CASTORO & CO. INC. v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, INC. et al
Filing
17
MEMORANDUM OPINION & ORDER denying 6 Capitol's Motion to Intervene. Signed by Magistrate Judge Douglas E. Arpert on 5/22/2014. (eaj)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
CASTORO & CO., INC.
Civil Action No.: 14-1305 (MAS)
· Plaintiff,
v.
MEMORANDUM OPINION
AND ORDER
HARTFORD ACCIDENT AND
INDEMNITY COMPANY, INC.,
SENTRY INSURANCE CO. and JOHN
DOE I-X (being fictitious persons), and
XYZ CORP. I-X (being fictitious
Corporations),
RECEIVED
MAY 2 2··2014
Defendants.
AT 8·0:\(J
M
W;Li~'IAM T WALSH CLERK
ARPERT, U.S.M..J
Before the Court is a Motion by Capitol Environmental Services, Inc. ("Capitol") for
leave to Intervene in this case pursuant to Federal Rule of Civil Procedure 24(a)(2) and (b) [dkt.
no. 6]. Defendants Hartford Accident and Indemnity Company ("Hartford") and Sentry
Insurance A Mutual Company ("Sentry") have opposed this Motion [dkt. nos. 13 and 12]. For
the reasons set forth below, Capitol's Motion is DENIED.
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
The facts of this dispute are well known to the parties and need not be repeated at length.
Briefly, this matter arises out of Plaintiff Castoro & Co., Inc.'s ("Castoro") action seeking a
Declaratory Judgment regarding Hartford's and Sentry's obligations under separate insurance
policies issued to Castoro. See Plaintiffs Amended Complaint at p. 10, dkt. entry no. 5. In
dispute is whether the policies issued to Castoro require Hartford and/or Sentry to defend and
indemnify Castoro in connection with environmental contamination at Castoro's property in
West Windsor, New Jersey. Id.
Capitol performed environmental remediation services for
Castoro on the property in 2013. See Capitol's Memorandum of Law ("Memo") at p. 3. Capitol
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was partially paid by Castoro but is still owed $306,224.60.
Id.
According to Capitol,
"[d]isposition of the action without Capitol's participation may impede its collection efforts."
See Memo at p. 2.
II.
LEGAL STANDARD
Federal Rule of Civil Procedure 24, in pertinent part, provides:
(a) INTERVENTION OF RIGHT. On timely motion, the court must permit
anyone to intervene who:
(2) claims an interest relating to the property or transaction that is
the subject of the action, and is so situated that disposing of the
action may as a practical matter impair or impede the movant's
ability to protect its interest, unless existing parties adequately
represent that interest.
(b) PERMISSIVE INTERVENTION.
(1) In General. On timely motion, the court may permit anyone to
intervene who:
(A) is given a conditional right to intervene by a federal
statute; or
(B) has a claim or defense that shares with the main action
a common question of law or fact.
In the Third Circuit, a litigant seeking intervention as of right must establish: (1) a timely
application to intervene; (2) a sufficient interest in the litigation; (3) a threat that the interest will
be impaired or affected, as a practical matter by disposition of the action; and (4) inadequate
representation of the applicant's interest by existing parties to litigation. Kleissler v. U.S. Forest
Service, 157 F.3d 964, 969 (3d Cir. 1998). Each requirement must be met in order to intervene
as of right. Id. A party seeking permissive intervention must establish: (1) a timely application
for intervention; (2) a common question of law or fact; and (3) the intervention does not unduly
delay or prejudice the rights of the original parties. Brody v. Spang, 957 F.2d 1108, 1124 (3d
Cir. 1992). The decision to allow intervention is within the sound discretion of the Court. Id.
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III.
THE PARTIES' ARGUMENTS
Capitol contends that it is entitled to intervene under Fed. R. Civ. P. 24, both as a matter
of right and permissively. The Court will consider these arguments in turn.·
A. Intervention of Right
Initially, Capitol seeks to intervene as a matter of right pursuant to Fed. R. Civ. P.
24(a)(2). See Memo at p. 4. Capitol argues that intervention is proper because it has an interest
relating to the property that is the subject of the action. Id. Capitol cites Mountain Top Condo.
Assn. v. Dave Stabbert Master Builder. Inc., 72 F.3d 361, 369 (2d Cir. 1988), to support its
argument that the Motion to Intervene is timely inasmuch as the "critical inquiry" into timeliness
is "what proceedings of substance on merits have occurred." See Memo at p. 5.
Capitol
maintains that the case is still in the early stage of the proceedings because there have been no
hearings, proceedings or rulings on any substantive matter. Id. In addition, there have been no
dispositive motions filed, discovery has not commenced, and the original parties will not suffer
any prejudice. Id.
Capitol also maintains that it has an interest in the subject matter of this litigation. ld.
Capitol maintains that in determining whether an interest is protectable, the Third Circuit has
"relied on pragmatic considerations such as the benefits derived from consolidation of disputes
into one proceeding." Kleissler, 157 F.3d at 970. See Memo at p. 6. Capitol asserts that the
approximately $300,000 owed by Plaintiff is a legally protectable interest inasmuch as Castoro is
seeking to have Sentry and Hartford pay for Capitol's remediation services. See Memo at p. 7.
In addition, Capitol asserts that the disposition of the litigation may impair Capitol's ability to
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protect its interest. Specifically, Capitol maintains that if the parties reach a settlement then the
settlement may impair, reduce or bar Capitol's ability to collect monies it is owed. Id.
Finally, Capitol maintains that none of the parties adequately represent Capitol's interest.
See Memo at p. 8. Capitol cites Mountain Top Condo. Assn. v. Dave Stabbert Master Builder.
Inc., 72 F.3d 361, 369 (2d Cir. 1988), to argue that Capitol meets the "minimal" burden of
showing that the representation of its interests "may be" inadequate. See Memo at p. 9. Capitol
maintains that there is a possibility that Castoro and Hartford and Sentry may develop settlement
strategies that are adverse to Capitol's interests. Id.
By contrast, Hartford and Sentry conten
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