United States District Court, D. Maryland
MEMORANDUM AND ORDER
K. Bredar United States District Judge
before the Court are motions to intervene by Natasha Johnson
and Katiara Harper. (ECF Nos. 36 & 37.) Plaintiff opposes
the motions in their entirety (ECF Nos. 43 & 44), and
Defendants oppose the motions in part (ECF No. 42), as
explained infra. No hearing is required. Local Rule
105.6 (D. Md. 2016).
indicate they resided in properties owned or operated by
Defendants and, during the time of their residence, they
suffered lead-paint poisoning; consequently, they have filed
separate, personal injury lawsuits against Defendants in
state court. Movants indicate that, in the event of judgments
entered in their favor against Defendants in the state forum,
they would look to Defendants' liability insurance
policy, issued by CX Re or its predecessor, for satisfaction
of their judgments. Thus, they seek to intervene in this
federal case to protect their contingent interests in the
proceeds of the policy-a policy with respect to which CX Re
has filed this action for rescission and damages based upon
CX Re's contention that Defendants made material
misrepresentations in their application for insurance.
assert they are entitled to intervene as of right pursuant to
Federal Rule of Civil Procedure 24(a)(2); failing that, they
request permissive intervention under Rule 24(b). The Court
concludes Movants may not intervene as of right but they will
be granted permissive intervention.
24(a)(2) provides that upon “timely motion, the court
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 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.” Plaintiff
and Defendants oppose Movants' intervention of right.
intervene as a matter of right under Fed.R.Civ.P. 24(a)(2),
the moving party must show that (1) it has an interest in the
subject matter of the action, (2) disposition of the action
may practically impair or impede the movant's ability to
protect that interest, and (3) that interest is not
adequately represented by the existing parties.”
Newport News Shipbuilding & Drydock Co. v. Peninsula
Shipbuilders' Ass'n, 646 F.2d 117, 120 (4th Cir.
1981). According to the United States Court of Appeals for
the Fourth Circuit, a contingent interest in the outcome of
other pending litigation constitutes a significantly
protectable interest that satisfies Rule 24(a)(2). Teague
v. Bakker, 931 F.2d 259, 261 (4th Cir. 1991). That
requirement is satisfied here by Movants' interest in
their pending litigation against Defendants.
Court can find no basis, however, for finding that Movants
have adequately shown the second required element of Rule
24(a)(2), i.e., that “disposition of the
action may practically impair or impede the movant's
ability to protect that interest.” In the
Teague case, the Court noted that if the insurance
company there were to prevail in its declaratory action
against the defendant insureds such that the court were to
rule against the defendants on the question of coverage, then
the intervenors would have to satisfy any judgment against
the defendants from assets other than the policy proceeds,
“and the existence and amount of such assets are
questionable” due to defendants' poverty.
Id. Movants here have made no similar showing that
the existence and amount of Defendants' assets are
questionable and, therefore, have not established the second
element for intervention as of right.
the third element, whether Movants' interest will be
adequately represented by Defendants, Plaintiff and the
Defendants dispute the notion that they are not representing
the interest they share with Movants in having the insurance
proceeds available to satisfy any judgment. They point to
what the Court agrees is vigorous defense litigation as
proof. Because Movants and Defendants share the same ultimate
objective-payment of insurance proceeds, Defendants enjoy a
presumption of adequate representation, which Movants have
failed to rebut by demonstrating adversity of interest,
collusion, or nonfeasance. See Virginia v. Westinghouse
Elec. Corp., 542 F.2d 214, 216 (4th Cir. 1976).
Intervention of right will be denied.
Defendants opposed intervention of right in the instant suit
by Movants, Defendants have not opposed Movants'
permissive intervention under Rule 24(b), which provides
in pertinent part,
(1) In General. On timely motion, the court may
permit anyone to intervene who: . . .
(B) has a claim or defense that shares with the main action a