Messages app shows contact list name not individual contact on iPhone

Hi. I have a friend in my iPhone contacts as an individual entry who is also an entry in a contact list. When he messages me the name on the message shows the contact list name and not his individual name. Is this expected behaviour or do I have to alter something for it to show the individual, is there a way around this? Very confusing getting messages purporting to be from the Contact list not the individual.

[Re-Titled by Moderator]