Schultz v. Connery, 88-1050

• Decision Date: 21 December 1988
• Docket Number: No. 88-1050,88-1050
• Citation: 863 F.2d 551
• Parties: Roy W. SCHULTZ, Plaintiff-Appellee, Advance Transportation Company, a Wisconsin Corporation, Proposed Intervening Plaintiff-Appellant, v. John CONNERY, II, Defendant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 551

863 F.2d 551

12 Fed.R.Serv.3d 920

Roy W. SCHULTZ, Plaintiff-Appellee, Advance Transportation Company, a Wisconsin Corporation, Proposed Intervening Plaintiff-Appellant, v. John CONNERY, II, Defendant.

No. 88-1050.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 15, 1988.

Decided Dec. 21, 1988.

John Bernard Cashion, Chicago, Ill., for plaintiff-appellee.

Christopher D. Walther, Walther & Walther S.C., Milwaukee, Wis., for proposed intervening plaintiff-appellant.

Before COFFEY, FLAUM and EASTERBROOK, Circuit Judges.

COFFEY, Circuit Judge.

Appellant Advance Transportation Company appeals the order of the United States District Court denying its motion to intervene pursuant to Federal Rule of Civil Procedure 24(a) in an action filed by the plaintiff-appellee Roy Schultz against defendant John Connery, II. We affirm.

I.

This appeal arises from a civil action commenced on July 5, 1984, for personal injuries sustained by Schultz in a motor vehicle accident with Connery. ¹ The accident occurred while Schultz, an employee of Advance, was driving a truck owned by Advance. ² Consequently, Advance, through its self-insured worker's compensation fund, paid Schultz benefits pursuant to Wisconsin's Worker's Compensation Act. Wis.Stat. Sec. 102.01 et seq. Schultz thereafter filed an application for rehearing with the State of Wisconsin, Department of Industry, Labor and Human Relations, Worker's Compensation Division seeking benefits in addition to those originally conceded and paid by Advance. Upon rehearing, the Department required Advance to pay the additional benefits sought by Schultz. To date, Advance has paid Schultz approximately $61,000 in worker's compensation benefits, including medical and vocational care and attendants.

On November 10, 1987, more than three years after Schultz filed the underlying action against Connery, Advance filed a motion pursuant to Federal Rule of Civil Procedure 24(a) to intervene in Schultz's suit against Connery. The district court denied Advance's motion, concluding that the motion was untimely and that Advance had failed to establish that Schultz was inadequately representing Advance's interest in his suit against Connery. Advance appeals the denial of its motion to intervene arguing: (1) the district court abused its discretion in finding that Advance's motion was untimely; and (2) the district court erred as a matter of law by denying Advance's motion to intervene as a matter of right. ³

II.

The threshold inquiry in this case is whether Advance's motion to intervene was timely. As the United States Supreme Court in NAACP v. New York, 413 U.S 345, 365-66, 93 S.Ct. 2591, 2602-03, 37 L.Ed.2d 648, 662-63 (1973), stated:

"Intervention in a federal court suit is governed by Fed.Rule Civ.Proc. 24.... [I]t is at once apparent from the initial words of ... Rule 24(a) ... that the application must be 'timely.' If it is untimely, intervention must be denied. Thus, the court where the action is pending must first be satisfied as to timeliness. Although the point to which the suit has progressed is one factor in the determination of timeliness, it is not solely dispositive. Timeliness is to be determined from all the circumstances. And it is to be determined by the court in the exercise of its sound discretion; unless that discretion is abused, the court's ruling will not be disturbed on review."

