Summary
permitting intervention of boat employee who claimed damages as against boat captain and boat's insurer, where boat employee argued that captain showed little interest in defending against declaratory judgment action brought by insurer
Summary of this case from Lee v. JonesOpinion
CIVIL ACTION NO: 04-298 SECTION: "T" (4)
May 25, 2004
ORDER AND REASONS
On April 19, 2004, Dung Hung Nguyen ("intervenor") filed a Motion to Intervene (doc. #9) seeking leave of Court to intervene in this action pursuant to Fed.R.Civ.P. 24(a)(2). A hearing on the motion was held on May 19, 2004.
During the hearing, Dung Hung Nguyen argued that he has a direct, substantial and legally protectable interest in this matter in that he is the injured party, with a pending state court suit against Centennial and Chau Nguyen. Further, Dung Hung Nguyen contended that Chau Nguyen would not adequately represent the interests of the intervenor because Chau Nguyen has really shown no interest in the outcome of this federal suit, and Dung Hung Nguyen does not believe Chau Nguyen would not vigorously defend against this matter.
Centennial Insurance Company ("Centennial") argued that Dung Hung Nguyen's attempt to intervene is without merit, as he fails to demonstrate any grounds that would justify this Court permitting him to become involved in a dispute between parties to a contract to which he has no privity. In its opposition brief, Centennial further that Dung Hung Nguyen will not. as a practical matter, be adversely affected with respect to his ability to protect his interest.
I. Factual Background
On February 4, 2004, Centennial filed a Complaint for Declaratory Judgment against its assured and defendant, Chau Nguyen. In its Complaint, Centennial alleges denial of coverage under its protection and indemnity policy as to a claim for personal injuries resulting from the loss of Dung Hung Nguyen's right leg. The incident occurred on or about December 10, 2003 aboard the F/V SANTA MARIA, while the vessel was at sea. At the time of the incident, Dung Hung Nguyen was employed by the defendant as a seaman and member of the crew of the vessel.
Centennial issued a Protection and Indemnity Policy to Chau Nguyen as owner of the F/V SANTA MARIA, for a coverage period of March 27, 2003 to March 27, 2004. In part, the policy required that the total number of persons aboard the vessel at any one time shall not exceed three (3). Centennial asserts that at the time of the incident, there were four (4) persons on the vessel.
Centennial, in its Complaint, seeks an order of the Court determining whether coverage set forth in the policy it issued to the defendant Chau Nguyen, was invalidated and/or voided by the defendant's alleged failure to adhere to the explicitly stated terms and conditions of the insurance policy. Essentially, Centennial requests the Court to declare whether coverage attaches for the incident above the SANTA MARIA, involving Dung Hung Nguyen and the loss of his right leg, when there has been an alleged breach of an express warranty.
On March 4, 2004, one month after this federal action was filed, Dung Hung Nguyen filed a suit in state court, 15th Judicial District Court, Vermilion Parish, Louisiana, against Chau Nguyen and Centennial. Dung Hung Nguyen alleges employer negligence, unseaworthiness, and maintenance and cure rights, and alleging solidary liability on the part of the defendants pursuant to admiralty and maritime law.
In the state court petition Dung Hung Nguyen alleges that Chau Nguyen was negligent, his workplace was unsafe, and the SANTA MARIA was unseaworthy. Dung Hung further alleges that Centennial, having issued the protection and indemnity policy, is liable, in solido, with Chau Nguyen for all damages.
II. Legal Analysis
The Federal Rule of Civil Procedure 24(a) governs interventions of right. It states in pertinent part:
Upon timely application anyone shall be permitted to intervene in an action . . . when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.
"Federal courts should allow intervention where no one would be hurt and the greater justice could be attained." Sierra Club v. Espy, 18 F.3d 1202, 1205 (5th Cir. 1994). Thus, a party is entitled to an intervention of right if (1) the motion to intervene is timely; (2) the potential intervenor asserts an interest that is related to the property or transaction that forms the basis of the controversy in the case into which she seeks to intervene; (3) the disposition of that case may impair or impede the potential intervenor's ability to protect her interest; and (4) the existing parties do not adequately represent the potential intervenor's interest. Ford v. City of Huntsville, 242 F.3d 235, 239 (5th Cir. 2001). A. Timeliness
When determining whether a motion to intervene is timely, a court must consider the following four factors: (1) how long the potential intervenor knew or reasonably should have known of her stake in the case into which she seeks to intervene; (2) the prejudice, if any, the existing parties may suffer because the potential intervenor failed to intervene when she knew or reasonably should have known of her stake in that case; (3) the prejudice, if any, the potential intervenor may suffer if the court does not let her intervene; and (4) any unusual circumstances that weigh in favor of or against a finding of timeliness, Ford, 242 F.3d at 239.
"The requirement of timeliness is not a tool of retribution to punish the tardy would-be intervenor, but rather a guard against prejudicing the original parties by the failure to apply sooner." Sierra Club v Espy, 18 F.3d 1202, 1205 (5th Cir. 1994). "[A motion to intervene's] timeliness is to be determined from all the circumstances." Doe v Glickman, 256 F.3d 371, 376 (5th Cir. 2001). "This analysis is contextual; absolute measures of timeliness should be ignored. "Id. A court should ignore "[h]ow far the litigation has progressed when intervention is sought, . . . the amount of time that may have elapsed since the institution of the action . . . and the likelihood that intervention may interfere with orderly judicial processes." Id.
