Certain Underwriters at Lloyd's, London Subscribing to Policy Number B1115P190308/0162 v. Wenvi, Inc dba Wendy's

• Court: District Court, Virgin Islands
• Decided: June 10, 2022
• Docket: 1:22-cv-00021
• Status: Unknown

Opinion

DISTRICT COURT OF THE VIRGIN ISLANDS

DIVISION OF ST. CROIX ║ Certain Underwriters at Lloyd's, ║ London Subscribing to Policy Number ║ B1115P190308/0162, ║ ║ Plaintiff, ║ 1:22-cv-00021-WAL-EAH ║ v. ║ ║ WENVI, INC., d/b/a Wendy’s, ║ ║ Defendant. ║ ________________________________________________ ║ TO: Robert J. Kuczynski, Esq. Lee J. Rohn, Esq. ORDER DENYING MOTION TO INTERVENE

THIS MATTER

is before the Court upon Benjamin “Bennie” Martinez and Anna C. 1 Fabio’s (the “Prospective Intervenors”) Renewed Motion to Intervene (Dkt. No. 11). Plaintiff filed a response (Dkt. No. 14) and the Prospective Intervenors did not reply. For the If.o llowiFnAg CreTaUsAonLs A tNheD C PoRuOrtC wEiDllU dReAnyL tBhAe CmKoGtRioOnU toN iDn tervene. The Prospective Intervenors filed an action for damages in the Superior Court of the 2 Virgin Islands against WENVI, Inc. d/b/a Wendy’s (“WENVI”). The Prospective Intervenors alleged in the underlying suit that they were damaged on WENVI’s premises. Thereafter, Plaintiff “filed this action to determine whether it owes a duty to defend and indemnify its 1 See Prospective Intervenors’ Motion to Intervene (Dkt. No. 8), filed April 21, 2022, was denied without prSeejeuBdeicneja fmori nfa Milaurrtei nteoz s aantids fAyn Lao Fcaabl iRou vl.e W oEf NCiVvIi,l IPnrco.cedure 7.1(f). Court’s Order, entered April Certain Underwriters at Lloyds, London v. WENVI Inc. , 1:22-cv-00021-WAL-EAH Order Denying Motion to Intervene Page 2

insurBeedn, jWamEiNnV MI, aIrntcin. edzb aa nWde Annday ’sF, aubniod evr. tWheE NreVlIe, vIannct. insurance policy in the underlying suit , SX-2021-CV-476 (the “underlying suit”), which is currently pending in the Superior Court of the Virgin Islands.” Opp’n at 1. The Prospective Intervenors then moved for intervention as of right herein, pursuant to Fed. R. Civ. P. 24(a) asserting that they are entitled to intervene in the instant matter because they have an interest in a specific fund. Plaintiff argues that the Prospective Intervenors do not have a right to intervene because they do not have a sufficient interest in thIIe. litigaAtiPoPnL. I CABLE LAW The party seeking to intervene under Rule 24(a)(2) of the Federal Rules of Civil Proced ure must establish the following elements: (1) A timely application for leave to intervene; (2) A sufficient interest in the underlying litigation; (3) A threat that the interest will be impaired or affected by the underlying action; and (4)That the existing parties to that action do not adequately represent the prospective Liberty inMteurtvueanl oIrn’ssu irnatnercee stCso. mpany v. Treesdale, Inc. Kleissler v. United States Forest Service , 419 F.3d 216, 220 (3d Cir. 2005) (citing , 157 F.3d 964, 969 (3d CiSre. e1 T1r9e8e)s.d aTloe that end, “[e]ach of thes Me oreuqnutairienm Teonpt Cs omnudsotm bien imumet Atoss ionctieartvioenn ev .a Ds aovfe r iSgthatb.b” ert Master Bui, l4d1er9, F.3d at 220 (citing Certain Underwriters at Lloyds, London v. WENVI Inc. , 1:22-cv-00021-WAL-EAH Order Denying Motion to Intervene Page 3 Inc.

