Gulley v. FLW, LLC et al

Filing 104

ORDER GRANTING (75) THE HARTFORD INSURANCE COMPANY'S AMENDED MOTION TO INTERVENE AS PLAINTIFF AND DENYING (77) THE HARTFORD INSURANCE COMPANY'S MOTION TO INTERVENE AS PLAINTIFF AS MOOT in case 1:14-cv-01226-STA-egb. Signed by Chief Judge S. Thomas Anderson on 8/31/17. Associated Cases: 1:14-cv-01226-STA-egb, 1:14-cv-01138-STA-egb, 1:14-cv-02976-STA-egb(Anderson, S. Thomas)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
EASTERN DIVISION
______________________________________________________________________________
ROBERT GULLEY,
Plaintiff,
vs.
No. 1:14-cv-01138-STA-egb
FISHING HOLDINGS, LLC;
FLW, LLC;
OPERATION BASS, INC.;
OUT FRONT MARKETING, LLC;
SHINICHI FUKAE;
Defendants.
________________________________________
In the Matter of the Complaint of
Operation Bass, Inc. as Owner
Pro Hac Vice of the 2011 Ranger
No. 1:14-cv-01226-STA-egb
Z520 20’ 9” Boat with Hull
Identification Number RGR04271A111,
for Exoneration from or Limitation of Liability;
________________________________________
In the Matter of the Complaint of
Fishing Holdings, LLC. as Owner
of the 2011 Ranger Z520 20’ 9”
No. 1:14-cv-02976-STA-egb
Boat with Hull Identification Number
RGR04271A111, for Exoneration
from or Limitation of Liability;
______________________________________________________________________________
ORDER GRANTING THE HARTFORD INSURANCE COMPANY’S AMENDED
MOTION TO INTERVENE AS PLAINTIFF AND
DENYING THE HARTFORD INSURANCE COMPANY’S MOTION TO INTERVENE
AS PLAINTIFF AS MOOT
______________________________________________________________________________

Before the Court is the Amended Motion to Intervene as Plaintiff (ECF No. 52)1 of
Movant The Hartford Insurance Company. Respondent, Plaintiff Robert Gulley, has filed a
Response (ECF Nos. 53 & 54) in opposition. After seeking and receiving leave from the Court,
Movant filed a Reply (ECF No. 59). For reasons to follow, Movant’s Amended Motion is
GRANTED. As it also appears to the Court that Movant’s initial Motion to Intervene (ECF No.
51) is still pending, that Motion is DENIED as moot.

I.

PROCEDURAL BACKGROUND
On June 13, 2014, Respondent initiated (ECF No.1) this action in admiralty against a

number of defendants. Respondent quickly amended (ECF No. 4) his Complaint four days later.
All Defendants filed an Answer (ECF Nos. 15, 16, & 17) by Sept. 22, 2014. The Court entered a
Scheduling Order (ECF No. 19) on March 26, 2015 that set February 12, 2016, as the deadline
for all discovery to be completed.

The Court consolidated the matter with two related

Complaints for Exoneration From or Limitation of Liability (ECF No. 22) on May 18, 2015.
The Court permitted the parties to amend (ECF No. 29) the Scheduling Order on Dec. 10, 2015.
Defendant Operation Bass, Inc., filed an Amended Answer (ECF No. 33) on Dec. 22, 2015. On
June 9, 2016, the Court amended the Scheduling Order (ECF No. 41), which extended the
deadline for completing all discovery to December 23, 2016. The parties again moved (ECF No.
43) to amend the Scheduling Order and continue the trial date on September 22, 2016. There is
some confusion in the record at this point because the case was then reassigned (ECF No. 49),
but the Court reset the trial date to September 25, 2017 (ECF No. 45), and the discovery deadline
was further extended to May 31, 2017. On April 5, 2017, Movant filed a Motion to Intervene
1

All ECF numbers are from Case No. 1:14-cv-01138-STA-egb.
2

(ECF Nos. 50 & 51). On April 11, 2017, it filed the instant Motion (ECF No. 52), amending its
original Motion. Respondent filed his Response (ECF Nos. 53 & 54) on April 25, 2017. Movant
then filed its Reply (ECF 59) on May 12, 2017. In granting (ECF No. 100) Defendant Shinichi
Fukae’s Motion to Continue Trial (ECF No. 89) on August 28, 2017, the Court continued the
trial to January 22, 2018, and reset a number of deadlines accordingly (ECF Nos. 101 & 102).

