American Home Assurance Co. v. Dist. Ct.
| Decision Date | 21 December 2006 |
| Docket Number | No. 47381.,47381. |
| Parties | AMERICAN HOME ASSURANCE COMPANY, Petitioner, v. The EIGHTH JUDICIAL DISTRICT COURT of The State of Nevada, in and for the COUNTY OF CLARK, and the Honorable Michelle Leavitt, District Judge, Respondents, and David Carlton Madison, Jr.; Titanium Metals Corporation; and Guardsmark, Inc., Real Parties in Interest. |
| Court | Nevada Supreme Court |
Gray & Prouty and Jill M. Klein, Las Vegas and San Diego, California, for Petitioner.
Beckley Singleton, Chtd., and Daniel F. Polsenberg, Las Vegas; Rawlings Olson Cannon Gormley & Desruisseaux and John E. Gormley, Las Vegas; Thorndal Armstrong Delk Balkenbush & Eisinger and Brian K. Terry, Las Vegas, for Real Party in Interest Titanium Metals Corporation.
Cobeaga Law Firm and J. Mitchell Cobeaga, Las Vegas; Eckley M. Keach, Esq., Las Vegas; Murdock & Associates, Chtd., and Robert E. Murdock, Las Vegas, for Real Party in Interest David Carlton Madison, Jr.
Georgeson Angaran, Chtd., and Jack G. Angaran, Reno; Low Ball & Lynch and Dean M. Robinson, San Francisco, California, for Real Party in Interest Guardsmark.
Before the Court En Banc.1
In Nevada, when a third party is at fault for an industrial accident, the workers' compensation insurer that paid benefits to the injured worker has a lien upon any proceeds that the worker recovers from the tortfeasor, so that the insurer's payments are reimbursed, ultimately, by the tortfeasor. During the proceedings underlying this writ petition, to protect its lien on any proceeds recovered by the injured worker to whom it provided benefits, a workers' compensation insurer asked the district court to allow it to intervene in the injured worker's tort litigation. Although the insurer contended that it had an absolute right to intervene in the litigation under our 1995 decision in State Industrial Insurance System v. District Court,2 the district court denied the insurer's application. Accordingly, the insurer has brought this original petition for a writ of mandamus, requesting us to direct the district court to allow it to intervene in the injured worker's case.
Because our 1995 decision is unsupportable under the law, however, we overrule it. We conclude that a workers' compensation insurer may intervene in an injured worker's litigation to protect its right to reimbursement only if it meets certain requirements, which include showing that the injured worker cannot adequately represent the insurer's interest in the subject matter of the litigation. Because the insurer here failed to show that its interest was inadequately represented by the injured worker, we deny the insurer's request for extraordinary relief.
Real party in interest Titanium Metal Corporation (Timet) hired real party in interest Guardsmark, Inc., to provide onsite security services. Guardsmark employed real party in interest David Carlton Madison, Jr., as a security guard. While on duty, Madison fell into an abandoned furnace pit on Timet's property. As a result of the fall, Madison suffered severe, debilitating injuries, for which he received workers' compensation benefits from Guardsmark's insurer.
Madison then filed a personal injury action against Timet in December 2003, alleging several negligence theories as bases to recover damages. Timet filed a third-party complaint against Guardsmark for express and implied indemnity, and contribution.
In April 2006, over three years after the accident and approximately two-and-one-half years after Madison filed suit, Guardsmark's workers' compensation insurer, petitioner American Home Assurance Company (AHAC), moved to intervene in Madison's personal injury action for purposes of recovering the workers' compensation benefits that it had paid (and will pay) to Madison. Attached to its motion was a "complaint-in-intervention for reimbursement of workers' compensation benefits," alleging the same negligence claims against Timet as were alleged in Madison's complaint and requesting both damages and a lien against any judgment in favor of Madison, in the amount of the benefits that it paid to Madison. At the time AHAC sought to intervene, a June 2, 2006 discovery cut-off date was in place, and trial was scheduled to begin on September 5, 2006.
