Candelario-Del-Moral v. Ubs Fin. Servs. Inc. of Puerto Rico (In re Efron)

• Decision Date: 21 March 2014
• Docket Number: No. 13–1765.,13–1765.
• Citation: 746 F.3d 30
• Parties: In re David EFRON, Movant, Appellant. Madeleine Candelario–Del–Moral, Plaintiff, Appellee, v. UBS Financial Services Incorporated of Puerto Rico, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

746 F.3d 30

In re David EFRON, Movant, Appellant.

Madeleine Candelario–Del–Moral, Plaintiff, Appellee,

v.UBS Financial Services Incorporated of Puerto Rico, Defendant, Appellee.

No. 13–1765.

United States Court of Appeals,First Circuit.

March 21, 2014.

David Efron, pro se.

Judith Berkan, with whom Mary Jo Méndez and Berkan/Méndez were on brief, for plaintiff-appellee.

Enrique G. Figueroa–Llinás, with whom Christopher N. Manning, Ashley W. Hardin, and Williams and Connolly LLP were on brief, for defendant-appellee.

Before HOWARD, SELYA and LIPEZ, Circuit Judges.

SELYA, Circuit Judge.

For over four centuries, persons learned in the law have known that, when litigation is in prospect, vigilance is good and somnolence is bad. Commentators and courts have phrased this sentiment in different ways. See, e.g., In re Wood, [1883] 23 Ch.D. 644 at 653 (Eng.) (“It is a reasonable presumption that a man who sleeps upon his rights has not got much right.”); Edmund Wingate, Maxims of Reason (1658) (“Laws come to the assistance of the vigilant, not of the sleepy.”). The lesson to be derived is that “[t]he law ministers to the vigilant not to those who sleep upon perceptible rights.” Puleio v. Vose, 830 F.2d 1197, 1203 (1st Cir.1987). This appeal illustrates the wisdom of that statement.

I. BACKGROUND

This appeal has its genesis in the district court's denial of a motion to intervene. We touch upon the rudiments of the underlying dispute only so far as necessary to put the appeal into a workable perspective. Where, as here, a putative intervenor neglects to submit a proposed pleading with his motion to intervene, seeFed.R.Civ.P. 24(c), we rely on facts made manifest in the record as a whole, see B. Fernández & Hnos., Inc. v. Kellogg USA, Inc., 440 F.3d 541, 543 (1st Cir.2006). The reader who thirsts for more exegetic detail may consult the litany of prior opinions in this case. See, e.g., Candelario Del Moral v. UBS Fin. Servs. Inc. ( Candelario II ), 699 F.3d 93, 95–99 (1st Cir.2012); Candelario–Del Moral v. UBS Fin. Servs. Inc. ( Candelario III ), 290 F.R.D. 336, 338–39 (D.P.R.2013); Candelario Del Moral v. UBS Fin. Servs. Inc. ( Candelario I ), 691 F.Supp.2d 291, 294–300 (D.P.R.2010).

The putative intervenor, David Efron, and his former wife, Madeleine Candelario–Del–Moral, have been engaged in acrimonious and long-running litigation related to their high-stakes divorce. At one time, Efron had more than $11,000,000 in accounts at UBS Financial Services Inc. (UBS). In October of 2006, a Puerto Rico court in which the divorce proceedings were pending issued an order effectively attaching the funds held in Efron's UBS accounts. Soon thereafter, the court made a ruling that may or may not have sufficed to vacate the attachment. See Candelario II, 699 F.3d at 101–04 (describing reasons for uncertainty about the effect of the ruling). UBS, at Efron's urging, treated the attachment as void and dispersed the bulk of the funds. By the time the matter was clarified, there were insufficient funds remaining to satisfy Candelario's demands.

Candelario took umbrage. She repaired to the federal district court, invoked diversity jurisdiction, see28 U.S.C. § 1332(a), and sued UBS for negligently releasing the attached funds. After considerable skirmishing, the district court, ruling on cross-motions for summary judgment, awarded Candelario nearly $4,000,000. Candelario I, 691 F.Supp.2d at 304. Both parties appealed. We held that summary judgment was premature and remanded the case for further proceedings. Candelario II, 699 F.3d at 105–06, 107.

We digress for a moment. The suit brought by Candelario against UBS was only one of several cases touching upon the couple's tangled affairs. Pertinently, Efron filed for bankruptcy protection in March of 2011. The bankruptcy proceeding is relevant here because, on July 28, 2011, UBS filed a contingent proof of claim seeking indemnification for any sums paid to Candelario by way of judgment or settlement in her tort case against UBS. This right of indemnification, UBS asserted, flowed from the provisions of its account agreement with Efron (an agreement that dated back to 2002).