II.

LEGAL STANDARD
Under Rule 24 of the Federal Rules of Civil Procedure, a non-party may move to

intervene in a civil action. The rule provides for two types of intervention: (1) intervention of
right, which requires that the Court allow a non-party to intervene, and (2) permissive
intervention, which is granted at the Court's discretion. Fed. R. Civ. P. 24. Rule 24 is to be
construed broadly in favor of intervention. Stupak-Thrall v. Glickman, 226 F.3d 467, 472 (6th
Cir. 2000) (quoting Purnell v. Akron, 925 F.2d 941, 950 (6th Cir. 1991)). The Court will analyze
the instant Motion under Rule 24(a)(2).2 In so doing, the “[C]ourt must permit anyone to
intervene who . . . claims an interest relating to the property or transaction that is the subject of
the action, and is so situated that dispos[ition] 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.” Fed. R. Civ. P. 24(a)(2). The Rule requires Movant to demonstrate that: (1) the
Motion was timely filed; (2) Movant possesses a substantial legal interest in the case; (3)
2

For reasons unknown to the Court, Movant did not specify how it is proceeding under
Rule 24 but mentions “a clear statutory right” and refers to section 50-6-112 of the Tennessee
Code Annotated, Reply Brief in Supp. of Am. Motion to Intervene and Incorporated Mem. in
Supp., at 2, May 12, 2017, ECF No. 59, as well as section 342.0011 et seq. of the Kentucky
Revised Statutes. Am. Motion to Intervene as Pl. and Incorporated Mem. in Supp., at 2, Apr. 11,
2017, ECF No. 52. As Rule 24(a)(1) requires an unconditional right to intervene given by a
federal statute, the Court assumes that Movant relies on Rule 24(a)(2). See Fed. R. Civ. P. 24(a).
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Movant's ability to protect its interest will be impaired without intervention; and (4) neither
Respondent nor Defendants will adequately represent Movant's interest. Blount-Hill v. Zelman,
636 F.3d 278, 283 (6th Cir. 2011) (citing Grutter v. Bollinger, 188 F.3d 394, 397–98 (6th Cir.
1999)). Because each element is mandatory, failure to satisfy any one of them will require the
Court to deny Movant’s attempt to intervene. See United States v. Michigan, 424 F.3d 438, 443
(6th Cir. 2005) (quoting Grubbs v. Norris, 870 F.2d 343, 345 (6th Cir. 1989)). The Court,
however, cannot refuse an intervenor that does meet all four requirements. Homayed v. Maytag
Co., 1987 U.S. Dist. LEXIS 15549, at *2 (E.D. Mich. Dec. 21, 1987).

III.

DISCUSSION
A.

Timeliness

The Supreme Court has made it clear that timeliness is a threshold issue for a motion to
intervene, regardless of whether the intervenor seeks to proceed by intervention as of right or
permissive intervention. NAACP v. New York, 413 U.S. 345, 365 (1973) (citing Fed. R. Civ. P.
24). The Sixth Circuit has articulated five factors for courts to consider in determining the
timeliness of a motion to intervene:
(1) the point to which the suit has progressed;
(2) the purpose for which intervention is sought;
(3) the length of time preceding the application during which the proposed
intervenors knew or should have known of their interest in the case;
(4) the prejudice to the original parties due to the proposed intervenors' failure to
promptly intervene after they knew or reasonably should have known of their
interest in the case; and
(5) the existence of unusual circumstances militating against or in favor of
intervention.
Blount-Hill, 636 F.3d at 283 (quoting Jansen v. Cincinnati, 904 F.2d 336, 340 (6th Cir. 1990)).
“No one factor alone is dispositive.” United States v. City of Detroit, 712 F.3d 925, 937 (6th Cir.

