Furia v. Hirsch

• Court: District Court, E.D. California
• Decided: November 26, 2019
• Docket: 2:19-cv-00942
• Status: Unknown

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 EASTERN DISTRICT OF CALIFORNIA 9 10 ADREW FURIA, an individual, No. 2:19-cv-00942-JAM-KJN 11 Plaintiff, 12 v. ORDER GRANTING WELLS FARGO BANK AND BANK OF AMERICA’S MOTION TO 13 SUSAN MARIE MCGREW, an INTERVENE individual; LAURIE HIRSCH, an 14 individual; PHYRHYDRO, LLC, a Nevada corporation; WELLS 15 FARGO BANK, NATIONAL ASSOCIATION; BANK OF AMERICA, 16 NATIONAL ASSOCIATION and DOES 1 through 50, inclusive, 17 Defendants. 18 19 Proposed intervenors, Bank of America, N.A. (“BofA”) and 20 Wells Fargo Bank, N.A. (“Wells Fargo”) (collectively, “the 21 Banks”), possess disputed funds at the heart of this litigation. 22 Accordingly, the Banks seek to jointly intervene to file 23 counterclaims and crossclaims in interpleader for the purpose of 24 determining the rightful ownership of the disputed funds. Motion 25 to Intervene (“Mot.”), ECF. No. 20. Defendant Laurie Hirsch 26 (“Hirsch”), sister of Susan Marie McGrew (the party accused by 27 Plaintiff of originally misappropriating the funds), opposes this 28 Motion. Opp’n, ECF No. 24. For the reasons discussed below, the 1 Court GRANTS the Banks’ motion to intervene.1 2 3 I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND 4 On April 10, 2019, Plaintiff Andrew Furia (“Plaintiff”) 5 filed a complaint in the Superior Court of California, County of 6 El Dorado, against his ex-girlfriend, Susan Marie McGrew 7 (“McGrew”), for allegedly withdrawing the entire balance from 8 their Wells Fargo bank account ($324,918.27) without his consent. 9 Notice of Removal, Ex. A, ECF No. 1. Plaintiff thereafter 10 amended his complaint to join Hirsch (McGrew’s sister) and the 11 Banks as Defendants. Notice of Removal, Ex. B, First Amended 12 Verified Complaint (“FAC”), ECF No. 1. Plaintiff alleged McGrew 13 and Hirsh violated the Racketeer Influenced and Corrupt 14 Organizations Act (“RICO”) by conspiring to deposit part of the 15 disputed funds into accounts with the Banks. FAC ¶¶ 46-49, 52- 16 56. McGrew removed the case to Federal Court. Notice of Removal 17 ¶ 6. Soon after, Plaintiff dismissed the Banks as defendants. 18 Amended Notice of Voluntary Dismissal, ECF No. 8. 19 The Banks now seek to re-enter the case so they can 20 interplead the disputed funds with the Court. Mot. at 1. Each 21 bank possesses a significant portion of the contested funds and 22 wants to determine who owns the funds. Mot. at 1-2. Hirsh 23 opposes this motion, primarily because she has a pending motion 24 with the Court to interplead the disputed funds herself. Opp’n 25 at 1; Motion of Defendant Hirsch For Leave to Amend Answer, 26

27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was 28 scheduled for November 5, 2019. 1 (“Def.’s Mot. to Amend”) ECF No. 23. 2 3 II. OPINION 4 A. Permissive Intervention 5 1. Legal Standard 6 Even if a proposed intervenor is not entitled to intervene 7 as of right, the court may permit an applicant to intervene if 8 they show: (1) independent grounds for jurisdiction; (2) the 9 motion is timely; and (3) a common question of law or fact 10 exists. Perry v. Prop. 8 Official Proponents, 587 F.3d 947, 955 11 (9th Cir. 2009). The Court must also consider whether the 12 intervention will cause unduly delay or prejudice. Fed. R. Civ. 13 P. 24(b)(3). In exercising its discretion to deny permissive 14 intervention, the Court may again consider “whether the movant’s 15 interests are adequately represented by the existing parties.” 16 Venegas v. Skaggs, 867 F.2d 527, 530 (9th Cir. 1989) (aff’d sub 17 nom. Venegas v. Mitchell, 495 U.S. 82 (1990)). 