Llewellyn v. Beasley, 1-1079A278

• Citation: 415 N.E.2d 789
• Decision Date: 09 February 1981
• Docket Number: No. 1-1079A278,1-1079A278
• Parties: Ralph A. LLEWELLYN and Glen Williams, as taxpayers of Clay Community Schools and parents of school children in Clay Community Schools, Intervenors-Appellants, v. James R. BEASLEY, John R. Bradshaw and Forrest Buell, Plaintiffs and Counterdefendants-Appellees, v. Ralph A. LLEWELLYN, Glen Williams, Gerald Thomas, Clay Community Schools, and Clay Community Schools Building Corp., Defendants and Counterclaimants-Appellees, v. David ROSENFELD, Robert Wolfe and Eric Frey d/b/a Rosenfeld, Wolfe and Frey, Cross-defendants-Appellees.
• Court: Court of Appeals of Indiana

Page 789

415 N.E.2d 789

Ralph A. LLEWELLYN and Glen Williams, as taxpayers of Clay

Community Schools and parents of school children

in Clay Community Schools, Intervenors-Appellants, v. James R. BEASLEY, John R. Bradshaw and Forrest Buell, Plaintiffs and Counterdefendants-Appellees, v. Ralph A. LLEWELLYN, Glen Williams, Gerald Thomas, Clay

Community Schools, and Clay Community Schools

Building Corp., Defendants and Counterclaimants-Appellees, v. David ROSENFELD, Robert Wolfe and Eric Frey d/b/a Rosenfeld, Wolfe and Frey, Cross-defendants-Appellees.

No. 1-1079A278.

Court of Appeals of Indiana, First District.

Feb. 9, 1981.

David D. Haynes, Brames, Bopp & Haynes, Terre Haute, for intervenors-appellants.

Jane Woodward Miller, Miller & Miller, South Bend, for Clay Community School Building Corp.

James O. McDonald, Everett, Everett & McDonald, Terre Haute, for Clay Community Schools.

RATLIFF, Judge.

STATEMENT OF THE CASE

Ralph A. Llewellyn and Glen L. Williams as residents, taxpayers, and patrons of the Clay Community School District, formerly members of the Board of Trustees of the Clay Community Schools, appeal the Parke Circuit Court's denial of their Motion to Intervene pursuant to Ind.Rules of Procedure, Trial Rule 24. We affirm.

FACTS

The facts in this case involve a complex concatenation of legal events revolving around a building program embarked upon by the Clay Community Schools in 1977. Llewellyn and Williams had been members of the Board of Trustees of the Clay Community Schools on June 3, 1977, when the Board entered into a lease construction agreement with the Clay Community Schools Building Corporation and certain financial arrangements attendant thereto. Llewellyn and Williams were also members of the Board in July 1977 when the Board voted to change the date of the election of school board members from May to November and the terms of board members to run from January 1 to December 31 rather than from July 1 to June 30. This action by the Board extended by six months the terms of Llewellyn, Williams, and Thomas, a third Board member not a party to the Motion to Intervene. James Beasley, John Bradshaw, and Forrest Buell, contending they were the duly elected members of the Board of Trustees on May 2, 1978, filed an action in quo warranto and a complaint for injunctive relief seeking, inter alia, to oust Llewellyn, Williams, and Thomas and to have themselves declared Board members. In their second amended complaint these plaintiffs also sought to prevent implementation of the lease construction contract by the Clay Community Schools and added the Clay Community School Building Corporation as a defendant. The Building Corporation counterclaimed for damages under its contract with the Schools asserting that the validity of the lease construction agreement had been upheld by the United States Supreme Court when it denied certiorari in the taxpayer suit, Arthur v. Clay Community Schools, (1978) 439 U.S. 806, 99 S.Ct. 62, 58 L.Ed.2d 98, reh. den. 439 U.S. 998, 99 S.Ct. 602, 58 L.Ed.2d 672. This case affirmed the requirement of posting bond in taxpayer public action suits. Clay Community Schools also counterclaimed against plaintiffs Beasley, Bradshaw, and Buell, as well as the partners of the law firm of Rosenfeld, Wolfe, and Frey, who were involved in at least four lawsuits against the School over the issue of the building program. The Schools contended that the counterdefendants and defendants had engaged in abuse of process by conducting frivolous litigation solely for the purpose of thwarting implementation of the construction project and that they had also interfered with the contractual agreement between the Schools and the Building Corporation. The Building Corporation also cross-claimed against the Schools for a Declaratory Judgment to aid in the implementation of the lease construction contract. Early in February 1979 counterdefendants Beasley, Bradshaw, and Buell and defendants Rosenfeld, Wolfe, and Frey jointly moved the court to dismiss the amended counterclaim of the Schools against them. Said movants were at that point members of the School Board and its counsel, respectively. Having received a letter to the effect that financial commitments for the construction program could not be continued beyond March 1, 1979, the Building Corporation moved for an emergency hearing on its cross-claim for a Declaratory Judgment against the Schools. Said hearings were held on February 26 and 28, 1979. On March 5, 1979, a stipulation was signed by the Building Corporation, but not by the Schools, and approved by the court, to the effect that the lease construction agreement and financial commitments attendant thereto were valid and binding. On the same day the court also signed an order which went beyond the stipulations of the parties and declared that if the revised bids and lease payments exceeded the original estimates and purchase price the obligations of the lease agreement and appurtenant financing agreements were null and void. Several counts of the original and subsequent amended complaints having been dismissed, the court upon the plaintiff's motion for summary judgment ruled that the Board of Trustees' action in extending the terms of office of the three members to be invalid but that Llewellyn, Williams, and Thomas were de facto members of the Board and that the actions taken by the Board during this time were also "de facto."

