Legal Memorandum: Standing to Sue in CA

Issue: Whether former homeowners have ‘standing’ to sue the builders of their former homes for construction defects when they lack of any current ownership interest in a property?

It is a fundamental principle of law that every action “must be prosecuted in the name of the real party in interest.”  Cal. Civ. Proc. Code § 367.  In a general sense, “the person possessing the right sued upon by reason of the substantive law is the real party in interest.”  Del Mar Beach Club Owners Ass’n v. Imperial Constr. Co. (4th Dist. 1981) 123 Cal. App. 3d 898, 906, 176 Cal. Rptr. 886 (quoting Powers v. Ashton (2d Dist.1975) 45 Cal. App. 3d 783, 787, 119 Cal. Rptr. 792).  Stated differently, real parties in interest are the persons “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.”

Friendly Village Community Ass’n v. Silva & Hill Constr. Co. (2d Dist. 1973) 31 Cal. App. 3d 220, 225, 107 Cal. Rptr. 123.  Thus, because a plaintiff’s ownership, lawful possession or right to possession of the property is an element of a cause of action for injury to real property, such ownership or possession must be present to confer a right to relief in court.  Id., 31 Cal. App.3d at 224-25.

When there are consecutive owners of the damaged property, the question of who may recover becomes an issue of accrual rather than so-called “standing.”  See Krusi v. S.J. Amoroso Constr. Co. (1st Dist. 2000) 81 Cal. […]