, 72 F.3d 361, 366 (3d Cir. 1995) (citation omitted)). Moreover, the partLyi vsienegkstinong ivn. tBeerrvgeenrtion bears the burden of demonstrating that intervention is appropriate. , 1:19-cv-00012, 2020 U.S. Dist. LEXIS 27198 at *4 (D.V.I. 2020) (internal citations omitted). Further, the court musItd accept as true the non-conclusory allegations made in supIpIoI.r t of Da ImSCoUtiSoSnI tOoN in tervene. . at *5. The Prospective Intervenors bring their motion for intervention as of right, pursuant to Federal Rules of Civil Procedure Rule 24(a). In addition to timeliness the Prospective Intervenors must also establish that (1) “[they] have a sufficient interest in the litigation;” (2) “the interest may be affected or impaired, as a practical matter by the disposition of the actionL;”i vainndg s(t3o)n “the interest is not adequately represented by anG eexni. sStitnagr pInadretym i. nC oth. ev . lVit.iIg. aPtoiortn .A” uth. , 2020 U.S. Dist. LEXIS 27198 at *5-6 (quBortoindgy v. Spang , 224 F.R.D.a 3cc7o2r,d 3 H74ar-7ri5s v(D. P.Ve.rIn. 2sl0ey04) (quoting , 957 F.2d 1108, 1115 (3d Cir. 1992)); , 820 F.2d 592, 596 (3d Cir. 1987) (statAin. gP trhoast peeacchti vfaec Itnort e“rmvuesnto bres ’m Meot ttioo inn tiesr Tviemnee lays of right”).

Plaintiff filed the instant complaint for declaratory judgment on February 15, 2022 (Dkt. No. 1), and the Prospective Intervenors initially filed their Motion to Intervene on April 21, 2022 (Dkt. No. 8). The Court denied without prejudice the Prospective Intervenors’ Motion to Intervene for failure to satisfy LRCi 7.1(f) (Dkt. No. 10). On April 26, Certain Underwriters at Lloyds, London v. WENVI Inc. , 1:22-cv-00021-WAL-EAH Order Denying Motion to Intervene Page 4

2022, the Prospective Intervenors filed the instant renewed Motion to Intervene (Dkt. No. 11). On May 10, 2022, Plaintiff filed its opposition to the renewed motion to intervene (Dkt. No. 14). Plaintiff does not challenge the timeliness of the renewed motion to 3 intervene.B A. cPcorrodsipnegclyt,i vthee I Pnrtoesrpveecntoivres ’I nHtearvvee nNoorts hEasvtaeb slaitsihsfeided a t hSeu tfifmiceielinnte sIsn ftaecrteosrt. in the Instant Litigation The Prospective Intervenors’ main argument is that they have an interSeeste in a specific fund sufficient to entitle them to intervention in a case affecting that fund. Mot. at 2. Plaintiff argues that the Prospective Intervenors “have nothing more than an economic interest in the outcome of this declaratory judgement action, which is insufficient to support the right to intervene.” Opp’n. at 2. Fed. R. Civ. P. 24(a) does not detail what kind of interest a party must have to intervene as a matter of right, but the Supreme CDoounratl dhsaosn hve. lUdn tihteadt “S[twat]ehsat is obviously meant . . . is sae es iagnlsiofi cKalneitslsyl eprr vo.t eUc.Sta. bFloer einstt eSreersvt..” , 400 U.S. 517, 531 (1971); , 157 F.3d 964, 969 (3d Cir. 1998) (noting that no “precise and authoritative definition of the interest that satisfies Rule 24(a)(2)” exists) (internal quotation marks omitted). “Nonetheless, the polestar for evaluating a claim for Kinleteisrsvleerntion is always whether the proposed intervenor’s interest is direct or remote.” , 157 F.3d at 972. Accordingly, to establish a sufficient interest for 3 Certain Underwriters at Lloyds, London v. WENVI Inc. , 1:22-cv-00021-WAL-EAH Order Denying Motion to Intervene Page 5

