Opinion
Civil Action No. 04-997, Section: I/3.
September 9, 2004
ORDER AND REASONS
Allstate Insurance Company ("Allstate") filed a motion for leave of court to file a complaint of intervention pursuant to Rule 24 of the Federal Rules of Civil Procedure. No opposition has been filed by any of the existing parties. Movant asserts bases for both intervention of right, Rule 24(a), and permissive intervention, Rule 24(b). Based on the law, the memoranda, and for the following reasons, the Court grants Allstate's motion.
Rule 24(a) of the Federal Rules of Civil Procedure states that intervention of right shall be permitted upon timely application:
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.
Fed.R.Civ.P. 24(a) (2).
Permissive intervention is governed by Rule 24(b) and states in pertinent part:
Upon timely application anyone may be permitted to intervene in an action . . . when an applicant's claim or defense and the main action have a question of law or fact in common. In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.
Fed.R.Civ.P. 24(b).
Rec. Doc. No. 17, Allstate's motion for leave to file complaint of intervention. Movant asserts an independent basis for subject matter jurisdiction in its supplemental memorandum in support of its motion for leave to file complaint of intervention. Rec. Doc. No. 20.
Allstate issued policies of insurance to defendant, Dr. Alan Parr. Allstate seeks a judgment, declaring its obligation to its insured, Dr. Parr, with respect to the acts alleged by plaintiffs, Kadlec Medical Center and Western Professional Insurance Company. The underlying action against Dr. Parr is based on a negligence claim.
Rec. Doc. No. 1.
I. Intervention of Right
A party is entitled to intervene as of right if: 1) the motion to intervene is timely filed; 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 intervention is sought; 3) disposition of the case may impair or impede potential intervenor's ability to protect its interest; and 4) the existing parties do not adequately represent the potential intervenor's interests. See Fed.R.Civ.P. 24(a); Trans Chem. Ltd. v. China Nat'l Mach. Import and Export Corp., 332 F.3d 815, 822 (5th Cir. 2003); Heaton v. Monogram Credit Card Bank of Ga., 297 F.3d 416, 422 (5th Cir. 2002).
Rule 24 is liberally construed and any doubts are resolved in favor of the proposed intervenor. Stupak-Thrall v. Glickman, 226 F.3d 467, 472 (6th Cir. 2000); United States v. Union Elec. Co., 64 F.3d 1152, 1158 (8th Cir. 1995); Federal Sav. and Loan Ins. Corp. v. Falls Chase Special Taxing Dist., 983 F.2d 211, 216 (11th Cir. 1993); see United States v. Tex. E. Transmission Corp., 923 F.2d 410, 413 (5th Cir. 1991) (stating "the inquiry under subsection (a) (2) is a flexible one, which focuses on the particular facts and circumstances surrounding each application . . . [and] intervention of right must be measured by a practical rather than a technical yardstick"). However, failure to meet any one of the four requirements results in denial of the motion. See Sierra Club v. Espy, 18 F.3d 1202, 1205 (5th Cir. 1994).
A. Timeliness
The party who seeks to intervene must first timely move to do so. This is a discretionary determination for the district court. See Smith Petroleum Serv., Inc. v. Monsanto Chem. Co., 420 F.2d 1103, 1115 (5th Cir. 1970). To determine whether a motion to intervene is timely, the court may consider: 1) the length of time during which the would-be intervenor actually knew or reasonably should have known of its interest in the case before it petitioned for leave to intervene; 2) the extent of the prejudice that the existing parties to the litigation may suffer as a result of the would-be intervenor's failure to apply for intervention as soon as it knew or reasonably should have known of its interest in the case; 3) the extent of the prejudice that the would-be intervenor may suffer if intervention is denied; and 4) the existence of unusual circumstances militating either for or against a determination that the application is timely. Ford v. City of Huntsville, 242 F.3d 235, 239 (5th Cir. 2001) ( citing Sierra Club, 18 F.3d at 1205).
