United States District Court, M.D. North Carolina
DAVID W. HARRELSON; and SHERI HARRELSON, Plaintiffs,
USAA GENERAL INDEMNITY COMPANY, Defendant.
D. SCHROEDER UNITED STATES DISTRICT JUDGE.
the court is Dawn Byrd's motion to intervene as a
plaintiff in this insurance coverage action. Defendant USAA
General Indemnity Company (“USAA”) opposes the
motion. For the reasons set forth below, the motion will be
August 23, 2018, existing Plaintiffs David and Sheri
Harrelson (“the Harrelsons”) filed this lawsuit
in the General Court of Justice, Superior Court Division, of
Davidson County, North Carolina. (Doc. 3 at 9.) In the
complaint, the Harrelsons allege that Sheri co-owned a 2001
Jeep with her ex-husband, Brent Cranford. (Id. at
3.) Carlton Cranford - Sheri and Brent's son - was
allegedly driving the Jeep on the morning of November 29,
2016, when he was involved in an accident with Byrd.
(Id. at 3- 4.) Byrd brought a personal injury
lawsuit against Carlton and the Harrelsons in state court and
obtained default judgments against the Harrelsons.
(Id. at 75, 91-92.) Both before and after the
default judgments were entered, the Harrelsons demanded
defense and indemnification from USAA, the provider of an
automobile insurance contract with David listing him, Sheri,
and Carlton as drivers. (Id. at 5, 29.) USAA denied
coverage for the claim (Doc. 6 ¶ 31), prompting the
Harrelsons to file this lawsuit against it in state court for
breach of contract and violation of the North Carolina Unfair
and Deceptive Trade Practices Act, N.C. Gen. Stat. §
75-1.1, et seq. USAA removed the case to this court on
October 11, 2018, and answered the complaint a few days
later. (Docs. 1, 6.)
January 7, 2019, Byrd filed the present motion to intervene
as of right under Federal Rule of Civil Procedure 24(a)(2) or
permissively under Rule 24(b)(1)(B). (Doc. 12.) In her
proposed complaint, Byrd seeks a declaratory judgment that
the Harrelsons' USAA insurance policy obligates the
insurer to defend and indemnify the Harrelsons in Byrd's
state court personal injury lawsuit. (Doc. 12-1 at 4.) She
also seeks damages against USAA for allegedly violating N.C.
Gen. Stat. § 58-3-33, which requires insurers to
provide, upon request of a party alleging damages sustained
in an automobile accident, certain information about any
policy provided by the insurer acknowledging coverage.
(Id. at 4-7.)
Intervention as of Right
movant claiming a right to intervene under Rule 24(a)(2) must
meet the following four requirements:
(1) the application to intervene must be timely; (2) the
applicant must have an interest in the subject matter of the
underlying action; (3) the denial of the motion to intervene
would impair or impede the applicant's ability to protect
its interest; and (4) the applicant's interest is not
adequately represented by the existing parties to the
Houston Gen. Ins. Co. v. Moore, 193 F.3d 838, 839
(4th Cir. 1999). Failure to satisfy any of the four
requirements is fatal to the motion. Students for Fair
Admissions Inc. v. Univ. of N.C., 319 F.R.D. 490, 494
(M.D. N.C. 2017) (citing Moore, 193 F.3d at 839).
USAA argues that Byrd has not shown that her interest in the
Harrelsons' suit is not adequately represented by the
Harrelsons. The court agrees. Byrd's interest in the
subject matter of this litigation - to secure a ruling that
USAA's refusal to indemnify the Harrelsons violates the
insurance contract at issue - is precisely the
Harrelsons' interest, and Byrd does not question the
Harrelsons' fervency, litigation strategy, or
counsel.[*] (Doc. 13 at 8); see Nat'l
Union Fire Ins. Co. of Pittsburg v. Reichhold,
Inc., No. 1:06CV939, 2008 WL 90186, at *3 (M.D. N.C.
Jan. 8, 2008) (“When . . . the moving party has the
same ultimate objective as a party to the suit, a presumption
arises that the moving party's interests are adequately
represented.” (citing Virginia v. Westinghouse
Elec. Corp., 542 F.2d 214, 216 (4th Cir. 1976))).
Byrd's primary attempt to skirt an otherwise
cut-and-dried conclusion of adequate representation is to
argue that her claims of USAA's alleged contravention of
N.C. Gen. Stat. § 58-3-33 create an interest not
adequately represented by the Harrelsons. This argument
misunderstands the Moore factors. The “interest”
a movant must show to be inadequately represented under the
fourth factor is the same “interest” the movant
must provide under the second factor: “an interest in
the subject matter of the underlying action.” Moore,
193 F.3d at 839. The fact that Byrd has tacked on additional
claims distinct from the subject matter of the existing
action is not relevant to whether the Harrelsons are
adequately representing Byrd's interest in the existing
action. Because Byrd has offered no reason to believe that
the Harrelsons are not adequately representing her interest
in a ruling that USAA violated the relevant insurance
contract, her motion to intervene as of right will be denied.
court may permit anyone who “has a claim or defense
that shares with the main action a common question of law or
fact” to intervene on timely motion. Fed.R.Civ.P.
24(b)(1)(B). “In exercising its discretion, the court
must consider whether the intervention will unduly delay or
prejudice the adjudication of the original parties'
rights.” Id. at 24(b)(3). “Where a
movant seeks permissive intervention as a plaintiff, the
movant must satisfy four requirements: (1) the motion is
timely; (2) its claim has a question of law or fact in common
with the main action; (3) an independent basis for
subject-matter jurisdiction exists; and (4) intervention will
not result in undue delay or prejudice to the existing
parties.” League of Women Voters of N.C. v.
North Carolina, No. 1:13CV660, 2014 WL
12770081, at *2 (M.D. N.C. Jan. 27, 2014). Rule 24(b) is
construed liberally to allow intervention where appropriate.
Id. (citing Feller v. Brock, 802 F.2d 722,
729 (4th Cir. 1986)). Nevertheless, [w]hether to allow
permissive intervention is within the sound discretion of the
district court.” Students for Fair Admissions, 319
F.R.D. at 494 (citing Smith v. Pennington, 352 F.3d
884, 892 (4th Cir. 2003)).
circumstances of this case, permissive intervention is
unwarranted. Byrd's declaratory judgment claim has the
same objective “[t]he existing [plaintiffs] are
zealously pursuing, ” Stuart v. Huff, No.
1:11-cv-804, 2011 WL 6740400, at *3 (M.D. N.C. Dec. 22,
2011), aff'd, 706 F.3d 345 (4th Cir. 2013), and - as
explained above - Byrd offers no reason to believe that she
will offer a different or improved approach. The lack of
value such an intervention would add to this case renders the
attendant delay and complication under the fourth factor
“undue, ” and Byrd's proposed claims based on
USAA's alleged contravention of N.C. Gen. Stat. §
58-3-33 would “unnecessarily introduce collateral
issues” into the case. Reichhold, 2008 WL 90186, at *4;
see also United States v. North Carolina, No.
1:13CV861, 2014 WL ...