18 2. Analysis 19 a. Independent Grounds for Jurisdiction 20 Neither the Bank nor Hirsch address this element of 21 permissive intervention. The jurisdictional requirement is 22 mostly concerned with “diversity cases in which proposed 23 intervenors seek to use permissive intervention to gain a 24 federal forum for state-law claims over which the district court 25 would not, otherwise, have jurisdiction.” Freedom from Religion 26 Foundation, Inc. v. Geithner, 644 F.3d 836, 844 (9th Cir. 2011). 27 But “[I]n a federal-question case [where the proposed 28 intervenor] brings no new claims, the jurisdictional concern 1 drops away.” Id. 2 The Court has federal-question jurisdiction over this case 3 under 18 U.S.C. § 1962(c). Notice of Removal at 2-3. The Banks 4 are not bringing any new claims; rather, they are seeking to 5 intervene for the purpose of interpleading the disputed funds. 6 Mot. at 1. Accordingly, the Court finds the jurisdictional 7 concern “drops away.” Geithner, 644 F.3d at 844. 8 b. Timeliness 9 The Court has discretion when determining whether a motion 10 to intervene is timely. U.S. v. Alisal Water Corp, 370 F.3d 915 11 (9th Cir. 2004). The Court weigh’s three factors in making this 12 determination: (1) the stage of the proceeding at which an 13 applicant seeks to intervene; (2) the prejudice to other 14 parties; and (3) the reason for and length of delay. Id. The 15 Banks contend their motion was timely because: (1) the case has 16 not progressed past the pleading stage, (2) they have a valid 17 reason for delay because they had attempted to first facilitate 18 an agreement between the parties and they were then unilaterally 19 dismissed from the case by Plaintiff, and (3) no party would be 20 prejudiced because their intervention would expedite matters. 21 Mot. at 4. Plaintiff does not dispute this. Accordingly, the 22 Court agrees that the Banks’ motion was timely. 23 c. Common Question of Law or Fact 24 The Banks argue their interpleader actions arise from the 25 “exact same occurrences” that are at issue in this case. Mot. 26 at 6. Hirsch, on the other hand, argues that the Banks “cannot 27 proffer any claim that shares a common question of law” because 28 their interpleader action is for the sole purpose of efficiency. 1 Reply at 9. But an interest in efficiency and a common question 2 of law or fact are not mutually exclusive. In fact, the Banks 3 were originally named as Defendants in this suit. See FAC. 4 Thus, there is necessarily a common question of law or fact 5 between the Banks’ proposed interpleader and the main action— 6 otherwise, they would not have been initially joined as 7 defendants. For this reason, the Court finds the Banks’ action 8 indeed arises from the same common question of law or fact since 9 their action concerns the disputed funds at the heart of this 10 lawsuit. Mot. at 4. 11 d. Unduly Delay or Prejudice 12 Intervention will unduly delay the main action when it 13 “only serv[es] to undermine the efficiency of the litigation 14 process.” Donnelly v. Glickman, 159 F.3d 405,412 (9th Cir. 15 1998). Hirsch argues granting intervention will “only 16 unnecessarily increase the cost of litigation, all to the 17 existing parties’ detriment....” Opp’n at 10. The Banks, 18 however, respond that “Hirsch herself is driving up fees by 19 attempting to file an interpleader action while this motion is 20 pending.” Reply at 5. Moreover, they contend denying their 21 motion would actually increase fees, since they would then “be 22 required to interplead the funds via two separate actions.” Id. 23 The Court agrees. 24 As the Banks state, denying this Motion would result in two 25 separate interpleader actions. Wells Fargo cannot avail itself 26 of Rule 22 under diversity jurisdiction, so it would have to 27 bring its action in superior court. Mot. at 7. Requiring the 28 parties to adjudicate this issue in parallel proceedings in two 1 different forums would undoubtedly “undermine the efficiency of 2 the litigation process.” Donnelly, 159 F.3d at 412. 3 Accordingly, the Court finds intervention would not unduly delay 4 or prejudice this case. 5 e. Interests Adequately Represented by Existing 6 Parties 7 The existence of a common question of law or fact, however, 8 does not automatically entitle an applicant to intervene. 