or interest. A real party in interest is the party that can sue if the lawsuit will legally discharge the other party, regardless of who may actually eventually recover the judgment.
Typically, a “failure to bring suit in the name of the real party in interest is a ground for dismissal.” But the Supreme Court noted that parties can cure this defect during litigation. A plaintiff with this defect must take action, like amending a complaint to join the proper plaintiff as a party, allow the proper plaintiff to intervene in the lawsuit, or amend the complaint to reflect the legal assignment of claims.
In this case, the plaintiffs had signed away their rights to sue and were not the real parties in interest, but they eventually agreed to get back those rights with a contract done after the initial complaint was filed. The Supreme Court remanded each of the consolidated cases: one case was remanded for the party to take legal actions to cure its status during the litigation, and the other was remanded for the trial court to balance the equities because of the rescission of the prior assignment.
When insurers face lawsuits with assignments, they should note whether the plaintiff is the real party in interest, and whether that plaintiff has revoked any assignments or must cure any defects to their status as the real party in interest.