Allied World Assurance Company v. Lee Memorial Health System et al

Filing 72

ORDER denying 66 Lexington Insurance Company's Motion to Intervene for the Purpose of Moving to Stay Summary Judgment Ruling Pending Discovery. Signed by Judge Sheri Polster Chappell on 3/7/2019. (LMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
ALLIED WORLD ASSURANCE
COMPANY,
Plaintiff,
v.

Case No: 2:18-cv-158-FtM-38UAM

LEE MEMORIAL HEALTH SYSTEM,
LESLEY HOLMAN, DOMINGO
PEREZ TROY, and MARIA PEDRO
RUPERTO,
Defendants.
/
OPINION AND ORDER1
Before the Court is Lexington Insurance Company’s Motion to Intervene for the
Purpose of Moving to Stay Summary Judgment Ruling Pending Discovery (Doc. 66), and
Plaintiff Allied World Assurance Company’s opposition (Doc. 70). For the below reasons,
the Court denies Lexington’s motion.
This case involves an insurance coverage dispute. Allied issued two insurance
policies to Lee Memorial. And it now seeks a declaration that neither policy covers Lee

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Memorial in an underlying medical negligence case2 because Lee Memorial (1) knew
about the incident before Allied insured it; and (2) reported the incident to its prior insurer,
Lexington, who insured Lee Memorial when the incident happened. Discovery has closed
here, and Allied has moved for summary judgment (Doc. 61).
Despite this case’s posture, Lexington wants to intervene.

Lexington is a

defendant in Lee Memorial’s declaratory judgment action for insurance coverage in the
medical negligence case. See Lee Memorial Health System v. Lexington Ins. Co., No.
2:18-cv-617-FtM-38UAM (M.D. Fla.). There, Lexington argues it need not cover Lee
Memorial and points to Allied as the source for insurance coverage. Because Lexington
asserts that common issues of law and fact exist between this case and the other
insurance suit, it wants to intervene here to stay Allied’s pending motion for summary
judgment. Specifically, Lexington requests that
it be permitted to intervene in this case at the present time for
the purpose of moving to stay entry of any ruling on the
summary judgment motion filed by Allied World pending
discovery on critical facts of whether Lee Memorial’s risk
management department had knowledge of an actual or
alleged act error or omission by Lee Memorial prior to the
inception of the Allied World policy.
(Doc. 66 at 2). Allied opposes intervention, arguing that Lexington cannot intervene just
to stay a case and intervention is unduly prejudicial because of the cases’ different
procedural postures.
Federal of Civil Procedure Rule 24(b) governs permissive intervention. It says a
court may allow an entity to intervene who “has a claim or defense that shares with the

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The medical negligence case is before the Undersigned and styled as Holman v. United
States, No. 2:18-cv-76-FtM-38MRM (M.D. Fla.). It arises from a brain injury a patient
suffered during labor and delivery in a Lee Memorial hospital. (Doc. 1 at 4).

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main action a common question of law or fact.” Fed. R. Civ. P. 24(b)(1)(B). A motion to
intervene “must state the grounds for intervention and be accompanied by a pleading that
sets out the claim or defense for which intervention is sought.” Fed. R. Civ. P. 24(c).
Courts have considerable discretion in deciding Rule 24(b) motions. See, e.g., Purcell v.
BankAtlantic Financial Corp., 85 F.3d 1508, 1513 (11th Cir. 1996) (stating Rule 24(b)
intervention is “wholly discretionary” even where the requirements of Rule 24(b) are
satisfied).

And “[i]n exercising its discretion, the court must consider whether the

intervention will unduly delay or prejudice the adjudication of the original parties’ rights.”
Fed. R. Civ. P. 24(b)(3).
After careful consideration of the parties’ briefs and applicable law, the Court
declines Lexington’s intervention request for three reasons. First, this case involves an
insurance contract dispute between Allied and Lee Memorial, and them alone. Although
both cases involve contract interpretation connected to the medical negligence case, the
issue in each case is whether coverage exists under a specific policy—not which of the
two company’s policies cover Lee Memorial.
Second, only Lexington’s interest would be served by intervention.

Although

Lexington wants to weigh in on Allied’s dispute with Lee Memorial, that is not a reason to
delay this case. Discovery has closed. Allied has moved for summary judgment. Allied
and Lee Memorial are set for mediation tomorrow.
Third, Lexington wants to intervene to stay summary judgment, and not to assert
a claim or defense. Such a reason for intervention is improper. See, e.g., Home Design
v. Banyan, No. 5:07-cv-5-Oc-10GRJ, 2007 WL 9719238, at *1 (M.D. Fla. Nov. 21, 2007)
(“Where, as here, a party seeks to intervene not to press a claim or defense, or to align

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itself either as a plaintiff or as a defendant - but only to obtain a stay - Rule 24 of the
Federal Rules of Civil Procedure is not an appropriate vehicle for seeking to stay an
action.” (footnote omitted)). Lexington need not intervene because, as it recognizes, any
decision on Allied’s motion for summary judgment will not bind Lexington.
In conclusion, to ensure the “just, speedy, and inexpensive determination” of this
case, the Court denies Lexington’s motion. See Fed. R. Civ. P. 1.
Accordingly, it is now
ORDERED:
Lexington Insurance Company’s Motion to Intervene for the Purpose of Moving to
Stay Summary Judgment Ruling Pending Discovery (Doc. 66) is DENIED.
DONE and ORDERED in Fort Myers, Florida this 7th day of March 2019.

Copies: All Parties of Record

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