Cole v. Crown Equip. Corp.
| Docket Number | 3:22-CV-935-JD-MGG |
| Decision Date | 24 May 2023 |
| Parties | KEVIN COLE, et al., Plaintiffs, v. CROWN EQUIPMENT CORPORATION, Defendant. |
| Court | U.S. District Court — Northern District of Indiana |
Before the Court is a Motion to Intervene filed by movant ICW Group Companies, Inc. (“ICW”). For the reasons discussed below, ICW's Motion is denied.
On August 17, 2022, Plaintiff Kevin Cole was working at Bailey's Discount Center, Inc. (“Bailey's Discount”) in North Judson, Indiana, when the Picker Lift he was operating malfunctioned, causing him extensive and permanent injury. ICW provided worker's compensation insurance for Bailey's Discount at the time of Mr Cole's injury and accepted Mr. Cole's claim under the Indiana Worker's Compensation Act. Accordingly, ICW has paid, and continues to pay, worker's compensation benefits to Mr. Cole because of this injury.
Defendant Crown Equipment Corporation (“Crown Equipment”) manufactured the Picker Lift used by Mr. Cole when he was injured. Therefore, on October 24, 2022, Mr. Cole and his wife, Selena Cole, (collectively, “the Coles”) filed the instant action against Crown Equipment in Starke County Circuit Court. The Coles' five-count 1 complaint asserts claims against Crown Equipment for strict liability, breach of express or implied warranties, and negligence. Crown Equipment removed the Coles' case to this Court on November 7, 2022, based on diversity jurisdiction. ICW then filed the instant petition to intervene under Federal Rule of Civil Procedure 24 on April 18, 2023. Its motion became ripe on May 2, 2023, with no response filed by either party. See N.D. Ind. L.R. 7-1(d)(3), (5).
Federal Rule of Civil Procedure 24 provides for two types of intervention: intervention as a matter of right under Rule 24(a) and permissive intervention under Rule 24(b). The Court must permit intervention as of right when the movant “claims an interest relating to the . . . 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). As such, “a petitioner must meet four criteria to intervene as of right: ‘(1) timely application; (2) an interest relating to the subject matter of the action; (3) potential impairment, as a practical matter, of that interest by the disposition of the action; and (4) lack of adequate representation of the interest by the existing parties to the action.'” Reich v. ABC/York-Estes Corp., 64 F.3d 316, 321 (7th Cir. 1995) (quoting Shea v. Angulo, 19 F.3d 343, 346 (7th Cir. 1994)). On the other hand, Rule 24(b)(2) states that permissive intervention may be allowed when the movant “has a claim or defense that shares with the main action a common question of law or fact.” Fed.R.Civ.P. 24. The rule goes on to note that “[i]n exercising its discretion, the court must consider whether the intervention will unduly delay or prejudice the adjudication of the original parties' rights.” Id.
ICW invokes Indiana Code § 22-3-2-13, a provision of the Indiana Worker's Compensation Act (“the Act”), as its basis to intervene. The Act requires an employer to “provide limited compensation to workers whose injuries arise out of and in the course of their employments.” Spangler, Jennings & Dougherty P.C. v. Indiana Ins. Co., 729 N.E.2d 117, 120 (Ind. 2000) (internal citation omitted). Benefits paid under the Act are meant “to replace the future wages that the employee would earn if he were able to continue work.” Id. at 121. An injured employee may also file suit against a third party under Ind. Code § 22-3-2-13. A suit against a third party may include claims seeking damages for pain, suffering, or other losses caused by the injury.
An employer, or an employer's compensation insurer, may pay benefits before the employee files suit against a third party. Sprangler, 729 N.E.2d at 120; see also Ind. Code § 22-3-2-13(a) () In this circumstance, the Act prevents a “double recovery by the employee” by affording the employer or the employer's compensation insurer a lien on any amount recovered by the injured employee in the third-party suit. Niegos v. Arcelor Mittal Burns Harbor LLC, 940 N.E.2d 323, 327 (Ind.Ct.App. 2010); see also § 22 3-2-13(d) (“If the injured employee . . . shall agree to receive compensation from . . . the employer's compensation insurance carrier . . . the employer's compensation insurance carrier shall have a lien upon any settlement award, judgment or fund out of which the employee might be compensated from the third party.”)