Both Madison and Timet opposed the motion to intervene, arguing that AHAC's complaint in intervention constituted an attempt to assert an independent cause of action against Timet and was thus subject to dismissal under the statute of limitations.3 Further, they argued, given that the intervention complaint did not even contain the word "subrogation," it could not be construed as an effort to enforce a subrogation lien. All parties acknowledged that AHAC retained subrogation lien rights over any recovery Madison obtained and that AHAC could enforce those rights after any settlement was reached or any judgment was entered. Madison pointed out, however, that if AHAC did not intervene in the action, it would be responsible for contributing its share of the litigation expenses when collecting on its lien, as set forth in Breen v. Caesars Palace.4 Madison asserted that AHAC should not be permitted to intervene at such a late date, as it attempted to do so merely to avoid paying its proportionate share of the litigation costs.
The district court denied AHAC's motion to intervene, determining that AHAC was attempting to assert an independent cause of action against Timet, which was time-barred. The court further found that AHAC's lien rights were adequately protected, as the parties were on notice that the lien would apply, subject to an offset for AHAC's portion of the litigation expenses, as required under Breen.
AHAC consequently filed the instant writ petition, challenging the district court's order denying it leave to intervene. As directed, Madison timely filed an answer, arguing that AHAC's intervention was not appropriate under these circumstances and, therefore, writ relief was not warranted. We stayed the underlying action pending our resolution of AHAC's petition for extraordinary writ relief.
A writ of mandamus is available to compel the performance of an act that the law requires as a duty resulting from an office, trust or station,5 or to remedy a manifest abuse of discretion.6 Mandamus is available only when petitioner has no plain, speedy, and adequate legal remedy,7 and whether we will consider a petition for the extraordinary remedy of mandamus is entirely within our discretion.8 The petitioner bears the burden of demonstrating that mandamus relief is warranted.9
We have determined that our discretionary consideration of this petition is appropriate because AHAC has no other adequate means by which to challenge the district court's refusal to allow it to intervene in the underlying suit.10 After considering the petition and answer thereto, however, we conclude that extraordinary writ relief is not warranted. Specifically, even though AHAC has an interest in Madison's litigation of his personal injury claims, the district court has discretion in deciding whether AHAC has shown that intervention is appropriate so that it may promote or protect that interest. We conclude that the district court did not manifestly abuse its discretion when it denied AHAC leave to intervene, given Madison's ability to adequately represent AHAC's interest.
Intervention is within the district court's discretion
AHAC argues that, in accordance with this court's decision in State Industrial Insurance System v. District Court (SIIS),11 it may automatically intervene in Madison's suit against Timet as a matter of right. Accordingly, AHAC argues, the district court was obligated to allow it to intervene. Because we determine that our conclusion in SIIS, that an insurer has an absolute right to intervene in an injured worker's lawsuit, is not supportable under Nevada law, and because the district court did not abuse its discretion in disallowing AHAC's intervention, we disagree.
Nevada law
NRS 12.130 allows, before the trial commences, "any person . . . who has an interest in the matter in litigation, in the success of either of the parties, or an interest against both" to intervene in an action under the Nevada Rules of Civil Procedure (NRCP).12 NRCP 24 governs intervention, providing for both intervention of right and permissive intervention. At issue here, NRCP 24(a) directs the district court to approve a timely application to intervene of right when either (1) a statute grants an unconditional right to intervene, or (2) "the applicant claims an interest relating to the [subject] property . . . 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 protected by existing parties."13 An application to intervene must be "accompanied by a pleading setting forth the claim . . . for which intervention is sought."14
In SIIS, we ultimately concluded that the industrial insurer had a right to intervene under both subsections (1) and (2) of NRCP 24(a).15 First, a majority of the SIIS court concluded that, under NRAP 24(a)(1), statutory intervention rights existed. The majority noted that NRS 616C.215 (formerly NRS 616.560) provides that when a workers' compensation insurer pays benefits to an injured worker, it becomes subrogated to the injured workers' right to recover damages from a third-party tortfeasor. Then the majority pointed out that, by asserting its subrogation rights, an insurer could obtain reimbursement in one of two different ways: the insurer could either enforce a lien statutorily imposed on any proceeds recovered by the injured worker or assert an independent action against the negligent third party.16 The majority determined that that "this latter form of reimbursement, when literally applied, is a...
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