Boettcher et al v. Loosier et al
Filing
78
ORDER granting 69 Motion for Pretrial/Status Conference; granting 74 Motion to Intervene. Signed by Judge Jon Phipps McCalla on 5/4/2016. (McCalla, Jon)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE AT MEMPHIS
PAUL RAYMOND BOETTCHER and
JOYCE DIANE BOETTCHER,
Husband and Wife,
)
)
)
)
Plaintiffs,
)
)
v.
)
No. 2:14-cv-02796-JPM-dkv
)
HOUSTYN NICOLE LOOSIER and
)
JAMES LOOSIER,
)
)
Defendants.
)
________________________________________________________________
ORDER GRANTING SHELTER MUTUAL INSURANCE COMPANY’S MOTION FOR
PRETRIAL/STATUS CONFERENCE
AND
ORDER GRANTING SHELTER MUTUAL INSURANCE COMPANY’S MOTION TO
INTERVENE
________________________________________________________________
Before the Court is Shelter Mutual Insurance Company’s
(“Shelter”) Motion to Intervene, filed April 8, 2016.
74.)
(ECF No.
Also before the Court is Shelter Mutual Insurance
Company’s Motion for Pretrial/Status Conference, filed March 29,
2016.
(ECF No. 69.)
For the following reasons, Shelter’s Motion to Intervene
and Motion for Pretrial/Status Conference are GRANTED.
I.
BACKGROUND
This case concerns a motor vehicle accident that allegedly
occurred on October 21, 2013, at 7:35 a.m. at S. Third Street
and Horn Lake Road in Shelby County, Tennessee.
(Compl. ¶ 1,
ECF No. 1.)
Plaintiffs allege that Defendant Houstyn Nicole
Loosier crashed a 2006 Ford F150, owned by Defendant James
Loosier, into a third party’s vehicle, which in turn was pushed
into the rear of a 2007 Ford Focus driven by Plaintiff Paul
Raymond Boettcher.
(Id. ¶ 3.)
Plaintiffs resolved their claims
with Houstyn Nicole Loosier and James Loosier (“the Loosier
Defendants”), and all claims against the Loosier Defendants were
dismissed.
(See ECF Nos. 39, 40.)
Plaintiffs’ only remaining
claims involve their own underinsured motorist (“UIM”) carrier,
Shelter Mutual Insurance Company.
(See Compl. ¶ 6.)
Plaintiffs filed a Complaint against the Loosier Defendants
on October 17, 2014, and thereby gave notice of the filing of
the suit to Shelter under section 56-7-1206(a) of the Tennessee
Code and section 40-284(d) of the Kansas Statutes.
(See Compl.
¶ 6.)
The Loosier Defendants filed an Answer on November 17,
2014.
(ECF No. 9.)
2014.
(ECF No. 12.)
Shelter filed an Answer on December 15,
On August 28, 2015, Shelter filed a Motion to Sever,
seeking to try the insurance issues separately from the tort
issues in this case.
(ECF No. 37.)
On October 9, 2015,
Plaintiffs and the Loosier Defendants filed a Joint Motion for
Dismissal with Prejudice.
(ECF No. 39.)
On the same day, the
Court granted the Joint Motion for Dismissal (ECF No. 40) and
denied as moot Shelter’s Motion to Sever (ECF No. 41).
2
On October 21, 2015, Shelter moved for an independent
medical exam.
(ECF No. 42.)
After a hearing, Magistrate Judge
Vescovo denied as moot the motion without prejudice.
45, 46.)
(ECF Nos.
On February 9, 2016, Shelter filed a Motion for
Permission to Identify Dr. Riley Jones for Purposes of an
Independent Medical Examination of Plaintiff Joyce Boettcher and
Permission to Take Dr. Jones’ Evidentiary Deposition Prior to
Trial.
(ECF No. 51.)
Magistrate Judge Vescovo granted the
motion on March 29, 2016.
(ECF No. 70.)
On February 9, 2016, Shelter also filed a Motion in Limine
to Exclude Gross Medical Billings.
(ECF No. 52.)
2016, Plaintiffs responded in opposition.
On March 25,
(ECF No. 66.)
Plaintiffs filed a Notice of Supplemental Authority on April 13,
2016.
(ECF No. 76.)
This motion is still pending before the
Court.
On March 1, 2016, Plaintiffs filed a Motion to Dismiss
Without Prejudice, seeking dismissal of this action under Rule
41(a)(2) of the Federal Rules of Civil Procedure so that they
may re-file the case against Shelter in Kansas.
Shelter responded in opposition on March 7, 2016.
(ECF No. 55.)
(ECF No. 56.)