In the instant case, without waiving any objections to intervention, Centennial concedes that Dung Hung Nguyen's motion is timely. Accordingly, there is no need to further explore the issue.
B. Dung Hung Nguyen's Interests in the Action
A potential intervenor asserts an interest that is related to the property or transaction that forms the basis of the controversy in the case into which she seeks to intervene, if the potential intervenor has a "direct, substantial, and legally protectable" interest in the property or transaction that forms the basis of the controversy in the case into which she seeks to intervene. Id. at 379. In the context of intervention, the Fifth Circuit has warned against defining "property or transaction" too narrowly. Ford, 242 F.3d at 240. However an economic interest alone is insufficient, as a legally protectable interest, as a legally protectable interest is required for intervention under Rule 24(a)(2), and such intervention is improper where the intervenor does not itself possess the only substantive legal right it seeks to assert in the action. " New Orleans Public Service v. United Gas Pipe Line, 732 F.2d 452, 466 (5th Cir. 1984). The Fifth Circuit goes on to state that "[w]hat is required is that the interest be one which the substantive law recognizes as belonging to or being owned by the applicant." Id. at 464.
Dung Hung Nguyen asserts that his interest lies in the fact that he has a pending state court suit against both parties to this action, and if he is not allowed to intervene and this Court rules in Centennial's favor on the issue of insurance coverage, Dung Hung Nguyen's claims in Jones Act and admiralty may be final and conclusive.
In a case very similar to the one now before the Court, a party was allowed to intervene where the party asserted in state court, a substantive legal right, pursuant to Louisiana's direct action statute. See Coregis Insurance Company v. Bell, 1996 WL 502439 (E.D. La. Sept. 3, 1996). Under Louisiana's direct action statute, the injured party has "a right of direct action" against the insurer of an alleged tortfeasor. La.Rev.Stat.Ann. § 22:655 B(1) (West 1995). Just as in the Coregis case, Dung Hung Nguyen has filed a state court action under Louisiana's direct action statute against the alleged tortfeasor (Chau Nguyen) and against Centennial (tortfeasor's insurer).
The Coregis Court found that the intervening party had "essentially stepped into the shoes of the tortfeasor . . ., and [the party] has a legally protectable interest in the dispute before the court. i.e., whether or not coverage should be afforded under [the insurer's] professional liability policy." Id. at *2.
Here, Dung Hung Nguyen, by virtue of the state court petition filed under Louisiana's direct action statute, does possess a legally protectable interest in the present matter. His interest arises from the fact that, by virtue of Louisiana's direct action statute, Dung Hung Nguyen has a right which the substantive law recognizes as belonging to him.
Centennial did not brief the Court on the Coregis case. However, upon inquiry by the Court, Centennial only asserted that the Coregis case is not a maritime insurance case and the Court did not reach the merits of the intervenor's complaint in that case. The Court finds this distinction has no impact on whether Dung Hung Nguyen has asserted a legally protectable interest in this matter.
C. Impairment of Ability to Protect Interest
Thirdly, the potential intervenor must be situated so that the disposition of the case into which she seeks to intervene may impair or impede her ability to protect her interest. See id. Dung Hung Nguyen asserts generally in his position papers, that there is no doubt that disallowing intervention would outright impede his ability to protect his interest in a Jones Act and maritime suit against Centennial.
The Coregis Court, however, found that disallowing intervention would be greatly predjudicial because the applicant for intervention would be "potentially facing a situation where [he] has a state court judgment, but has no solvent defendant against whom to collect the judgment." Id. Just the same, if Dung Hung Nguyen succeeds in state court in his claims, the decision of this Court as to insurance coverage has the ability to impair his interests. D. Existing Parties
The potential intervenor has the burden of proving that the existing parties do not adequately represent her interest. Espy, 18 F.3d at 1207; Trbovich v. United Mine Workers, 404 U.S. 528, 538 n. 10, 92 S.Ct. 630, 636, 30 L.Ed.2d 686 (1972). This burden, however, is "minimal." Id. "The potential intervenor need only show that the representation may be inadequate." Id.
Here, Dung Hung Nguyen has asserted that he feels that, because of his lack of interest in defending this matter, Chau Nguyen would not adequately represent the interests of Dung Hung in defending Centennial's request for declaratory judgment in this matter. Dung Hung Nguyen suggests that the boat owner (Chau Nguyen) and its insurer, Centennial, sit in an adversarial position to him.
The burden here is minimal. If the applicant is found to have an interest that may be affected in the matter, and the applicant is not represented, he should be allowed to intervene. See Purnell v. City of Akron, 925 F.2d 941, 950 (6th Cir. 1991).
Accordingly,
IT IS ORDERED that Dung Hung Nguyen's Motion to Intervene (doc. #9) is GRANTED.
To obtain a transcript of the proceedings for the Court's findings, the parties should contact Gaynell Banta, Court Recorder Supervisor, at 589-7720.