intervention, “the applicant must demonstrate that Hthaerrries is a tangible threat to a legally cognizable interest to have the right to intervene.” , 820 F.2d at 601. Furthermore, the proposed intervenor should have an interest that “is capable of definKilteiiossnl earnd will be directly affected in a substantially concrete fashion by the relief sought.” , 157 F.3d at 972. Said another way, to establish a sufficient interest for intervention, the Prospective Intervenor must demonstrate that they haveS e“eanM oinuntetraeinst T roeplating to the property or transaction which is the subject of the action.” , 72 F.3d at 366. However, that related interest must be more than a mere related interest because the “mere fact that a lawsuit may impede a third party’s abiliSteye toT rreeecsodvaelre in a separate suit ordinarily does not give the third party a right to intervene.” , 419 F. 3d at 221. The Prospective Intervenors state that they have an interest in the instant matter because there is “an insurance policy applicable to movants pending litigation against the insured [Defendant] WENVI,” and intervention is necessary to ensure that there are funds to pay a potential Sjeuedgment if they are successful in the Superior Court, which is an economic interest. Mot. at 2. Further, that “[w]hile a mere economic interest may be insufficient to support the right to intervene, an intervenor’s interest in a specific fund is sufficient to entitle intervention in a case affecting that fund,” and that they have anM ionutnetraeisnt iTno pa sCpoencidfoic. fAunssd'n—the insurance policy that Plaintiff represents. Mot. at 2 (citing , 72 F.3d at 366 (3d Cir. 1995)). Plaintiff argues that Prospective Intervenors do not have a sufficient interest in this litigation because they have “nothing Certain Underwriters at Lloyds, London v. WENVI Inc. , 1:22-cv-00021-WAL-EAH Order Denying Motion to Intervene Page 6

more than an economic interest in the outcome of this declaratory judgment action, which is insufficient to support the right to intervene.” Opp’n at 2. MoTuhneta Pinr oTsoppective Intervenors cite to the Third Circuit Court of AppeaMls’o udnetcaisinio nT oinp the case as support for their position. However, while the Court found that a proposed intervenor’s interest in a specific fund can be sufficient to allow intervention as of right, it nevertheless recognized that the specific fund in qualersetaiodny “concerned the disbursement of insurance proceeds that the insurance carrier had See Tpareide stdoa ltehe condominium association to compensate for a loss caused by a hurricane.” , 419 F. 3d at 221 (emphasis added). Therefore, because the specific fund had aMlroeuandtya inb eTeonp paid out to the condominium association, the proposed intervenors in were members of the apartment owners who were intended third party beneficiaries. Consequently, the Thirrde sCircuit determined that the proposed intervenors had “a property interest in the trust that was enforceable in law or in equity” and had “an interest in seeing that the assets of thSee etrMuostu n[wtaeinre T] onpot diverted in a manner that [would] defeat the purpose of the trust.” , 72 F. 3d at 367. The Third Circuit further concluded that the proposed intervenors had “an interest in being heard with respect to the disposition of that fund . . . S[eaendM]o suunctha inan T ionpterest [was] sufficient to support an applicant’s intervention as of right.” , 72 F. 3d at 368. That is not the case herein, and tMwoou nottahienr TTohpirdSe CeirLcibueitr tcya sMeus tduiaslt iInngsuurisahn cteh eC ocmaspea anty b va. rT frreoemsd athlee, reasoning and rulings in . Certain Underwriters at Lloyds, London v. WENVI Inc. , 1:22-cv-00021-WAL-EAH Order Denying Motion to Intervene Page 7 Inc. Liberty Mutual Ins. Co. v. Pacific Indemnity Co.,