The Court finds the first timeliness factor to favor the movant. Because no party has filed an opposition to Allstate's motion, the Court finds the relatively brief time between plaintiffs' filing of the original action and Allstate's motion to be timely. With regard to the second factor, the Court does not find that the existing parties will suffer prejudice if the Court allows Allstate to intervene. Indeed, the existing parties have not alleged that they would suffer prejudice. Furthermore, the Court finds that Allstate will suffer prejudice if the Court does not grant leave to intervene. If the Court does not do so, Allstate may have to file another action at a later time. Finally, the fourth timeliness factor is neutral. No facts militate against or in favor of intervention.
The original action was filed on April 8, 2004. Rec. Doc. No. 1. Allstate filed its motion on August 5, 2004. Rec. Doc. No. 17.
B. Allstate's Interest in the Underlying Action
The applicant for intervention must also prove that it has an interest in the property or transaction that is the subject of the litigation. See Ford, 242 F.3d at 239. The Fifth Circuit has held that the would-be intervenor must have a "direct, substantial, legally protectable interest in the proceedings." New Orleans Pub. Serv., Inc. v. United Gas Pipe Line Co., 732 F.2d 452, 463 (5th Cir. 1984) A "legally protectable" interest is one that substantive law recognizes as belonging to or being owned by the applicant. See Edwards v. City of Houston, 78 F.3d 983, 1004 (5th Cir. 1996); see also New Orleans Pub. Serv., Inc., 732 F.2d at 464.
Allstate contends that it has an interest in the outcome of the underlying litigation because Dr. Parr, if cast in judgment, will seek indemnification against Allstate. The Court finds that Allstate's interest in having its obligations under the insurance policy established meets this requirement.
C. Allstate's Ability to Protect Its Interests
The third requirement for intervention of right is that the claimant is so situated that "the disposition of the action may, as a practical matter, impair his ability to protect his interests." See Ford, 242 F.3d at 239. Allstate alleges that if the Court does not grant its leave to intervene, it will be impaired or impeded from asserting its position of no liability with regard to the main action. Again, no party disputes Allstate's intervention which is designed to protect its interest.
In addition, although the Court recognizes that Allstate could initiate an independent lawsuit to protect its interest, the Court finds that forcing Allstate to file a subsequent lawsuit with respect to an issue related to one already before the Court would be a waste of judicial resources. See, e.g., United States v. Texas E. Transmission Corp., 923 F.2d 410, 415-16 (5th Cir. 1970) (addressing when the burden of additional litigation justifies intervention for purposes of the third intervention as of right requirement). Therefore, Allstate has satisfied the third requirement.
D. Adequate Representation
The final requirement under Rule 24(a)(2) is that the existing parties to the litigation do not adequately represent the interests of the would-be intervenor. The burden of demonstrating inadequate representation is on the movant, but this burden is "minimal." See Espy, 18 F.3d at 1207. The movant must merely show that the existing representation "may be" inadequate. See id.
Allstate alleges that it is not adequately represented because both plaintiffs and Dr. Parr have an interest in a finding of coverage. The Court finds that the existing parties do not adequately represent Allstate's interest. Indeed, there is no indication that any party is concerned with protecting Allstate's interest. Allstate's allegation is sufficient to satisfy its "minimal" burden of showing that representation of its interests "may be inadequate." Edwards, 78 F.3d at 1005.
For the foregoing reasons, the Court finds that Allstate satisfies the four requirements for intervention of right under Federal Rule of Civil Procedure 24(a)(2).
II. Permissive Intervention
Notwithstanding the fact that Allstate has met the requirements for intervention as of right, permissive intervention would also be appropriate in this case. Pursuant to Rule 24(b), the Court may, at its discretion, allow intervention when the applicant's claim or defense has a question of law or fact in common with the main action. See Fed.R.Civ.P. 24(b). In light of considerations of equity, judicial economy, and the presence of common questions of fact with respect to the underlying action, the Court finds that permissive intervention in this case would also be proper. Accordingly,
IT IS ORDERED that Allstate Insurance Company's motion to file its intervention is GRANTED.