QBE Insurance Corporation v. Green et al
Filing
20
MEMORANDUM OPINION AND ORDER: (1) Parties shall have 21 days from the entry of this order to RESPOND to A.H.'s 16 MOTION to Intervene Permissively pursuant to Fed. R. Civ. P. 24(b). (2) 6 MOTION to Intervene is DENIED. Signed by Judge Joseph M. Hood on 9/30/2014.(SCD)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
QBE INSURANCE CORPORATION,
)
)
)
)
)
)
)
)
)
)
Plaintiff,
v.
LARRY GREEN and
CLAUDIA GREEN,
Defendants.
Civil Case No.
5:14-cv-300-JMH
MEMORANDUM OPINION
AND ORDER
***
This matter is before the Court upon A.H., a minor, by and
through her Parents and Next Friends, Lindsay and Michael Hall’s
Motion
to
24(a)(2),
Intervene
in
the
[DE
above
6],
pursuant
referenced
to
Fed.
matter.
R.
Civ.
Plaintiff
P.
QBE
Insurance Corporation has filed a response [DE 15], and A.H. a
reply [DE 16], and this motion is ripe for adjudication.
I. Background
This action stems from a complaint brought by A.H. in state
court, alleging damages arising out of a dog bite she received
while at the home of Larry and Claudia Green. The Greens own a
condo in Heritage Place Condominiums. QBE Insurance Corporation
filed the instant action with this Court seeking a declaratory
judgment on its duty to cover the Greens for the underlying
state court claim under QBE’s liability insurance policy with
Heritage Place.
A.H. seeks to intervene as of right in this action, arguing
that the outcome of the Greens’ coverage under QBE’s policy will
determine the amount of compensation available to her in the
state
action
represented
and
by
that
the
her
existing
interests
parties.
are
not
Plaintiff
adequately
contends
that
A.H. does not have a substantial, legal interest in the subject
matter
of
the
case
and
that
her
interests
are
adequately
represented by the Greens and therefore, intervention of right
is inappropriate. In her reply, A.H. also adds, for the first
time, a request for permissive intervention under Fed. R. Civ.
P. 24(b).
II. Analysis
A. Intervention of Right
A party seeking intervention of right under Rule 24(a)(2)
must
show:
proposed
subject
“(1)
the
intervenor
matter
of
motion
to
has
a
the
case;
intervene
substantial
(3)
the
is
legal
timely;
(2)
the
interest
in
the
proposed
intervenor's
ability to protect their interest may be impaired in the absence
of intervention; and (4) the parties already before the court
cannot adequately protect the proposed intervenor's interest.
Coal. to Defend Affirmative Action v. Granholm, 501 F.3d 775,
779 (6th Cir. 2007) (citing Grutter v. Bollinger, 188 F.3d 394,
397–98 (6th Cir. 1999)). Plaintiff raises no objection to the
conclusion that A.H.’s motion was timely filed, so the Court
2
turns
to
the
three
remaining
factors
to
determine
whether
intervention is appropriate.
With regard to the second factor, A.H. does not have a
substantial, legal interest in the subject matter of this case.
The Sixth Circuit has “a rather expansive notion of the interest
sufficient to invoke intervention of right,” Grutter, 188 F.3d
at
398.
interest
Granholm,
However,
“this
will
do.”
501
F.3d
does
Coal.
775,
not
to
780
mean
Defend
(6th
that
any
articulated
Affirmative
Cir.
2007).
Action
Rather,
v.
“the
proposed intervenor must have a direct and substantial interest
in the litigation.” Grubbs v. Norris, 870 F.2d 343, 346 (6th
Cir. 1989). Furthermore, the Sixth Circuit has found that “an
applicant is not due intervention as a matter of right where the
applicant seeks only to protect the assets of a party to the
litigation in order to ensure that its own contingent claims to
those assets remain valuable in the future.” Reliastar Life Ins.
Co. v. MKP Investments, 565 F. App'x 369, 372 (6th Cir. 2014)
(holding
that
the
proposed
interveners
interest
was
not
a
substantial, legal interest and denying intervention as a matter
of right in the context of an insurance declaratory judgment
action);1 see also United States v. Tennessee, 260 F.3d 587, 595
(6th Cir. 2001).