, 419 F.3d 216, 220 (3d Cir. 2005) and 76 F.R.D. 656L, 6ib5e8r t(yW M.Du.t Puaa.l 1In9s7u7r)a. nce Company v. Treesdale, Inc. In , 419 F.3d 216, 220 (3d Cir. 2005), the prospective intervenors sought to intervene asserting that Liberty Mutual had an obligation under the insurance policies and that their right to recover could Sbeee eTlriemeisndaatleed in the declaratory judgment that Liberty Mutual filed against their insured. , 419 F.3d at 219. Liberty Mutual sought declaratSoerey idju.dgment declaring that it had no furTtrheeers ddaultey to defend or indemnify its insured. Like the instant matter herein, in there was a pending underlying claim, which had not been resolved. WMoituhn ttahiens Te ofpa cts, the Third Circuit concluded that “the nature of the fund atM iossuuneta iinn Top differed radically from the ‘fund’ here. The insurance proceedSse ien Treesdale were required to be held in trust for the benefit of all condo owners.” , 419 F.3d at 222. The Third Circuit further concluded that consequently the proposed intervenors “have no property interest in the Liberty Mutual [] policies nor do they have any legally protectable interest in the policies. Rather they have the kind of economic interest in the inSseueriadnce proceeds that we have held does not support intervention as a matter of right.” . The kind of interest the Third Circuit was referSreinegT troe eiss dtahlee kind of “interest conting eLnibt eurptyo nM au tfuaavlo Irnasb. lCeo r.e vs. uPlat cinif iac nIn adsesmocniiattye dCo l.a,wsuit.” , 419 F. 3d at 223 (citing 76 F.R.D. 656, 658 (W.D. Pa. Certain Underwriters at Lloyds, London v. WENVI Inc. , 1:22-cv-00021-WAL-EAH Order Denying Motion to Intervene Page 8

1977) (“[A]n interest contingent upon a favorable result in an associated lawsuit is not an interest suLffibiceiretnyt tMou rteuqaul irIen sin. tCeor.v evn. tPioanci ufinc dIenrd Remulnei 2ty4 (Cao).”,). In 76 F.R.D. 656, 658 (W.D. Pa. 1977)—a case where the facts are directly analogous to the facts at bPaar—cifiitcs Irnedaesmonniintyg and ruling further supports denial of the right to intervene herein. In , the Plaintiff in an underlying personal injury action sought to intervene in an insurance declaratory judgment action. In rejecting the proposed intervenor’s arguments for intervention as of right, the District Court concluded that “since the contested issues of fact had to be resolved before [the Plaintiff in the underlying personal injury action] could recover a judgment, [the] interest in intervention is contingent and not direct and consequSeenetPlya,c infioct Inthdee mkinnitdy of interest courts have required for intervention under Rule 24(a).” , 76 F.R.D. at 660. Mountain Top TreesdaCloensiderPiancgi fitch Ien dreemasnointying and rulings of the Third Circuit in , , and , the ProspectTirveee sIndtaelervenorPs’a icniftiecr eInsdt ehmerneitiny is more like the interest of the proposed intervenors in and —contingent upon a favorable result in an underlying suit. Such an interest is not sufficient to require intervention under Rule 24(a). Moreover, as stated previously, the Third Circuit has noted: In general, a mere economic interest in the outcome of the litigation is insufficient to support a motion to intervene. Thus, the mere fact that a lawsuit may impede a third party’s ability to recover in a separate suit Mountaoinrd Tinoapr Ciloyn ddooe. sA snso'nt give the third party a right to intervene. Certain Underwriters at Lloyds, London v. WENVI Inc. , 1:22-cv-00021-WAL-EAH Order Denying Motion to Intervene Page 9

Accordingly, the Court sees no basis to depart from well-established reasoning and rulings regarding intervention as of right where the prospective intervenor claims a mere economic interest that is contingent on a favorable result in an underlying action, and therefore, the Court finds that the Prospective Intervenors herein have not established a sufficient interest necessary to intervene as of right, pursuant to Rule 24(a). Having determined that the Prospective Intervenors have failed to satisfy the second factor for inteIrVv.e ntioCnO aNsC oLf UriSgIhOtN, t he Court need not address the remaining factors. For the reasons stated above, the Prospective Intervenors have failed to establish that they have a sufficient interest in the litigation; therefore, they have no right to intervention and their motion to intervene must be denied. AccordingOlyR, DthEeR pErDemises considered, and the Court otherwise being duly advised, it is now hereby DE NthIEaDt B. enjamin “Bennie” Martinez and Anna C. Fabio’s Motion to Intervene (Dkt. No. 8) is

ENTER:

Dated: June 10, 2022 /s/ Emile A. Henderson III EMILE A. HENDERSON III U.S. MAGISTRATE JUDGE