On March 17, 2016, the Court held a telephonic hearing on the
motion, during which Plaintiffs challenged the Court’s subject
matter jurisdiction.
(Min. Entry, ECF No. 58.)
The Court
ordered supplemental briefing on the jurisdictional issue.
3
(ECF
No. 59.)
Plaintiffs filed their supplemental Memorandum Brief
in Support of Plaintiffs’ Motion to Dismiss on March 18, 2016.
(ECF No. 60.)
Shelter filed its Supplemental Response in
Opposition to Plaintiffs’ Motion to Dismiss on March 21, 2016.
(ECF No. 61.)
The Court denied Plaintiffs’ Motion to Dismiss on
March 22, 2016.
(ECF No. 62.)
On March 25, 2016, Plaintiffs filed a Notice of Proof of
Relevant Kansas Law, asserting that Kansas law governs the
instant action.
(ECF No. 67.)
On March 29, 2016, Shelter filed
a Motion for Pretrial/Status Conference, asserting that “under
Kansas law, which controls in this case, Shelter is not
currently a defendant in this lawsuit and the lawsuit is subject
to dismissal on this basis.”
(ECF No. 69 at 1.)
a telephonic status conference on April 5, 2016.
ECF No. 72.) 1
The Court held
(Min. Entry,
At the status conference, Shelter expressed its
desire to permissively intervene in the instant action so that
it may proceed before the Court.
Plaintiffs maintained that
this action should be dismissed and argued that intervention is
not appropriate.
On April 8, 2016, Shelter filed the instant Motion to
Intervene, arguing that it has a right to intervene under Rule
24(a)(2) and that it should be permitted to do so to correct any
1
In holding the status conference, the Court granted the relief sought
in Shelter’s Motion for Pretrial/Status Conference. Shelter’s Motion for
Pretrial/Status Conference is, therefore, GRANTED.
4
procedural discrepancy.
(ECF No. 74.)
Plaintiffs did not file
a response.
II.
LEGAL STANDARD
Pursuant to Rule 24(a)(2), a third party may intervene as
of right when it:
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 [its] ability to
protect
its
interest,
unless
existing
parties
adequately represent that interest.
Fed. R. Civ. P. 24(a)(2).
A party seeking to intervene as of
right must establish four elements: “(1) timeliness of the
application to intervene, (2) the applicant’s substantial legal
interest in the case, (3) impairment of the applicant’s ability
to protect that interest in the absence of intervention, and (4)
inadequate representation of that interest by parties already
before the court.”
Mich. State AFL-CIO v. Miller, 103 F.3d
1240, 1245 (6th Cir. 1997).
In determining whether a motion to intervene is timely, a
court must consider all relevant circumstances, including:
(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.
5
Stupak-Thrall v. Glickman, 226 F.3d 467, 473 (6th Cir 2000)
(quoting Jansen v. City of Cincinnati, 904 F.2d 336, 340 (6th
Cir. 1990)).
III. ANALYSIS
In the Complaint, Plaintiffs aver that they “hereby give
notice of the filing of this suit upon their UIM Carrier
[Shelter Mutual Insurance Company] under T.C.A. § 56-7-1206(a),
and under K.S.A. § 40-284(d).”
(Compl. ¶ 6, ECF No. 1.)
Throughout the case, Plaintiffs and Shelter have consistently
referenced Tennessee law, which permits a UIM carrier to “file
pleadings and take other action allowable by law in the name of
the owner and operator of the uninsured motor vehicle or in its
own name,” without formal intervention.
1206(a).
Tenn. Code Ann. § 56-7-
Following Plaintiffs’ Notice of Proof of Relevant
Kansas Law, however, Shelter filed a Motion for Pretrial/Status
Conference and agreed that Kansas law controls the insurance
issues in the instant matter.
(ECF No. 69.)
Under Kansas law, the UIM carrier has the option to
intervene in the liability action.
Loucks v. Farm Bureau Mut.
Ins. Co., 101 P.3d 1271, 1276-77 (Kan. Ct. App. 2004).
If the
insurer elects to intervene, it is named as a party to the
action and “gains a voice in the outcome of the case.”
Id.
If
the insurer elects not to intervene, the trier of fact will not
6
hear evidence of liability insurance coverage, but the insurer
is nonetheless bound by any judgment in the liability action.
Id.
Although Plaintiffs have resolved their claims against the
Loosier Defendants, the Court, having heard argument only
referring to Tennessee law, did not enter a final judgment in
this action.
Now that the parties agree that Kansas law
controls the insurance issues, the Court must determine whether
the action may proceed.