(footnotes omitted). This court has repeatedly held that " 'the district court's determination of whether the requested intervention is timely may be reversed only for an abuse of discretion.' " City of Bloomington, Indiana v. Westinghouse Electric Corp., 824 F.2d 531, 534 (7th Cir.1987) (quoting Jones v. Caddo Parish School Board, 735 F.2d 923, 926 (5th Cir.1984)). See also United States v. City of Chicago, 796 F.2d 205 (7th Cir.1986), cert. denied, 479 U.S. 1086, 107 S.Ct. 1291, 94 L.Ed.2d 148 (1987); Holland v. Sterling Enterprises, Inc., 777 F.2d 1288 (7th Cir.1985). The determination of whether a motion to intervene was made in a timely fashion depends on the totality of the circumstances. City of Bloomington, Indiana, 824 F.2d at 534. However, this court has enumerated four factors that should be considered in making such a determination:

"(1) The length of time the intervenor knew or should have known of his interest in this case, (2) the prejudice to the original party caused by the delay, (3) the resulting prejudice to the intervenor of the motion is denied, and (4) any unusual circumstances."

South v. Rowe, 759 F.2d 610, 612 (7th Cir.1985) (citing United States v. Kemper Money Market Fund, Inc., 704 F.2d 389, 391 (7th Cir.1983)).

Applying these standards the district court found:

"In this case Advance knew or should have known of its interest in the case over three years ago when the case was initially filed. Under Wisconsin law, Advance received a right to bring legal proceedings against the alleged tortfeasor by making worker's compensation payments to the plaintiff.... Advance has failed to show that it would suffer any prejudice by not being allowed to intervene. By contrast, the plaintiff has shown a likelihood of prejudice if the defendant intervenes.... There are no unusual circumstances in this case. Given the above facts, the applicant's motion is untimely."

Advance does not dispute, and we therefore adopt, the district court's findings with regard to the length of time Advance knew or should have known of its interest in this case and the lack of unusual circumstances to justify Advance's three-year delay in moving to intervene in the underlying action. Rather, Advance argues that the denial of its motion to intervene should be reversed because the district court abused its discretion by ruling that Schultz would be prejudiced by Advance's intervention and that Advance would suffer no prejudice by the denial of its motion to intervene.

The district court found that Schultz would be prejudiced by Advance's intervention because "[U]nder the Wisconsin statutory scheme, Advance would be allowed to recover attorney's fees if this motion for intervention is granted. The payment of attorney's fees to Advance would directly reduce the ... recovery of the plaintiff." Even assuming arguendo that this finding draws support in the record, ⁴ the consideration of whether Schultz will be prejudiced by Advance's intervention is irrelevant. The relevant determination is the prejudice to Schultz resulting from Advance's delay in intervening. City of Bloomington, Indiana, 824 F.2d at 535. As the Fifth Circuit aptly stated in Stallworth v. Monsanto Co., 558 F.2d 257, 265 (5th Cir.1977):

"[T]he prejudice to the original parties to the litigation that is relevant to the question of timeliness is only that prejudice which would result from the would-be intervenor's failure to request intervention as soon as he knew or reasonably should have known about his interest in the action."

In finding that Advance's motion to intervene was untimely, the district court failed to consider the prejudice to Schultz resulting from Advance's delay in intervening. As a result, we will make that determination on appeal.

Advance contends that Schultz will not be prejudiced by the delay in Advance's intervention because under Wisconsin law Advance had an interest in the proceeds of Schultz's claim as soon as it made the worker's compensation payments to Schultz. The Wisconsin Worker's Compensation Act ("WWCA") sets forth the formula under which Advance's and Schultz's shares in the proceeds from this lawsuit will be determined:

"[I]rrespective of whether or not all parties [having a right to make claim] join in prosecuting such claim, the proceeds of such claim shall be divided as follows: After deducting the reasonable costs of collection, one-third of the remainder shall in any event be paid to the injured employe or the employe's personal representative or other person entitled to bring action. Out of the balance remaining, the employer or insurance carrier shall be reimbursed for all payments made by it, or which it may be obligated to make in the future.... Any balance remaining shall be paid to the employe or the employe's personal representative or other person entitled to bring action."

Wis.Stat. Sec. 102.29(1). While this provision makes clear that Advance does indeed have an interest in the proceeds of this lawsuit, it also explicitly provides that neither Advance's nor Schultz's interests are dependent on whether Advance is a party to this lawsuit. If Schultz's interest in the proceeds from this action are not dependent on whether Advance intervenes, we fail to understand...