Opinion
Case No. 00-2207-JWL
November 14, 2002
MEMORANDUM AND ORDER
John Richard Ludbrooke Youell, individually and on behalf of certain underwriters at Lloyd's of London, subscribing to Certificate No. DOM 3000357 ("the underwriters"), brought this declaratory judgment action against Stoico Restaurant Group, Inc. ("SRG"). The underwriters, who issued an insurance policy to SRG, argued that they should be relieved of their duty to pay a $1.7 million claim under the policy because SRG breached the policy's cooperation clause by admitting liability in a state court securities fraud case. The court agreed and issued an order, dated August 20, 2002, granting plaintiffs' motion for summary judgment. The order concluded: "The court declares that the underwriters are relieved of their duty to perform under the Directors and Officer[s] and Company Reimbursement Indemnity Insurance Certificate, DOM 300357, effective from December 11, 1996 to December 11, 1997 issued to Stoico Restaurant Group, Inc. based on defendants' breach of the contract's cooperation clause."
The insurance policy is entitled: "Directors and Officers and Company Reimbursement Indemnity Insurance Certificate, DOM 300357." It was effective from December 11, 1996 to December 11, 1997.
This matter is before the court on the motion of Spaghetti Jack's, Inc. and Sub Stuff, Inc. to intervene and seek an amendment or modification of the court's August 20, 2002 order (Doc. 224), and the motion of Cathy Martsolf, Timothy Jeffery, and James Ash ("DO's") to intervene and seek relief from judgment as well as obtain an extension of time to file a notice of appeal (Doc. 229). Specifically, the parties seek to intervene in this action to have the court clarify the language of its summary judgment order. They believe that the court's language could be construed as invalidating coverage under the policy entirely. Because it is clear that the court ruled only that the underwriters were relieved of their duty to pay the $1.7 million claim submitted by SRG, not that coverage under the policy was abrogated altogether, the court denies both motions to intervene. This ruling makes the DO's motion for an extension of time to file a notice of appeal moot because they are not a party to this action.
ANALYSIS
The parties seek to intervene in this action pursuant to Federal Rule of Civil Procedure 24(a). Under Rule 24(a)(2), intervention of right is permitted if: "(1) the application is `timely'; (2) `the applicant claims an interest relating to the property or transaction which is the subject of the action'; (3) the applicant's interest `may as a practical matter' be `impair[ed] or impede[d]'; and (4) `the applicant's interest is [not] adequately represented by existing parties.' " Coalition of Arizona/New Mexico Counties for Stable Econ. Growth v. Dep't of the Interior, 100 F.3d 837, 840 (10th Cir. 1996) (quoting Rule 24(a)(2)).
Fed.R.Civ.P. 24(a)(2), governing intervention of right, states:
Upon timely application anyone shall be permitted to intervene in an action: . . . (2) 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.
Here, the motion to intervene fails because the third element is lacking.
The applicants' interests will not, as a practical matter, be impaired or impeded. The applicants obviously were not parties to this action when the court issued its summary judgment order. And while the court understands the applicants' concern that the court's language could be construed as invalidating the insurance policy in its entirety, such a construction is not permissible. The court was confronted with and decided the narrow issue of whether SRG's breach of the cooperation clause relieved the underwriters of their duty to pay the $1.7 million claim SRG submitted. Any argument that the court decided a broader issue is negated by the fact that such a ruling would be tantamount to an advisory opinion. "It is fundamental that federal courts do not render advisory opinions and that they are limited to deciding issues in actual cases and controversies." U.S. v. Burlington N. R. Co., 200 F.3d 679, 699 (10th Cir. 1999) (quoting Norvell v. Sangre de Cristo Dev. Co., Inc., 519 F.2d 370, 375 (10th Cir. 1975)). "[S]uch requests advocate a general interest, common to all citizens and do not purport to redress any specific injuries Plaintiffs may have suffered." Id. (quoting Chrisman v. Commissioner of Internal Revenue, 82 F.3d 371, 373 (10th Cir. 1996)). It is clear, therefore, that despite the broad language in the court's order, it had no constitutional authority to decide an issue broader than the one before it. That is, the court could not have decided whether the policy covers claims other than the $1.7 million claim SRG submitted to the underwriters. Accordingly, the applicants' interests cannot be impaired by the court's ruling, and the court must therefore deny their motions to intervene.
The DO's also seek to extend the time to file a notice of appeal from the court's summary judgment order. The motion, however, is contingent upon being permitted to intervene and become a party to this action. Because the court denied the DO's motion to intervene, the motion to extend the time to file a notice of appeal is moot. Of course, both of the applicants are free to appeal this ruling.
IT IS THEREFORE ORDERED BY THE COURT THAT the motions to intervene by Spaghetti Jack's and Subs Stuff (Doc. 224) and Cathy Martsolf, Timothy Jeffery, and James Ash (Doc. 229) are denied, and the motion of Cathy Martsolf, Timothy Jeffery, and James Ash to extend the time to file a notice of appeal (Doc. 229) is moot.