First, the Court considers whether a
Motion to Intervene by a UIM carrier, filed after the claims
against the tortfeasor have been resolved but before the entry
of judgment, is timely.
Second, the Court considers whether
Shelter may intervene as a matter of right pursuant to Rule
24(a)(2).
Third, the Court addresses the effect of intervention
on the Court’s subject matter jurisdiction.
A.
Timeliness of Motion to Intervene
As an initial matter, a motion to intervene is not per se
untimely merely because it is filed after the claims between the
original parties have been resolved.
In Penick v. Columbus
Education Association, 574 F.2d 889 (6th Cir. 1978) (per
curiam), the Columbus Education Association (“CEA”) “sought to
intervene after the District Court had determined that the
Columbus and Ohio State Boards of Education should be held
liable for unconstitutional segregation of the Columbus public
7
schools, but before a desegregation plan had been submitted and
approved by the court.”
Penick, 574 F.2d at 890.
The United
States District Court for the Southern District of Ohio denied
intervention as untimely.
Id. at 890-91.
Although the Sixth
Circuit found that the district court did not abuse its
discretion in denying the CEA’s motion to intervene, the Sixth
Circuit specifically noted that the “decision [was] reached
without prejudice to the right of the CEA to seek intervention
at a later date should it become apparent that CEA interests are
not being adequately represented in further proceedings before
the District Court.”
Id. at 891.
Thus, the Sixth Circuit
allowed for the possibility of intervention at an even later
date.
See id.; see also Flynt v. Lombardi, 782 F.3d 963, 967
(8th Cir. 2015) (per curiam) (permitting a third-party to
intervene post-judgment to challenge the sealing of judicial
records); Smuck v. Hobson, 408 F.2d 175, 181-82 (D.C. Cir. 1969)
(permitting post-judgment intervention where intervenorappellants were inadequately represented in the decision not to
appeal and noting that “the leading cases in which intervention
has been permitted following a judgment tend to involve unique
situations”).
Considering the five factors set forth by the Sixth
Circuit, and focusing on the unique posture of this case, the
Court finds that Shelter’s Motion to Intervene is timely.
8
1.
Point to Which the Suit Has Progressed
This case was filed in October 2014, approximately eighteen
months before Shelter filed the instant motion to intervene.
During this time, the parties have engaged in discovery,
Plaintiffs have resolved all claims against the Loosier
Defendants, and the parties have begun filing motions in limine
in anticipation of trial.
(See, e.g., ECF Nos. 23, 40, 52.)
Ordinarily, this factor would weigh against intervention.
case, however, presents a unique situation.
This
Often, the
intervention of a third party late in proceedings would disrupt
the schedule or delay the conclusion of the case.
See, e.g.,
Johnson v. City of Memphis, 73 F. App’x 123, 132 (6th Cir. 2003)
(finding the first factor weighed against timeliness because
“extensive litigation activity” had already taken place); Shy v.
Navistar Int’l Corp., 291 F.R.D. 128, 133 (S.D. Ohio 2013)
(“[A]n examination of the timing of the intervenor’s motion in
light of ‘the point to which the suit has progressed’ is most
relevant when the motion arrives at a point in time that would
require reopening discovery, delaying trial, or some other
prejudicial delay to the parties.”).
Because of the
misapplication of Tennessee law, Shelter has participated in all
proceedings thus far, as if it were a party.
Permitting Shelter
to intervene would not delay the resolution of this matter, but
would, in fact, allow the case to proceed to trial and to
9
conclude in a timely manner.
As a result, this factor is not
pertinent to the analysis in this particular case, and the Court
places minimal weight on this factor.
See Stupak-Thrall, 226
F.3d at 475 (“The absolute measure of time between the filing of
the complaint and the motion to intervene is one of the least
important [considerations].
A more critical factor is what
steps occurred along the litigation continuum during this period
of time.” (citation omitted)).
2.
Purpose of Intervention
“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)).
“If a third
party seeks merely an opportunity to present an argument or
expertise, participation as an amicus curiae may adequately
protect its interests.”
Id. (citing Stupak-Thrall, 226 F.3d at
475).
Shelter seeks to intervene “to protect its interests in
this action” and “to correct any procedural discrepancy before
proceeding to trial.”
(ECF No. 74-1 at 3-4.)
Shelter has spent
considerable time and resources preparing this case for trial,
under the misunderstanding that it did not need to formally
intervene.
Now that the parties agree that Kansas law governs
10
the insurance issues, Shelter seeks to intervene to avoid
dismissal pursuant to Kansas law and re-litigation of this
action from inception in Kansas.