9 Venegas, 867 F.2d at 530. In deciding whether to permit 10 intervention, a court should also evaluate whether a movant’s 11 interests are adequately represented by existing parties. Id. 12 Court’s consider three factors in determining the adequacy of 13 representation: “(1) whether the interest of a present party is 14 such that it will undoubtedly make all of a proposed intervenor’s 15 arguments; (2) whether the present party is capable and willing 16 to make such arguments; and (3) whether a proposed intervenor 17 would offer any necessary elements to the proceeding that other 18 parties would neglect.” Arakaki v. Cayetano, 324 F.3d 1078, 1086 19 (9th Cir. 2003). Most importantly, the court considers how the 20 interest compares with the interest of existing parties. Id. If 21 the applicant’s interest is identical to that of the existing 22 parties, a compelling showing should be required to demonstrate 23 inadequate representation. Id. 24 The Banks do not set forth in their request for permissive 25 intervention, that their interests are not adequately represented 26 by the existing parties. They do, however, make this argument in 27 their request for intervention as of right. Mot. at 3-4. There, 28 the Banks argue none of the claimants can adequately represent 1 their interest, because they are the only entity without a claim 2 to the contested funds. Mot. at 6. Hirsch argues the Banks’ 3 interests would be adequately represented by her pending 4 interpleader motion. Opp’n at 8. To the contrary, the Banks 5 argue Hirsch has “fundamentally different motivations” because 6 she is “downplay[ing] her asserted interest in the Contested 7 Funds.” Reply at 4. 8 Hirsch suggests that her stake in the claim does not 9 interfere with or undermine her intention to interplead the very 10 funds the Banks want interpleaded. Opp’n at 9. While true, the 11 Banks’ interest does not lie solely in interpleading the disputed 12 funds with the Court. Rather, the Banks have an interest in 13 interpleading the funds in a way that deposits those funds with 14 the Court. Mot. 7-8. As Hirsch, herself, acknowledges, the 15 disputed funds are frozen in her account. Opp’n at 3. 16 Accordingly, she lacks the ability to deposit those funds with 17 the Court in the same way the Banks could if the Court allowed 18 them to intervene. Hirsch argues the funds need not be deposited 19 with the court. Opp’n at 9. This is true. See Gelfren v. 20 Republic Nat. Life Ins. Co., 680 F.2d 79, 82 (9th Cir. 21 1982)(Stating “a [court] deposit is not a jurisdictional 22 requirement to rule 22(1) interpleader....”). But the fact that 23 Hirsch could interplead the disputed funds this way does not mean 24 this type of interpleader would adequately protect the Banks’ 25 interest. Indeed, the Court finds that it would not. 26 The Banks further argue that even if Hirsch did adequately 27 represent their interest, her proposed interpleader would fail 28 since she does not satisfy diversity jurisdiction. Reply 3-4. 1 Because the Court finds that Hirsch could not adequately 2 represent the Banks’ interests for other reasons, the Court need 3 not delve into a discussion of Hirsch’s proposed interpleader 4 |} motion. 5 f. Conclusion 6 The Banks satisfy each of the factors in the permissive 7 intervention analysis. For that reason, and in the interest of 8 promoting judicial efficiency, the Court grants the Banks’ motion 9 | to intervene. 10 11 IIl. ORDER 12 For the reasons set forth above, the Court GRANTS the Banks’ 13 Motion to Intervene. The Banks’ shall file their Crossclaim and 14 Counterclaim for Interpleader within 10 days of the date of this 15 Order. Responsive pleadings shall be filed within twenty days 16 thereafter. 17 IT IS SO ORDERED. 18 Dated: November 25, 2019 19 ke Me 20 teiren staves odermacr 7008 21 22 23 24 25 26 27 28