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2013) (Clay, J., dissenting) (quoting Blount-Hill, 636 F.3d at 284). And “[t]here is no bright-line
rule to determine the timeliness of a motion to intervene.” S. H. v. Stickrath, 251 F.R.D. 293,
297 (S.D. Ohio 2008).
After evaluating all of the relevant factors, the considerations weigh in favor of Movant.
Accordingly, the Court must find that Movant’s intervention is timely.

1.

Progression of the suit

Under the first factor, Respondent argues that Movant waited until discovery had nearly
ended to file the instant Motion. Movant, however, responds that it does not need to retake any
depositions or depose any new witnesses, insisting that any discovery would be minimal.
“[T]he first factor . . . . is . . . properly directed to the finality of any judgments or orders
entered.” City of Detroit, 712 F.3d at 937–38 (citing Stupak-Thrall v. Glickman, 226 F.3d 467,
475 (6th Cir. 2000). The Sixth Circuit concluded in Blount-Hill that this factor weighed against
the intervenors in that case because
extensive progress has been made in this litigation, including the (1) decision
granting in part Defendants' first motion to dismiss; (2) completion of a pretrial
conference and issuance of a scheduling order; (3) additional discovery and
discussions about stipulations of fact; (4) filing of a Third Amended Complaint;
and (5) filing of a second motion to dismiss, to which Plaintiffs responded.
636 F.3d at 285. In Stupak-Thrall, this factor also weighed against the intervenor because
“discovery was closed, the experts were producing their reports, and the court's previouslyidentified ‘finish line’ . . . was fast approaching.” 226 F.3d at 475. But that case also noted two
instances where this factor weighed in the intervenor’s favor: Mountain Top Condominium
Ass’n v. Dave Stabbert Master Builder, Inc., 72 F.3d 361, 370 (3rd Cir. 1995), which had
permitted intervention despite four years passing between the initiation of the action and the

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motion to intervene because “there were no depositions taken, dispositive motions filed, or
decrees entered during the four year period in question,” and Usery v. Brandel, 87 F.R.D. 670,
675 (W.D. Mich. 1980), which permitted intervention after ten months because “the suit had ‘not
advanced beyond early discovery.’” Stupak-Thrall, 226 F.3d at 475.
In the current case, no dispositive motions have been resolved, and those now pending
were filed more than two months after Movant filed this Motion. Similarly, the parties have not
yet had their pre-trial conference, which has now been moved to January of next year. The
scheduling order, however, has been issued and modified. And Movant did not file this Motion
until discovery had been ongoing for some time, though it had not yet closed. On balance, this
factor weighs in Movant’s favor, albeit not heavily. The Court finds the present facts to be
distinguishable from Blount-Hill and Stupak-Thrall because discovery had not yet been
completed upon Movant’s filing of the instant Motion, and with the recent resetting of the PreTrial Conference and Trial dates, the “finish line” is not “fast approaching.”

2.

Purpose of the intervention

Movant seeks to intervene for the purpose of protecting any potential rights with respect
to the recovery of workers’ compensation benefits paid. Movant claims that, because this is a
legitimate purpose in a timeliness analysis under Rule 24, this factor should weigh heavily in its
favor. Respondent asserts that this purpose is improper because Respondent lacks a copy of the
relevant insurance policy to know if Movant provided coverage for maintenance and cure.
Further, Respondent suggests that Movant would be unlikely to recover anything from
Defendants.

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“District courts should evaluate the purpose of intervention in terms of the ‘importance of
the legal interests asserted.’” Davis v. Lifetime Capital, Inc., 560 F. App’x 477, 491 (6th Cir.
2014) (quoting Clarke v. Baptist Mem’l Healthcare Corp., 427 F. App’x 431, 436 (6th Cir.
2011)). Some examples of compelling reasons are “to avoid duplicative litigation and . . . to
participate in an action by which [the intervenor] will be bound.” Boettcher v. Loosier, 2016
U.S. Dist. LEXIS 59192, at *11–12 (W.D. Tenn. May 4, 2016). But the intervenor must seek to
do more than “merely an opportunity to present an argument or expertise.” Davis, 560 F. App’x
at 491 (citing Stupak-Thrall, 226 F.3d at 475)).
The Court is convinced that Movant’s purpose in intervention is proper. Movant seeks to
protect its own rights to workers’ compensation benefits stemming from the facts of this case
rather than engage in separate actions against the parties. Respondent makes a number of
arguments as to why any recovery by Movant is unlikely, but the Court finds these points
irrelevant to the limited scope of this factor: Movant’s purpose in intervention. Therefore, this
factor weighs heavily in Movant’s favor.

