United States District Court, D. Arizona
Honorable John J. Tuchi, United States District Judge.
issue is Wesco Insurance Company's (“Movant”)
Motion to Intervene (Doc. 88, Mot.), to which Plaintiff filed
a Response (Doc. 89, Resp.) and Movant replied (Doc. 90,
Reply). Defendant Gilbert Hospital did not file a responsive
brief, and thus neither takes a position opposing nor
supporting the Motion. Defendant Principal Financial Group
has previously been dismissed from this action. (Doc. 96.)
filed suit against his employer, Defendant Gilbert Hospital
(“Defendant”) claiming breach of fiduciary duty
under ERISA. (Doc. 45, Am. Compl.) The Court has summarized
the relevant factual background in other Orders, such as the
Order granting Defendant Principal Financial Group's
Motion to Dismiss (Doc. 96 at 1-3.) The Court will not
restate the history behind Plaintiff's claims here.
is the insurance provider for Defendant's parent company.
(Mot. at 2.) Pursuant to their insurance policy, Movant
retained defense counsel on behalf of Defendant in this
matter. (Mot. at 2.) Defendant then filed a Notice of
Involuntary Bankruptcy Case Filing on May 17, 2018. (Doc.
74.) Movant's appointed counsel, Mr. Daniel Garrison,
subsequently moved to withdraw from this case pursuant to
local Rule of Civil Procedure 83.3(b)(2). (Doc. 76.) The
Court granted Mr. Garrison's Motion to Withdraw on June
7, 2018, and set a deadline of July 13, 2018, for Defendant
to retain new counsel. (Doc. 79.)
25, 2018, Movant filed a Motion to Intervene, alleging that
when Movant attempted to retain new counsel before the
Court's deadline, Defendant's receiver refused to
cooperate. (Mot. at 2.) Movant alleges that “[t]he
receiver indicated it had no interest in a defense unless
[Movant] confirmed unreserved coverage for both defense or
immunity; otherwise, Plaintiff could obtain judgment and seek
a portion of liquidated assets in the receivership
proceedings.” (Mot. at 2.) Movant now seeks to
intervene for two reasons: “(a) to obtain a declaration
that the receiver's refusal to consent to defense under
reservation is a breach of the cooperation clause [of
parties' insurance coverage agreement], or alternatively
(b) to protect its interests in the litigation by mounting a
defense against claims made by Plaintiff against
[Defendant.]” (Mot. at 2.)
Intervention as a Matter of Right
Rule of Civil Procedure 24(a) permits intervention as a
matter of right on a timely motion. While the Ninth Circuit
Court of Appeals construes Rule 24(a) liberally in favor of
potential intervenors, the applicant for intervention bears
the burden of demonstrating that he has satisfied the
elements for intervention. See Ctr. for Biological
Diversity v. U.S. Bureau of Land Mgmt., 266 F.R.D.
369, 372 (D. Ariz. 2010); see also Prete v.
Bradbury, 438 F.3d 949, 954 (9th Cir. 2006). Applicants
are required to satisfy a four-part test for intervention by
(1) the motion must be timely; (2) the applicant must claim a
“significantly protectable” interest relating to
the property or transaction which is the subject of the
action; (3) the applicant must be so situated that the
disposition of the action may as a practical matter impair or
impede its ability to protect that interest; and (4) the
applicant's interest must be inadequately represented by
the parties to the action.
United States v. Aerojet Gen. Corp., 606 F.3d 1142,
1148 (9th Cir. 2010) (quoting Cal. ex rel. Lockyer v.
United States, 450 F.3d 436, 440 (9th Cir. 2006)).
“Failure to satisfy any one of the requirements is
fatal to the application . . . .” Perry v.
Proposition 8 Official Proponents, 587 F.3d 947, 950
(9th Cir. 2009) (citation omitted). In determining whether
the requirements are met, “courts are guided primarily
by practical and equitable considerations, and the
requirements for intervention are broadly interpreted in
favor of intervention.” United States v. Alisal
Water Corp., 370 F.3d 915, 919 (9th Cir. 2004).
Rule of Civil Procedure 24(b) governs permissive
intervention. An applicant must demonstrate:
“‘(1) independent grounds for jurisdiction; (2)
[that] the motion is timely; and (3) [that] the
applicant's claim or defense, and the main action, have a
question of law or a question of fact in common.'”
S. Cal. Edison Co. v. Lynch, 307 F.3d 794, 803 (9th
Cir. 2002) (quoting United States v. City of L.A.,
288 F.3d 391, 403 (9th Cir. 2002)). Even where those three
elements are satisfied, however, the district court retains
the discretion to deny permissive intervention. Id.
(citing Donnelly v. Glickman, 159 F.3d 405, 412 (9th
Cir. 1998)). In exercising its discretion, a court must
consider whether intervention will unduly delay or prejudice
the original parties and should consider whether the
applicant's interests are adequately represented by the
existing parties and judicial economy favors intervention.
Venegas v. Skaggs, 867 F.2d 527, 530-31 (9th Cir.