That is the circumstance leading to ICW's intervention motion here. ICW contends that it has an interest in the proceeds of this lawsuit because it has paid worker's compensation benefits to Mr. Cole, and as such, it has a lien on any settlement award or judgment obtained by the Coles under Ind. Code § 22-3-2-13(d). ICW seeks to intervene so it can enforce this lien and recover payments made to Mr. Cole if the Coles win a judgment against Crown Equipment. ICW also explains that, due to these subrogation rights, its consent is also necessary before any settlement may be reached in this action. ICW further maintains that, if it is not permitted to intervene in this matter, its ability to protect its interests will be impeded or impaired as none of the existing parties adequately represent its interests. ICW explains that neither party adequately represents its interests because the Coles aim to maximize their own recovery while Crown Equipment denies liability.
ICW's motion broadly cites to Rule 24 and does not explicitly state whether it is seeking intervention as of right or permissive intervention. However, ICW's motion references the criteria for intervention as of right, so the Court construes ICW's motion under Fed.R.Civ.P. 24(a).
No party has responded to ICW's instant motion. The Court is usually inclined to summarily grant such uncontested motions, but intervention as of right may only be permitted when “the party seeking to intervene [as] of right [] show[s] that all four criteria are met.” Reid L. v. Illinois State Bd. of Educ., 289 F.3d 1009, 1017 (7th Cir. 2002); see also Keith v. Daley, 764 F.2d 1265, 1268 (7th Cir. 1985) () Here, the Court cannot find that ICW met its burden.
First, ICW must show that its motion was timely. “The test for timeliness is essentially one of reasonableness: potential intervenors need to be reasonably diligent in learning of a suit that might affect their rights, and upon so learning they need to act reasonably promptly.” Reich, 64 F.3d at 321 (quotations omitted). There are “four factors to determine whether a motion is timely: (1) the length of time the intervenor knew or should have known of his interest in the case; (2) the prejudice caused to the original parties by the delay; (3) the prejudice to the intervenor if the motion is denied; [and] (4) any other unusual circumstances.” Grochocinski v. Mayer Brown Rowe & Maw, LLP, 719 F.3d 785, 797-98 (7th Cir. 2013) (quotations omitted).
Here, ICW filed its motion on April 18, 2023, approximately five months after the Coles filed suit in Starke Circuit Court. ICW presents no information regarding when it received notice of the instant action or any other information regarding timeliness. Ind. Code § 22-3-2-13(g) does state that an employee must notify the employer's compensation insurance carrier within thirty days of filing legal action against a third party. Likewise, Ind. Code § 22-3-2-13(h) provides that an “employer may, within ninety (90) after receipt of notice of suit from the employee . . . join in the action upon the employer's motion ....” But the Act does not refer to any such motion when filed by an employer's compensation insurance carrier. As such, without more from ICW, the Court has no information to determine whether the instant motion is timely or not.
As to the second and third factors, “decisions in the Seventh Circuit reveal that the interest of a potential intervenor must be a ‘direct, significant, legally protectable' one.” Miller v. Jan Lab, Inc., No. 1:13-CV-282, 2014 WL 5465448, at *3 (N.D. Ind. Oct. 28, 2014) (quoting Sec. Ins. Co. of Hartford v. Schipporeit, Inc., 69 F.3d 1377, 1380 (7th Cir. 1995)). Likewise, intervention is permitted when there is a potential impairment of the proposed intervenor's protectable interest by disposal of the action. See Reich, 64 F.3d at 321. Impairment “exists if the decision of a legal question would, as a practical matter, foreclose rights of the proposed intervenor in a subsequent proceeding; foreclosure is to be measured in terms of stare decisis.” Lake Invs. Dev. Grp., Inc. v. Egidi Dev. Grp., 715 F.2d 1256, 1260 (7th Cir. 1983).
Here ICW states that it has an interest in the proceeds of this lawsuit based upon its statutory right of subrogation under Ind. Code § 22-3-2-13(d) and that its interest will be impaired if it is not permitted to intervene. However, ICW also explains that it is entitled to recover benefits it has paid to Mr. Cole from the August 17, 2022, incident, and that any amount recovered by the Coles is subject to its own right of recovery....
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