Larsen v. Selmet, Inc.

The standard for ORCP 26 A is that leave to amend should be granted unless allowing the amendment would be unfairly prejudicial to the nonmoving party. Eklof v. Perrson, 369 Or 531, 538 (2022).

Larsen had claims against her employer (“Selmet”) that were not represented on her bankruptcy petition. After the bankruptcy case had closed, Larsen commenced her suit against Selmet. Selmet moved for summary judgement, claiming Larsen was the real party in interest. Larsen tried to substitute the bankruptcy trustee under ORCP 26 A. The trial court denied the motion and granted summary judgement for Selmet. The Court of Appeals affirmed and held that the trial court had discretion to deny the motion because it was unpersuaded by Larsen’s argument that it was an honest mistake. The standard for ORCP 26 A is that “leave to amend should be granted unless allowing the amendment would be unfairly prejudicial to the nonmoving party. Eklof v. Perrson, 369, Or 531, 538 (2022).” The Court reasoned that ORCP 23A determined the standard under Eklof, 369 Or 531, 537, to review ORCP 26A using an abuse of discretion standard and statutory interpretation. The Court found the trial court used the wrong standard of review and therefore it abused its discretion in denying the motion for substitution of the bankruptcy trustee as plaintiff. Reversed and remanded.