On March 22, 1979, Llewellyn and Williams filed a Motion to Intervene not only in the cross-claim which was adjudicated on March 5, 1979, but also in the counterclaim which the Schools had filed on December 29, 1978. A hearing on intervenors' petition was set for April 12, 1979. On April 10, 1979, the Building Corporation filed a Notice of Dismissal of its counterclaim against Beasley, Bradshaw, and Buell. The court denied intervenors' petition on May 7, 1979, in the following judgment entry: "Comes now the court and overrules defendants', Ralph A. Llewellyn and Glen L. Williams, motion to intervene." Intervenors tendered a motion to correct errors which the court overruled on July 23, 1979. Appeal was perfected from the overruling of the motion to correct errors.

ISSUE

Did the trial court err in refusing to grant appellants' Motion to Intervene under Ind. Rules of Procedure, Trial Rule 24?

DISCUSSION AND DECISION

The matter of intervention is controlled by T.R. 24:

"(A) Intervention of right. Upon timely motion anyone shall be permitted to intervene in an action

(1) when a statute confers an unconditional right to intervene; or

(2) when the applicant claims an interest relating to a property, fund or transaction, which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect his interest in the property, fund or transaction, unless the applicant's interest is adequately represented by existing parties.

"(B) Permissive intervention. Upon timely filing of his motion anyone may be permitted to intervene in an action

(1) when a statute confers a conditional right to intervene; or

(2) when an applicant's claim or defense and the main action have a question of law or fact in common. When a party to an action relies for ground of claim or defense upon any statute or executive order administered by a federal or state governmental officer or agency or upon any regulation, order, requirement, or agreement issued or made pursuant to the statute or executive administrative order, the governmental unit upon timely application may be permitted to intervene in the action. In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.

"(C) Procedure. A person desiring to intervene shall serve a motion to intervene upon the parties as provided in Rule 5. The motion shall state the grounds therefor and set forth or include by reference the claim, defense or matter for which intervention is sought. Intervention after trial or after judgment for purposes of a motion under Rules 50, 59, or 60, or an appeal may be allowed upon motion. The court's determination upon a motion to intervene may be challenged only by appeal from the final judgment or order in the cause." ¹

Appellants contend that they are entitled to intervene in the subject actions as of right under T.R. 24(A)(2). Appellants do not raise the question of permissive intervention under T.R. 24(B) in their initial brief, although they reply to appellees' arguments on this point. Appellants seem to concede, therefore, that in the absence of a right to intervene under T.R. 24(A)(2), the refusal of the trial court to permit intervention under T.R. 24(B) was not error. The question in this appeal is limited to the issue of intervention as of right pursuant to T.R. 24(A)(2).

It has been posited that the distinguishing feature between the two types of intervention under T.R. 24 is that while an application for permissive intervention is directed to the discretion of the court, an application for intervention as of right seems to pose only a question of law. 7A Wright &amp Miller, Federal Practice and Procedure § 1902 (1972). Upon scrutiny of the cases dealing with T.R. 24, however, such an analysis appears to be an oversimplification. Determinations under T.R. 24(A)(2) must be classed as a mixed question of law and fact.

Indiana cases interpreting T.R. 24(A)(2) have adopted the threefold test followed by Federal Courts in interpretation of its double, Rule 24(a)(2) of the Federal Rules of Civil Procedure as amended in 1966. As a matter of law, this test requires that intervenors show (1) an interest in the subject of the action, (2) disposition of the action may as a practical matter impede protection of that interest, and (3) representation of the interest by existing parties is inadequate. Hinds v. McNair, (1972) 153...