Shelter also notes that Kansas law provides that if a UIM
carrier chooses not to intervene in a lawsuit between its
insured and an underinsured motorist, the UIM carrier is bound
by the judgment received in the lawsuit against the underinsured
motorist.
(Id. at 3 (citing Loucks, 101 P.3d at 1276-77).)
As
a result, any judgment in this case will have preclusive effect
and limit Shelter’s legal rights.
Thus, Shelter seeks intervention for two compelling
reasons: (1) to avoid duplicative litigation and preserve
resources, and (2) to participate in an action by which it will
be bound.
This factor, therefore, weighs in favor of
timeliness.
3.
Length of Time Preceding Intervention During
Which the Proposed Intervenor Knew or Should Have
Known of Its Interest in the Case
Plaintiffs’ Complaint, filed October 17, 2014, provided
that “Plaintiffs hereby give notice of the filing of this suit
upon their UIM carrier [Shelter Mutual Insurance Company] under
T.C.A. § 56-7-1206(a), and under K.S.A. § 40-284(d).”
¶ 6, ECF No. 1 (emphasis added).)
December 15, 2014.
(Compl.
Shelter filed an Answer on
(Answer, ECF No. 12.)
Although Shelter
denied in its Answer that UIM coverage was applicable in this
11
case (id. at 1), Shelter knew that it had a possible interest in
the case no later than December 2014, approximately fourteen
months before filing a motion to intervene.
Shelter also knew
or should have known that its UIM policy with Plaintiffs was
entered into under Kansas law based on the insurance contract as
well as the Complaint.
This factor, therefore, weighs against a
finding of timeliness.
Plaintiffs, however, did not file a Notice of Proof of
Relevant Kansas Law until March 25, 2016.
(ECF No. 67.)
Only
four days later, on March 29, 2016, Shelter filed a Motion for
Pretrial/Status Conference to discuss the conflict of law
issues.
(ECF No. 69.)
Immediately following a status
conference, Shelter filed the instant Motion to Intervene on
April 8, 2016.
(ECF No. 74.)
Thus, although Shelter should
have considered that Kansas law applied to the insurance issues
in December 2014, it notified the Court and sought to intervene
very soon after it realized intervention was appropriate.
The Court also recognizes that Plaintiffs, too, proceeded
under the assumption that Tennessee law applied to all issues in
this case and that formal intervention was not necessary.
Permitting Plaintiffs to benefit from this mistake would
contravene principles of equity.
See Jackson v. Richards Med.
Co., 961 F.2d 575, 587 n.11 (6th Cir. 1992) (recognizing that,
in the employment discrimination context, courts have
12
consistently applied equitable principles to prevent one party
from being penalized for the other’s mistakes).
Accordingly,
the Court gives minimal weight to this factor.
4.
Prejudice to the Original Parties Due to the
Proposed Intervenor’s Failure to Promptly
Intervene After It Knew or Reasonably Should Have
Known of Its Interest in the Case
“One of the core purposes of the timeliness requirement is
to prevent disruptive, late-stage intervention that could have
been avoided by the exercise of reasonable diligence.”
P.R.
Tel. Co. v. San Juan Cable, LLC, 298 F.R.D. 28, 35 (D.P.R.
2014).
“The only prejudice relevant to the timeliness
determination is incremental prejudice from a would-be
intervenor’s delay in intervening, not prejudice from the
intervention in and of itself.”
Davis, 560 F. App’x at 493.
The Court finds that Plaintiffs will suffer no prejudice as
a result of Shelter’s intervention.
Throughout this litigation,
Plaintiffs have proceeded as if Shelter were a proper
participant in this matter.
Plaintiffs and Shelter have
exchanged disclosures, engaged in discovery, and participated in
hearings together for the last eighteen months.
Although
Plaintiffs cited to Kansas law in the Complaint (see Compl.
¶ 6), Plaintiffs referred exclusively to Tennessee law in their
legal memoranda until they filed the Notice of Proof of Relevant
Kansas Law (ECF No. 67) on March 25, 2016.
13
Plaintiffs object to
the intervention on the grounds that they would prefer to
dismiss this case and re-file in Kansas, but the inconvenience
of litigating in Tennessee stems from Plaintiffs’ choice of
venue rather than Shelter’s delay in seeking intervention.
Permitting Shelter to intervene at this late stage will result
in no prejudice to Plaintiffs; it will merely formalize
Shelter’s ongoing participation in this action.
5.
Unusual Circumstances Militating For or Against
Intervention
The parties’ confusion regarding the application of
Tennessee or Kansas law places this case in a unique posture.
Based on the assumption that Tennessee law applied, Shelter
participated in this matter since inception without intervening
in the action.
