CFS 12 Funding LLC v. Wiesen

Background

This proceeding concerns petitioners’ request to confirm an arbitration award. The award dismissed Jeremy L. Wiesen’s claims and awarded petitioners attorneys’ fees. The motion to confirm the award had been fully briefed and was pending when the court learned that Wiesen had died on July 24, 2022.

Petitioners moved under Federal Rule of Civil Procedure 25(a)(1) to substitute Wiesen’s adult son, Gavin Wiesen, as respondent. Petitioners’ counsel reported information received from Wiesen’s former attorney and personal friend about Wiesen’s family and circumstances. Petitioners also reported that searches found no estate or probate proceeding in Florida or New York. Counsel stated that petitioners had not determined whether Wiesen died with a will or without one, or whether an executor or other estate fiduciary existed.

Gavin Wiesen was served with the substitution motion. In a letter, he confirmed that he was Wiesen’s son, stated that his father had no tangible estate, and said that he did not wish to participate. The letter did not address whether Wiesen had a will, whether he died without one, or what authority Gavin had over any estate assets.

Rule and analysis

Rule 25(a)(1) permits a court to order substitution when a party dies and the claim is not extinguished. The motion must be timely, the claims must survive the death, and the proposed substitute must be a “proper party.” A proper party may include an estate representative or, in some circumstances, an heir or beneficiary. A formal probate-court designation is not always required, but the party seeking substitution must provide a persuasive factual basis showing why the proposed substitute qualifies.

The court concluded that petitioners had not made that showing. They did not establish whether Wiesen died with a will or without one, identify an estate representative, or show that Gavin was the sole or primary beneficiary or distributee. The court also noted that several factual assertions rested on unverified statements attributed to Wiesen’s former attorney and friend.

The court identified an additional concern about possible prejudice to Gavin. Petitioners said they did not seek to hold Gavin personally liable for the arbitration award, but they reserved the right to seek recovery from estate distributees to the extent of assets they received. The court explained that if Gavin were substituted personally, confirmation of the award and entry of judgment could make him appear as a judgment debtor and create a lien against property where the judgment was recorded. Petitioners had not explained how Gavin would be protected from personal liability or proposed a caption identifying him as acting only in a representative capacity.

Disposition

Judge P. Castel denied petitioners’ Rule 25(a) motion for substitution without prejudice and directed the Clerk to terminate the motion. The court advised that, if petitioners needed more time to identify a proper party, they could consult Rules 25(a)(1) and 6(b), which concern the substitution deadline and possible extensions. The opinion addressed the substitution request and did not decide the pending motion to confirm the arbitration award.