3.

Length of time the intervenor knew of its interest

Both Movant and Respondent agree that Movant knew about this litigation for at least a
year prior to the filing of the instant Motion. And Respondent suggests that Movant should have
known about it well before that time. Movant argues that the suit has not progressed past
discovery and that its intervention will not cause any unnecessary delay.
“A party must have been aware of the risk that his interest may be affected by the
litigation, and that [its] interest may not be fully protected by the existing litigants.” Stotts v.
Memphis Fire Dep't, 679 F.2d 579, 583 (6th Cir. 1982) (citing United Airlines, Inc. v.

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McDonald, 432 U.S. 385, 394 (1977); Mich. Ass’n for Retarded Citizens v. Smith, 657 F.2d 102,
105 (6th Cir. 1981)). But “[a]ctual notice is not required.” Davis, 560 F. App’x at 492 (citing
Stotts, 679 F.2d at 583).
Here, Movant has had actual notice for at least year, and may have had constructive
notice for a longer period. Its arguments in justification, however, are aimed at the first and
fourth factors. As Movant offers no compelling reason, or even an uncompelling reason, for that
matter, the Court must find that the third factor weighs heavily in Respondent’s favor.

4.

Prejudice to the original parties

Defendants do not oppose the instant Motion, so the Court assumes they will not be
prejudiced if Movant is permitted to intervene. Respondent suggests he is prejudiced because of
the resources expended in resolving the instant Motion. Movant argues that the efforts expended
to draft a four-page memorandum are not sufficient to weigh against intervention under this
factor. The Court agrees. The sorts of prejudice that would weigh against intervention involve a
duplication of efforts in discovery or dispositive motions. See Blount-Hill v. Zelman, 636 F.3d
278, 286 (6th Cir. 2011). A duplication of efforts does not seem to a problem here because
Movant filed its motion before discovery’s close, insists any discovery it would require would be
minimal, and filed this Motion before any dispositive motions were filed. Therefore, the Court
finds that this factor weighs in Movant’s favor.

5.

Unusual circumstances militating in favor of intervention

Movant argues that the complex legal issues involved in this litigation require Movant’s
interests to be represented directly and fully. Respondent doubts such circumstances are present

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and suggests, citing to the Kentucky workers’ compensation statute, that the fact that Movant
may have simply paid workers’ compensation benefits by mistake is an unusual circumstance
that should weigh against intervention. Movant, however, points to the competing workers’
compensation statutes of Kentucky and Tennessee, as well as the additional possibility that this
case might not be a Jones Act case at all, in support of its contention that this case’s complexity
weighs in favor of intervention.
The Sixth Circuit “does not have an established list of additional factors that it
considers.” Davis, 560 F. App’x at 494. “It is not error for a court to consider the total balance
of the timeliness factors under this prong.” Id.
The Court finds no “unusual circumstance” weighing in favor of or against intervention
in this case. But on the whole, a balancing of the other enumerated factors ultimately weighs in
Movant’s favor. While Movant knew for at least a year of its interest, the suit has not progressed
to an advanced state, Movant has a proper purpose, and the original parties will not be
prejudiced. Accordingly, the Court finds this intervention to be timely under Rule 24.

B.

Substantial Legal Interest3

The Sixth Circuit “subscribe[s] to a rather expansive notion of the interest sufficient to
invoke intervention of right.” Reliastar Life Ins. Co. v. MKP Invs., 565 F. App’x 369, 371 (6th
Cir. 2014) (quoting Grutter v. Bollinger, 188 F.3d 394, 398 (6th Cir. 1999)).
But our case law's requirement that the proposed intervenors possess “a
significant legal interest in the subject matter of the litigation” is not without
meaning. . . . [T]he applicant for intervention “must have a direct and substantial

3

Respondent only raises the issue of timeliness in its brief in opposition to Movant’s
intervention. The Court will, however, briefly consider the remaining requirements to ensure
that Movant’s intervention would be in compliance with Rule 24.
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interest in the litigation,” such that it is a “real party in interest in the transaction
which is the subject of the proceeding.”
Id. at 371–72 (citations omitted). Such an interest is not present where the intervenor is simply
seeking to protect its own economic interests in one of the original party’s continued solvency.
Id. at 372 (citations omitted).

