Rivington Partners, LLC v. Rovens

Background

Rivington Partners, LLC claims that Louis B. Rovens defrauded it in violation of California law. Rovens died while the case was pending. Jeffrey White, identified as Rovens’s guardian ad litem and successor co-trustee of Rovens’s living trust, filed a suggestion of death—a filing that gives notice of a party’s death under Federal Rule of Civil Procedure 25(a)(1)—and attached a death certificate.

Rovens’s former counsel said they no longer had authority to act for him, did not know of a representative or successor who could replace him, and believed the plaintiff first needed to have a representative appointed by a probate court. The plaintiff responded that it lacked information and argued that former counsel should identify the proper replacement party.

Court’s analysis

The court held that the plaintiff’s claims survive Rovens’s death under California law. However, the plaintiff may no longer recover punitive or exemplary damages.

Under Rule 25(a), when a claim survives a party’s death, the court may substitute a proper party. A motion to substitute generally must be made within 90 days after a properly served notice of death; otherwise, the action must be dismissed. The court explained that the suggestion of death filed by Rovens’s former counsel would not start that 90-day period until Rovens’s representative or successor was served as required by the federal service rules. A substitution motion could also be filed before an effective suggestion of death.

The court did not take a final position on whether White is a proper party for substitution. Under California law, a case involving a deceased defendant may continue against the defendant’s personal representative or, when authorized by statute, a successor in interest. A successor in interest may include a person who succeeds to the claim or to property connected with it. Because no probate proceeding had been opened, White could qualify only if he was a successor in interest through Rovens’s living trust. The court identified legal authorities suggesting that a successor trustee may qualify, particularly where the trust was revocable and California law permits claims to be asserted against trust assets, but it deferred a final decision until the parties submitted briefing.

The court rejected the argument that the plaintiff first had to open a probate proceeding and obtain a court-appointed representative. A successor in interest may be substituted even when no probate proceeding exists. If a probate proceeding is later opened, however, California’s claims-presentation requirements may apply before substitution, and the probate proceeding could affect whether White is a proper substitute.

Order

The court ruled that Rovens’s former counsel were not required to identify the proper replacement party because their authority to act had ended and they lacked the necessary information. Instead, the plaintiff may investigate whether White, the executor of Rovens’s will, or Rovens’s surviving spouse is a proper party for substitution.

Because White was not a party, the court said the plaintiff could use a subpoena under Federal Rule of Civil Procedure 45 to obtain information from him. The plaintiff could seek the trust instrument from the appropriate source, obtain the will from the San Francisco County Superior Court, and investigate whether Rovens’s surviving spouse qualifies as a successor in interest. The plaintiff may move to substitute a new party at any time, and any substitution motion must attach the relevant trust instrument and/or will. The order did not finally decide whether White or any other person should be substituted.