We return now to the tort case. Following our remand, Candelario and UBS, at the district court's suggestion, opted to undertake mediation. On March 4, 2013, UBS sent Efron an electronic letter informing him that it had scheduled the first mediation session for the next day and reiterating that it would seek indemnification if a settlement was achieved. One week later, Efron—a veteran trial lawyer, proceeding pro se—moved to intervene as of right in the Candelario–UBS litigation. Candelario opposed Efron's motion.¹

The district court noted that Efron's motion to intervene failed to comply with mandatory procedural requirements in that it was not accompanied by a proposed pleading. See Candelario III, 290 F.R.D. at 340 n. 3 (citing Fed.R.Civ.P. 24(c)). Although the court acknowledged that it could deny the motion on this procedural ground alone, it nonetheless elected to go further, see id.; see also Pub. Citizen v. Liggett Grp., Inc., 858 F.2d 775, 783–84 (1st Cir.1988) (noting that a district court may elect to entertain a procedurally deficient motion to intervene), and denied the motion on the merits, see Candelario III, 290 F.R.D. at 340 n. 3. Efron appeals.

II. ANALYSIS

This appeal raises three issues, which the parties present in a series of back-and-forth volleys. First, Candelario claims that we lack appellate jurisdiction to review the denial of intervention here and now. Second, Efron claims that the district court improvidently denied the motion to intervene. Third, Candelario claims that Efron's prosecution of the appeal is sanctionable. We examine these issues one by one.

A. Appellate Jurisdiction.

We start with the jurisdictional question. For the most part, interlocutory rulings are not immediately appealable but must be held in abeyance until the entry of final judgment. See Torres v. Puerto Rico, 485 F.3d 5, 8 (1st Cir.2007); see also28 U.S.C. § 1291. But this general rule, like virtually every general rule, admits of exceptions. One such exception, established beyond hope of contradiction, holds that the courts of appeals have jurisdiction, on an interlocutory basis, to review the denial of motions to intervene as of right. See, e.g., Pub. Serv. Co. of N.H. v. Patch, 136 F.3d 197, 204 (1st Cir.1998).

In federal civil cases, intervention as of right is governed by the provisions of Federal Rule of Civil Procedure 24(a). That rule authorizes the district court to allow intervention by any person or entity who, by a timely motion, “claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest.” Fed.R.Civ.P. 24(a)(2). Efron's motion was styled as a motion to intervene as of right and appears to make a colorable showing of the elements prescribed by Rule 24(a)(2).

Candelario counters that Efron never adequately identified how his interest in this case would be impaired by his exclusion from it. The central premise of her argument is that this shortcoming, compounded by Efron's failure to annex a proposed pleading to his motion, somehow converted his motion to intervene into an attempt to gain permissive intervention. Building on this premise, she argues that we lack jurisdiction to review interlocutory orders denying permissive intervention.

This argument is bootless. Even though the scope of our jurisdiction to hear interlocutory appeals from the denial of motions seeking permissive intervention is freighted with uncertainty, see generally 7C Charles A. Wright and Arthur R. Miller et al., Federal Practice and Procedure § 1923 (3d ed.2013), that uncertainty is immaterial here because the premise on which Candelario's argument rests is faulty. Efron moved for intervention as of right; the district court considered his motion under Rule 24(a)(2); and—timeliness aside—Efron has a colorable claim to such intervention. The fact that Efron neglected to conform to some of the procedural requirements for as-of-right intervention is regrettable, as is his failure to develop his arguments about his interests in the case. But those failures do not by some mysteriousalchemy transmogrify his motion into one for permissive intervention.

To sum up, Efron is appealing from the denial of a motion to intervene as of right. It follows that we have jurisdiction to hear and determine his interlocutory appeal.

B. The Merits.

We turn next to Efron's challenge to the district court's denial of his motion. To succeed on a motion to intervene as of right, a putative intervenor must demonstrate:

(i) the timeliness of [his] motion to intervene; (ii) the existence of an interest relating to the property or transaction that forms the basis of the pending action; (iii) a realistic threat that the disposition of the action will impede [his] ability to protect that interest; and (iv) the lack of adequate representation of [his] position by any existing party.

R & G Mortg. Corp. v. Fed. Home Loan Mortg. Corp., 584 F.3d 1, 7 (1st Cir.2009). The putative intervenor “must run the table and fulfill all four of these preconditions.” Patch, 136 F.3d at 204.

The first of these elements—timeliness—is the sentinel that guards the gateway to intervention. The court below focused the lens of its inquiry on the question of timeliness. See Candelario III, 290 F.R.D. at 340–42. We emulate that sensible approach.

In this context, timeliness involves more than merely checking off the pages of a calendar. But even though multiple factors may influence the timeliness inquiry, see Banco Popular de P.R. v. Greenblatt, 964 F.2d 1227, 1231 (1st Cir.1992); Culbreath v. Dukakis, 630 F.2d 15, 20–24 (1st Cir.1980), the most...