Rideout v. Jackrabbit, LLC

• Court: Superior Court of Maine
• Decided: February 12, 2015
• Docket: CUMcv-12-481
• Status: Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT CUMBERLAND, ss CIVIL ACTION Docket No. CV-12-481

RONALD RIDEOUT,

Plaintiff,

v. ORDER ON CNA/SMRT, INC.'S MOTION TO INTERVENE JACKRABBIT LIMITED LIABILITY COMPANY,

Defendant, STATE OF MAlNE Cl!llmtsfti~nd, $S, Clerlt's Ob CNA/SMRT, INC., fEB 12 2015 Applicant for Intervention !RECEiVED

Before the court is CNA/SMRT, Inc.l ("SMRT")'s motion to intervene.

SMRT contends that the parties in this case reached a binding settlement

agreement and seeks to intervene to enforce that agreement. For the

following reasons, SMRT's motion to intervene is granted and a hearing shall

be scheduled to determine whether the parties reached a binding settlement

agreement.

BACKGROUND

Plaintiff Ronald Rideout was injured after he fell in the parking lot at

SMRT, Inc. Mter the fall, Rideout began receiving workers' compensation

benefits from SMRT. In November 2012, Rideout filed this suit against

1 CNA is SMRT, Inc.'s insurance carrier. The two entities are collectively referred to in this order as "SMRT" for convenience. defendant Jackrabbit, the company responsible for maintaining the parking

lot.

Attorney Peter Clifford represented Rideout in the case until his

motion to withdraw was granted on October 11, 2013. Despite being granted

leave to withdraw, Attorney Clifford continued to represent Rideout in

settlement negotiations, and he continued to file motions on Rideout's behalf

to extend filing deadlines. According to Attorney Clifford's motions filed with

the court, the parties believed the case would settle.

Before the agreement was reduced to writing and signed, however,

Rideout apparently decided he did not want to settle. In November, Rideout

notified the court that he is representing himself. He opposes the motion and

argues that Attorney Clifford did not have authority to settle.

Workers' Compensation Law

Under 39-A M.R.S. § 107, an employee claiming benefits under the

Workers' Compensation Act may elect to pursue a claim against a third party

for damages resulting from the injury. The employer then "has a lien for the

value of compensation paid on any damages subsequently recovered against

the 3rd person liable for the injury." 39-A M.R.S. § 107 (2014). In this case,

Rideout asserts a claim against Jackrabbit, and SMRT will have a lien on the

amount he recovers up to the value of its Workers' Compensation payments.

2 DISCUSSION

Intervention as of Right

An applicant may intervene as of right:

(1) when a statute confers an unconditional right to intervene; or (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.

M.R. Civ. P. 24(a). In some states, an employer has a statutory right to

intervene in an action by an employee against a third-party where the

employer has paid benefits to the employee. See, e.g., Nucor Corp. v. Kilman,

186 S.W.3d 720, 734 (Ark. 2004). Maine's statute does not give the employer

a statutory right to intervene. The court must therefore determine whether

SMRT satisfies the three criteria in M.R. Civ. P. 24(a)(2) to intervene as of

right: "(1) [the applicant] must claim an interest in the property or

transaction that is the subject of the action; (2) it must be so situated that the

disposition of the action may impair or impede its ability to protect its

interests; and (3) its interest must not be adequately represented by the

existing parties to the action." Bangor Pub. Co. v. Town of Bucksport, 682

A.2d 227, 231 (Me. 1996).

On the first element, SMRT argues that it has an interest in the

outcome of the action because it will acquire a lien for the value of

compensation it paid under Rideout's workers' compensation claim. SMRT

3 relies on McKeeman v. Cianbro Corp. in which the employer intervened in an

action to enforce its lien. 2002 ME 144, ~ 4, 804 A.2d 406. In that case,

plaintiff received workers' compensation death benefits from the deceased's

employer and subsequently filed an action against a third party. Id. ~ 2.

Plaintiff reached a settlement with the third party and the only issue was

determining the employer's proportional responsibility for the costs of

settlement. I d. ~ 3, 7.

Jackrabbit argues that SMRT's interest is inchoate and does not attach

until the employee actually receives payment. Jackrabbit's argument flows

from the plain language of 39-A M.R.S. § 107, which provides: "any employer

having paid the compensation or benefits or having become liable for

compensation or benefits under any compensation payment scheme has a lien

for the value of compensation paid on any damages subsequently recovered

against the 3rd person liable for the injury." 39-A M.R.S. § 107 (emphasis

added). Jackrabbit argues that, because Rideout has not recovered anything,

SMRT does not yet have a lien under 39-A M.R.S. § 107.

If in fact Rideout and Jackrabbit reached a binding settlement

agreement, then SMRT's interest is not inchoate and it may enforce its lien in

this case. See McKeeman v. Cianbro Corp., 2002 ME 144, ~ 4, 804 A.2d 406

("S.D. Warren intervened in Sharon's action against Cianbro, and moved to

enforce a workers' compensation lien . . . . "). Federal cases confirm that a

third party that claims a lien on settlement proceeds has a sufficient interest

4 in the case to intervene as of right. See Curtis v. Sears, Roebuck & Co., 754

F.2d 781, 783 (8th Cir. 1985) (holding that insurance carrier with statutory

lien on settlement proceeds was entitled to intervene as of right); see also

Meredith v. Schreiner Transport, Inc., 814 F. Supp. 1001, 1003 (D. Kan. 1993)

("Intervention by a party, whose only interest in the litigation is a lien on the

proceeds, is proper at any time before final judgment.").

The next element for the court to consider is whether the disposition of

this case will impede SMRT's ability to protect its interest. In State v.

Mainehealth, the court considered whether a party could intervene in an

action that, by statute, only the Attorney General could bring. 2011 ME 115,

~ 11, 31 A.3d 911. The court reasoned that because the applicant for

intervention could bring its own private civil action, the case would not

impede its ability to protect that interest. Id. In this case, however, SMRT's

rights are derivative of the employee's rights. It will not be able to bring a

subsequent suit after this case is resolved. SMRT therefore satisfies the

second element.

The final element is whether SMRT's interest is adequately

represented by existing parties. At a superficial level, both SMRT and

Rideout are interested in recovering against Jackrabbit. On closer

examination, however, the interests diverge. SMRT is only interested in

recovering up to its workers' compensation liability, a sum that is likely

substantially lower than what Rideout seeks to recover. Further, Rideout

5 has shown that he is no longer interested in settlement but wants to pursue

his case to trial.

SMRT has met all of the elements to intervene as of right under M.R.

Civ. P. 24(a)(2).

Motion to Enforce Settlement

Although SMRT is entitled to intervene, it has not yet established that

the parties reached a binding settlement agreement. The court will schedule

a testimonial hearing to determine whether the parties reached an

enforceable agreement.

The entry is:

CNA/SMRT Inc.,'s motion to intervene is GRANTED.

This case shall be set for an evidentiary hearing on CNA/SMRT, Inc.'s motion to enforce .

Date: February 12, 2015 . . . Wheeler Justice, Superior Court

Plaintiff-Pro Se Plaintiff Defendant-Peter Del Bianco Esq Intervenor-Humphrey Johnson Esq