Opinion
Civil Action No. 01-3705, Section: "T"(1)
October 7, 2002
HEARING ON MOTION
MOTION: CC MARINE'S MOTION FOR LEAVE TO INTERVENE (Rec. doc. 17)
DENIED
Before the undersigned is the motion of CC Marine, L.L.C. ("CC") for an order permitting it to intervene in this proceeding. On June 11, 2001, the MN Durdy Dudley was towing a dredge, derrick barge and other barges when the tow ran aground during a storm causing damage to the derrick barge and other elements of the tow. Rec. doc. 1 at p. 3. Building Construction Company ("Building Construction") engaged CC to make repairs to this equipment. Building Construction requested that the derrick barge be made operable within two days and that the repairs to the other equipment be completed as soon as possible in order to permit Building Construction to meet contractual commitments. Exhibit A to Rec. doc. 17. CC contends it completed the repairs and it shows that it submitted invoices dated from June 18, 2001 to July 23, 2001 that total $475,907.73. Exhibit B to Rec. doc. 17. CC shows that Building Construction paid $178,000 and it contends that $297,907.73 remains unpaid. Id.
On December 11, 2001, the owner of the MN Durdy Dudley, Basin Marine, Inc. ("Basin Marine"), filed a complaint for exoneration from or limitation of liability. Rec. doc. 1. It submitted evidence that the fair market value of the vessel was $404,500. A notice was published in the Times-Picayune showing that all claims were to be filed before February 11, 2002. Rec. doc. 3. This deadline was extended to March 13, 2002. Rec. doc. 4. On February 13, 2002, Building Construction made a claim for vessel damages and alleged that expenses had been incurred in the repair of the vessel. Rec. doc. 5 at pp. 6-9. There was a preliminary conference on April 17, 2002 and the trial was set for January 13, 2002. Rec. doc. 12.
On August 16, 2002, Osprey Underwriting Agency Ltd. ("Osprey") was allowed to intervene without objection and assert a claim for $10,000. Osprey alleges that it paid in excess of $10,000 to resolve a personal injury claim by an employee of Building Construction that occurred on May 11, 2001 on the Building Construction dredge. Osprey contends that the $10,000 was within the Building Construction deductible and Building Construction owes the $10,000 to Osprey. Rec. doc. 16. Apparently Building Construction does not contest these allegations and it offers no explanation for its failure to pay the amount owed to Osprey.
On March 26, 2002, CC filed a complaint in the United States District Court for the Southern District of Alabama. Exhibit D to Rec. doc. 18. CC alleged that it was owed $297,907.73 by Building Construction and it sought to seize the dredge. On August 29, 2002, Building Construction and others filed a petition for declaratory judgment in the 22nd Judicial District Court for the Parish of St. Tammany, State of Louisiana and named CC as the defendant. Building Construction alleged that no additional funds are due CC because it was paid the fair and reasonable value for its services on the repair of the equipment damaged in the storm. Exhibit C to Rec. doc. 18. That suit was removed to federal court by CC.
See Great Southern Dredging, Inc., et al v. C C Marine, LLC, Civil Action No. 02-2786-L.
CC contends it is entitled to intervene pursuant to Fed.R.Civ.P. 24 (a). In John Doe # 1 v. Glickman, 256 F.3d 371 (5th Cir. 2001), the Fifth Circuit said:
[A] party is entitled to an intervention of right if (1) the motion to intervene is timely; (2) the potential intervener 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 the action may impair or impede the potential intervener's ability to protect her interest; and (4) the existing parties do not adequately represent the potential intervener's interest.Id. at 375.
CC made its application to intervene on September 10, 2002. CC contends its application is timely because the notice in the Times-Picayune was not published in Alabama, where CC is located, and that another party was allowed to intervene on August 16, 2002. CC contends that it has an interest in the limitation proceeding for M/V Durdy Dudley because of the claims asserted by Building Construction. It argues that if Building Construction prevails in its claim in the limitation proceeding, then CC is entitled to receive all amounts owed to it. CC further contends that the disposition of the limitation action without its presence will impair its ability to protect its interest in that action because Building Construction is an alleged sham with no assets. CC argues that if Building Construction recovers anything in the limitation proceeding it will transfer the funds and hide them from CC and other creditors. These allegations are repeated in support of is contention that the existing parties to the limitation proceeding will not protect its interest. In the event that it is determined that CC cannot intervene of right, it argues that it should be permitted to intervene pursuant to Fed.R.Civ.P. 24(b), urging that its claim and those of Building Construction present common questions law and fact.
See footnote 1.
In opposition Building Construction argues that CC is not so situated that the disposition of the action may as a practical matter impair or impede its ability to protect its alleged interest. Building Construction argues that the suit filed by CC in Alabama and the suit that CC removed to federal court show that CC is able to protect its interest without the need for intervention. Building Construction urges that a limitation proceeding is to include claims against the vessel and not claims against those with claims against the vessel.
Basin Marine opposes CC's application as not timely. Even though the newspaper notice of the limitation proceeding was not published in Mobile, Basin Marine argues that CC knew or should have known of the limitation proceeding prior to the filing of the application.
Assuming CC would be subrogated to the rights of Building Construction, CC must first establish the validity of its claim against Building Construction. CC seeks to intervene with a claim that is contingent upon it prevailing on its claim against Building Construction and recognition of its right of subrogation. In Washington Electric Cooperative, Inc. v. Massachusetts Municipal Wholesale Electric Co., 922 F.2d 92 (2nd Cir. 1990), the Second Circuit refused the application to intervene where the applicant's interest rested upon a double contingency. The Second Circuit said that: [a]n interest that is remote from the subject matter of the proceeding, or that is contingent upon the occurrence of a sequence of events before it becomes colorable, will not satisfy the rule. Id. at 97. See also Stilwell, Oklahoma v. Ozarks Rural Electric Co-op. Corporation, 79 F.3d 1038 (5th Cir. 1996) ("An interest of this sort [a contingent interest] is too attenuated and does not satisfy the "direct and substantial' requirement of Rule 24(a)(2)."). While CC may not confront a double contingency, it is attempting to intervene with a contingent interest to the fund created by the vessel.
CC's argument that it is so situated that disposition of the action may impair or impede its ability to protect its interests rests exclusively on its contention that Building Construction is a sham and will transfer or hide any recovery that it receives in the limitation proceeding. CC presents no evidence in support of this statement. It has not made a sufficient showing that the disposition of the limitation proceeding without its presence will impair or impede its ability to protect its contingent interest.
The dispute over CC's claim against Building Construction is already present in this Court, because of the removal of Building Construction's state court action for declaratory relief against CC. There is some potential for delay in the resolution of the limitation proceeding if CC is granted the right to intervene. Because of the potential for delay and the fact that the intervention raises the same issues found in the removed action, CC's request for permissive intervention is denied.
IT IS ORDERED that CC's motion for leave to intervene (Rec. doc. 17 is DENIED.