1
Notably, in support of its holding, the Sixth Circuit in Reliastar cited
favorably to a case from the Eighth Circuit, which found intervention
inappropriate on facts analogous to those at bar: the case stemmed from an
3
A.H. seeks to intervene to protect the Greens’ insurance
coverage so that those funds may be included in a potential
judgment
future,
award
and
to
solely
A.H.
in
state
economic
court.
interest,
With
A.H.
a
does
contingent,
not
have
a
substantial, legal interest in this case. A.H. argues that this
interest is not contingent because the state court action rests
on a theory of strict liability. However, that matter is still
pending and no judgment has issued. Thus, while A.H.’s success
in state court may be likely, it is not certain. In addition,
A.H.
cites
to
Kentucky’s
Unfair
Claims
Settlement
Practices
statute for the proposition that A.H. is a party in interest to
QBE’s insurance contract. See KRS 304.12-230. This argument is
unpersuasive, given that “a third-party claimant may only sue
the insurance company under USCPA when coverage is not contested
or already established.” Pryor v. Colony Ins., 414 S.W.3d 424,
433 (Ky. Ct. App.), review denied (Dec. 11, 2013).
As
protect
to
her
the
third
interest
and
is
fourth
not
factors,
impaired
A.H.’s
because
ability
the
to
existing
defendants adequately represent her interests. A.H’s burden to
prove these elements is “minimal ... it is sufficient that the
movant prove that representation may be inadequate.” Michigan
underlying tort claim in Arkansas state court, the insurers of the state
court defendant brought a declaratory judgment action in federal court
seeking to clarify its obligations to those defendants, and the state court
plaintiffs sought to intervene and were denied. Med. Liab. Mut. Ins. Co. v.
Alan Curtis LLC, 485 F.3d 1006, 1007 (8th Cir. 2007); Reliastar, 565 F. App’x
at 372.
4
State AFL-CIO v. Miller, 103 F.3d 1240, 1247 (6th Cir. 1997).
“Nevertheless,
presumption
share
the
of
applicants
adequate
same
ultimate
for
intervention
representation
objective
that
as
a
must
overcome
arises
party
to
when
the
the
they
suit.”
United States v. Michigan, 424 F.3d 438, 443-44 (6th Cir. 2005).
A.H. has not overcome the presumption here. A.H. and the
Greens share the same ultimate objective in this declaratory
judgment
action:
insurance
to
policy.
secure
A.H.
the
Greens’
contends
that
coverage
the
under
Greens
QBE’s
are
her
adversaries in state court, but this does not change the Greens’
motivation
to
Reliastar,
565
secure
Fed.
insurance
App’x
at
coverage
373
in
this
(holding
action.
that,
See
although
adversaries in a separate civil action, the proposed intervenors
and existing defendants shared the same ultimate goal in the
declaratory action before the court). Furthermore, upon motion
by the Greens, this Court has set aside the entry of default
against them and the Greens have obtained counsel and filed an
Answer and Counterclaim in this action. There is nothing to
suggest
interests
that
will
going
be
forward
the
unenthusiastic,
Greens’
for
the
defense
of
their
Greens
have
good
reason to protect their interest given the potential judgment
against them in state court. See Jordan v. Michigan Conference
of Teamsters Welfare Fund, 207 F.3d 854, 863 (6th Cir. 2000)
(holding
that
a
movant
cannot
5
demonstrate
inadequate
representation
if,
among
other
things,
he
cannot
show
the
existing party, as representative, has “failed in fulfilling its
duty”).
Therefore, the Court holds that A.H. has not satisfied the
requirements of Fed. R. Civ. P. 24(a) and is not entitled to
intervene as of right.
2. Permissive Intervention
In
her
Reply,
A.H.
argues
for
the
first
time
that
permissive intervention is warranted pursuant to Fed. R. Civ. P.
24(b). [DE 16]. The Court will construe this as A.H.’s motion to
intervene permissively.
To intervene permissively, a proposed intervenor
must establish that the motion for intervention is
timely and alleges at least one common question of law
or fact. ...[T]he district court must then balance
undue delay and prejudice to the original parties, if
any, and any other relevant factors to determine
whether, in the court's discretion, intervention
should be allowed.
United States v. Michigan, 424 F.3d 438, 445 (6th Cir.
2005). However, the existing parties have not had an opportunity
to respond to A.H.’s request for permissive intervention. The
Court will defer ruling until they have had an opportunity to do
so.
Accordingly, IT IS ORDERED:
6
(1)
that the parties shall have twenty-one (21) days from
the entry of this order to RESPOND to A.H.’s motion to intervene
permissively pursuant to Fed. R. Civ. P. 24(b) [DE 16]; and
(2) that A.H., a Minor, By and Through her Parents and Next
Friends, Lindsay and Michael Hall’s Motion to Intervene [DE 6]
is DENIED.
This the 30th day of September, 2014.
7
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