But the assertion of a state-created right of subrogation is

sufficient. In Homayed v. Maytag Co., the United States District Court for the Eastern District of
Michigan found that a health insurance company’s payment of medical care created a right to
subrogation under Michigan law and was, therefore, a sufficient interest for the health insurance
company to intervene under Rule 24(a) in action by the insured against the manufacturer of the
washing machine that allegedly caused the insured’s injuries. 1987 U.S. Dist. LEXIS 15549
(E.D. Mich. Dec. 21, 1987).
. . . [the insurance company] is asserting a state created right of subrogation.
Because settlement might occur at any time, [the insurance company’s]
subrogation interest might be impaired at any time. Furthermore, the existing
parties do not adequately represent [the insurance company’s] interest. Although
the plaintiffs may wish to obtain the largest possible judgment or settlement, they
may wish to receive double recovery by avoiding paying [the insurance
company]. If they pay the plaintiffs, the defendants will undoubtedly fight any
double recovery by [the insurance company].
Id. at *5. Though the reasoning in Homayed is not binding upon this Court, the Court finds it
persuasive because Tennessee law affords Movant with the right to intervene in this action. See
Tenn. Code Ann. § 50-6-112(c)(1). Therefore, the Court finds Movant to have a substantial legal
interest in this case.

C.

Impairment of Movant’s Interest Without Movant’s Intervention

“To satisfy [the impairment] element of the intervention test, a would-be intervenor must
show only that impairment of its substantial legal interest is possible if intervention is denied.

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This burden is minimal.” Davis v. Lifetime Capital, Inc., 560 Fed. Appx. 477, 495 (6th Cir.
2014) (quoting Grutter v. Bollinger, 188 F.3d 394, 399 (6th Cir. 1999)). The Court is again
persuaded by the reasoning of the District Court in Homayed: “Because settlement might occur
at any time, [Movant’s] subrogation interest might be impaired at any time.” 1987 U.S. Dist.
LEXIS 15549, at *5 (E.D. Mich. Dec. 21, 1987). The same is true of this case. Therefore, the
Court finds that Movant’s interest in this matter could be impaired without intervention.

D.

Representation of Movant’s Interest

“The proposed intervenor's burden in showing inadequacy is minimal.” Davis v. Lifetime
Capital, Inc., 560 Fed. Appx. 477, 495 (6th Cir. 2014) (citations and internal quotations omitted).
“The proposed intervenor[] need show only that there is a potential for inadequate
representation.” Grutter v. Bollinger, 188 F.3d 394, 400 (6th Cir. 1999) (citations omitted).
Once again, the Court finds the reasoning of the District Court in Homayed persuasive: “[T]he
existing parties do not adequately represent [Movant’s] interest. Although the plaintiffs may
wish to obtain the largest possible judgment or settlement, they may wish to receive double
recovery by avoiding paying [Movant]. If they pay the plaintiff[], the defendants will
undoubtedly fight any double recovery by [Movant].” 1987 U.S. Dist. LEXIS 15549, at *5 (E.D.
Mich. Dec. 21, 1987). The same is again true of this case. Therefore, the Court finds that
Movant’s interest is not adequately represented without intervention.

IV.

CONCLUSION
Because the instant Motion is timely, Movant has a substantial legal interest in the case,

Movant’s interest could be impaired without intervention, and none of the original parties are

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likely to adequately represent Movant’s interest, the Court finds that Movant’s intervention
satisfies the requirements of Fed. R. Civ. P. 24(a). Therefore, Movant’s Amended Motion to
Intervene is GRANTED. And because Movant’s initial Motion to Intervene is still pending, that
Motion is DENIED as moot.
It is so ORDERED.
s/ S. Thomas Anderson
S. THOMAS ANDERSON
CHIEF UNITED STATES DISTRICT JUDGE

Date: August 31, 2017.

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