Under Kansas law, such participation by a UIM
carrier would have been inappropriate absent a formal motion to
intervene.
Shelter seeks to correct its defect by intervening
at this late stage in the proceedings, only three months before
trial.
Plaintiffs oppose intervention because they wish to
dismiss the instant case and file an action against Shelter in a
more convenient forum.
At this point, the parties have spent
considerable time and resources litigating this case.
Initiating a new action in Kansas would result in duplicative
litigation and delay resolution of the issues presented in this
case.
Accordingly, the Court finds that the unusual
14
circumstances of this case strongly militate in favor of
intervention.
Considering these factors, and placing particular weight on
the fourth and fifth factors, the Court finds that Shelter’s
Motion to Intervene is timely.
B.
Right to Intervene Under Rule 24(a)(2)
Shelter argues that it may intervene as “of right” under
Rule 24(a)(2) of the Federal Rules of Civil Procedure.
As
discussed above, a party seeking to intervene under Rule
24(a)(2) must establish: “(1) timeliness of the application to
intervene, (2) the applicant’s substantial legal interest in the
case, (3) impairment of the applicant’s ability to protect that
interest in the absence of intervention, and (4) inadequate
representation of that interest by parties already before the
court.”
Miller, 103 F.3d at 1245.
The Court finds Shelter’s motion timely, see supra Part
III.A.
Additionally, it is undisputed that Shelter has a legal
interest in this action as Plaintiffs’ UIM carrier.
It is
further undisputed that neither Plaintiffs nor the Loosier
Defendants adequately represent Shelter’s position.
Moreover, Shelter has demonstrated that its interests would
be impaired in the absence of intervention.
establishing this element is minimal.
The burden of
Miller, 103 F.3d at 1247.
Under Kansas law, Shelter is “bound by any judgment” in this
15
action, regardless of whether it intervenes.
at 1277.
Loucks, 101 P.3d
As a result, a judgment in the instant case would have
res judicata effect and limit Shelter’s legal rights.
For this
reason, Kansas grants insurers the right to intervene in actions
by their insureds against underinsured motorists.
Haas v.
Freeman, 693 P.2d 1199, 1204 (Kan. 1985).
Before 1966, the Federal Rules of Civil Procedure required
a party seeking to intervene as of right to demonstrate that he
would be bound in a res judicata sense by any judgment in the
case.
See Sam Fox Publ’g. Co. v. United States, 366 U.S. 683,
685 n.2 (1961).
The 1966 amendments “relaxed the degree to
which a party must be affected by disposition of the ‘action.’”
Babcock & Wilcox Co. v. Parsons Corp., 430 F.2d 531, 541 (8th
Cir. 1970); see also Spring Constr. Co. v. Harris, 614 F.2d 374,
377 (4th Cir. 1980).
Thus, although Shelter is not required to
show that it will be bound by any judgment in the instant case,
such a showing is sufficient to satisfy the “relaxed” Rule
24(a)(2) requirements.
Accordingly, the Court finds that Shelter may intervene as
of right pursuant to Rule 24(a)(2).
C.
Effect of Intervention on Subject Matter Jurisdiction
Permitting Shelter to intervene does not affect the Court’s
subject matter jurisdiction.
Under Lee-Lipstreu v. Chubb Group
of Insurance Cos., 329 F.3d 898, 899-900 (6th Cir. 2003), the
16
direct action provision of 28 U.S.C. § 1332(c)(1) 2 does not apply
in a dispute between an insured and his own insurance company,
regardless of whether the insurer intervenes.
See also
Ljuljdjuraj v. State Farm Mut. Auto. Ins. Co., 774 F.3d 908,
910-12 (6th Cir. 2014).
IV.
CONCLUSION
For the foregoing reasons, Shelter’s Motion to Intervene is
GRANTED.
Shelter having already appeared as a Defendant in this
action, no further action is necessary to formalize Shelter’s
intervention on the docket.
IT IS SO ORDERED, this the 4th day of May, 2016.
/s/ Jon Phipps McCalla
JON PHIPPS McCALLA
UNITED STATES DISTRICT JUDGE
2
Pursuant to 28 U.S.C. § 1332(c)(1), “in any direct action against the
insurer of a policy or contract of liability insurance,” such insurer is
considered to be a resident of, inter alia, the state of which the insured is
a citizen.
Applying the direct action provision to a dispute solely between
an insured and [his or] her own insurance company would result in
an absurdity—federal courts would never hear common insurance
disputes because the insured and the insurer, the plaintiff and
the defendant, would always be considered citizens of the same
state.
Lee-Lipstreu, 329 F.3d at 899-900.
17
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?