Thursday, February 09, 2006

Court adopts federal view of Civ Pro rule 24(a) (Intervention)

Beacham v. Fritzi Realty Corp., 2006 UT App 35

Liberty Mutual, as insurer of Beacham’s employer, sought to intervene in a lawsuit between Beacham and Fritzi regarding injuries Beacham received while delivering a safe to Fritizi’s warehouse. Liberty claimed it had an interest in the lawsuit that could not be adequately protected without intervening. The trial court denied Liberty’s motion to intervene, and Liberty appealed. During the appeal, Beacham and Fritzi settled. The settlement included an amount set aside for Liberty that was equal to its payments to Beacham.

In the court of appeals, the parties’ arguments centered on whether Liberty’s interests were adequately represented by the existing parties. The court of appeals first noted that the question of which party bears the burden of proving inadequate representation had not yet been addressed by Utah courts. It then adopted the federal view of rule 24(a), under which the burden of proof is on the applicant. The burden is minimal, however, and the applicant need only present some evidence that the existing parties may not adequately represent its interests. The court also explained that when the interest of one party and the interest of the applicant are identical, there is a presumption of adequacy. But the presumption may be rebutted upon “a concrete showing of circumstances that make the existing parties representation inadequate.”

The court determined that Liberty’s interest and Beacham’s interest were “generally aligned.” Liberty thus had to provide some evidence why Beacham’s representation was inadequate in light of the settlement that already accounted for Liberty’s interest. Liberty had not provided any evidence of a divergence of interests, so the court of appeals affirmed the trial court.


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