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National Union Fire Insurance Company of Pittsburgh, PA. v. Intrawest ULC

United States District Court, D. Colorado

February 18, 2014

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, Plaintiff,
v.
INTRAWEST ULC f/k/a INTRAWEST CORPORATION, FEDERAL INSURANCE COMPANY, NATIONAL FIRE INSURANCE COMPANY OF HARTFORD, and CONTINENTAL CASUALTY COMPANY, Defendants.

ORDER

KATHLEEN M. TAFOYA, Magistrate Judge.

This matter is before the court on Intrawest U.S. Holdings, Inc., Intrawest Resorts, Inc., Upper Bench Development Corporation, Intrawest California Holdings, Inc., Sierra Three Star Development Corporation, The Stratton Corporation, and Intrawest Stratton Development Corporation's ("Intervenors") "Motion to Intervene Under Rule 24" (Doc. No. 51 [Mot.], filed April 29, 2013). Plaintiff filed its response in opposition on May 20, 2013 (Doc. No. 73 [Resp.]), and the Intervenors filed their reply on June 13, 2013 (Doc. No. 78 [Reply]). This motion is ripe for ruling.

FACTS

In the Complaint, Plaintiff seeks a declaratory judgment, pursuant to 28 U.S.C. §§ 2201 and 2202, that the extent of insurance coverage it provides under an Owner Controlled Insurance Program (the "OCIP Program") to Intrawest and all insureds is collectively $5, 000, 000. (Doc. No. 1, ¶ 1.)

The Intervenors are insureds under the OCIP and claim they have significant interests in the outcome of this litigation. The Intervenors developed various projects covered by the OCIP in Vermont, California, and Colorado or were parent companies to the developers of various projects. The Intervenors claim at least two substantial interests in this litigation. First, the Intervenors explain that each of the projects developed by the California and Vermont entities is the subject of litigation in the respective jurisdictions. Each of those projects was enrolled in the OCIP. Each entity claims entitlement to proceeds under the National Union policies. The collective benefits to which these entities are entitled substantially exceed $5, 000, 000. Thus, each entity has as material interest in the outcome of National Unions request for declaratory relief, which seeks to limit the total insurance available for all projects to $5, 000, 000. Second, the Intervenors seek to assert breach of contract and bad faith claims against National Union. ( See Mot., Ex. A.)

ANALYSIS

1. Legal Standard

Federal Rule of Civil Procedure 24(a)(2) provides that, on timely motion, the court must permit intervention as of right to anyone 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.

Fed. R. Civ. P. 24(a)(2). Under Tenth Circuit law interpreting this rule, "an applicant may intervene as a matter of right if (1) the application is timely, (2) the applicant claims an interest relating to the property or transaction which is the subject of the action, (3) the applicant's interest may be impaired or impeded, and (4) the applicant's interest is not adequately represented by existing parties." Elliott Indus. Ltd. P'ship v. B.P. Am. Prod. Co., 407 F.3d 1091, 1103 (10th Cir. 2005).

Further, the Tenth Circuit "follows a somewhat liberal line in allowing intervention." Utah Ass'n of Counties v. Clinton, 255 F.3d 1246, 1249 (10th Cir. 2001). "[T]he factors mentioned in the Rule are intended to capture the circumstances in which the practical effect on the prospective intervenor justifies its participation in the litigation. Those factors are not rigid, technical requirements." San Juan Cnty., Utah v. United States, 503 F.3d 1163, 1195 (10th Cir. 2007). Thus, "[i]ntervention should be granted of right if the interests favoring intervention outweigh those opposed." Id.

Federal Rule of Civil Procedure 24(b)(1)(B) provides that, on timely motion, the court may permit intervention to anyone who "has a claim or defense that shares with the main action a common question of law or fact." Fed.R.Civ.P. 24(b)(1)(B). The decision whether or not to grant a motion for permissive intervention is within the district court's sound discretion. See, e.g., City of Stilwell v. Ozarks Rural Elec. Co-op. Corp., 79 F.3d 1038, 1043 (10th Cir. 1996). In exercising this discretion, "the court must consider whether the intervention will unduly delay or prejudice adjudication of the original parties' rights." Fed.R.Civ.P. 24(b)(3).

2. Evaluation

The Intervenors argue that they are entitled to intervention as of right and that permissive intervention is appropriate. (Mot. at 6-11.) Plaintiff argues that the Intervenors are not entitled to intervention as of right and their motion for ...


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