State Farm Mut. Auto. Ins. Co. v. Colley

Decision Date24 March 1994
Docket NumberNo. 93-153,93-153
Citation871 P.2d 191
PartiesSTATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant (Applicant), v. Alice Ione Halstead COLLEY, as personal representative of Jody Glenn Dodgion, deceased, and as administratrix of the Estate of Jody Glenn Dodgion, deceased, and on behalf of Alice Ione Halstead, as guardian and guardian ad litem for Jordan Jody Halstead; and on behalf of Judy Butler, Glenn Dodgion, Bryan Lee Butler, Amanda Colleen Butler, and Kayla Dawn Butler, Appellee (Plaintiff).
CourtWyoming Supreme Court

Frederick J. Harrison, Rawlins, for appellant.

Robert N. Williams, Meyer and Williams, Jackson, for appellee.

Before MACY, C.J., THOMAS, CARDINE and TAYLOR, JJ. and BROWN, J. (Retired).

TAYLOR, Justice.

An insurer claiming an interest in a wrongful death cause of action appeals the district court's denial of a motion to intervene. The insurer maintains that a judgment by default entered as a discovery sanction against an allegedly culpably negligent party prejudiced the insurer's ability to protect its interest. The district court ruled that the insurer's motion was not timely.

We affirm.

I. ISSUES

Appellant, State Farm Mutual Automobile Insurance Company, identifies the following issues:

I. Whether Appellant State Farm Mutual Automobile Insurance Company had a right to intervene pursuant to Wyo.R.Civ.P. 24(a).

II. Whether the motion to intervene was timely made.

III. Whether State Farm has a significantly protectable interest in the subject matter of this litigation.

IV. Whether State Farm's ability to protect its interest is impaired by its not being allowed to intervene.

V. Whether Defendant Teddy Ray Dyer can adequately represent State Farm's interest.

II. FACTS

Jody Glenn Dodgion (Dodgion) died after suffering head injuries while riding in a truck owned by Steven D. Boyd (Boyd). Boyd apparently permitted the truck to be used to haul materials and employees of his business, Rock Springs Roofing Company. On September 24, 1985, Teddy Ray Dyer (Dyer), an employee of Rock Springs Roofing Company, drove the truck to the landfill operated by the City of Green River, Wyoming. Dyer and his passenger Dodgion, also an employee of Rock Springs Roofing Company, were leaving the landfill when the truck collided with a cable which was secured by a heavy steel chain. The barrier had been extended across the road by employees of the City of the Green River to prevent use of the landfill. The obstruction snapped from the impact and a length of chain penetrated the rear window of the truck striking Dodgion.

On September 23, 1987, Alice Ione Halstead Colley, the personal representative of Dodgion's estate and guardian of Dodgion's son, and other claimants (collectively Colley) filed a wrongful death action in the Third Judicial District in and for Sweetwater County, Wyoming (hereinafter state district court). See Butler v. Halstead By and Through Colley, 770 P.2d 698 (Wyo.1989) (holding mother and siblings could join in wrongful death cause of action brought by surviving child). Colley sought damages from the City of Green River and Dyer. Colley alleged that the City of Green River had been negligent in failing to provide a safe means of closing the road from the landfill. Colley also alleged Dyer was culpably negligent in the manner in which he operated Boyd's truck. Boyd was not a named party to the wrongful death action. See State ex rel. Wyoming Workers' Compensation Div. v. Halstead, 795 P.2d 760 (Wyo.1990).

Colley failed to complete personal service of process on Dyer because he had apparently left Wyoming. See Wyo.Stat. § 1-6-301 (1988) (appointing Secretary of State as agent to receive service of process for non-resident motorists). Boyd's insurer, State Farm Mutual Automobile Insurance Company (State Farm), was notified of the action against the driver of the truck. State Farm retained counsel to act on behalf of Dyer and to respond to the wrongful death action.

Despite retaining counsel for Dyer, State Farm maintained that under its policy of insurance with Boyd, it had no obligation to tender a defense or to indemnify Dyer for any judgment. State Farm filed a declaratory judgment action in the United States District Court for the District of Wyoming (hereinafter federal district court) claiming that language of the policy did not provide coverage for business use of Boyd's truck. The federal district court agreed that State Farm had no obligation to tender a defense or pay any judgment that might be entered against Dyer. State Farm Mutual Auto. Ins. Co. v. Dyer, No. C88-0148-B, slip op. at 2 (D.Wyo. July 28, 1989). On August 17, 1989, Colley appealed the federal district court ruling to the United States Court of Appeals for the Tenth Circuit. In an opinion published March 15, 1994, the decision of the federal district court was affirmed. State Farm Mutual Automobile Ins. Co. v. Dyer, 19 F.3d 514 (10th Cir.1994).

Meanwhile, the counsel retained to act on Dyer's behalf by State Farm filed an answer in state district court challenging the substituted service of process. The state district court ruled that service of process was defective. An appeal to this court reversed that ruling and remanded the matter for a hearing to determine whether Colley had exercised due diligence in attempting to locate Dyer under the non-resident motorist statute. Colley v. Dyer, 821 P.2d 565, 569 (Wyo.1991).

Following remand, the state district court ruled that Colley had exercised due diligence in attempting to locate Dyer. Therefore, Colley was permitted to proceed with the wrongful death action against Dyer. By then, the City of Green River had reached a separate settlement with Colley and was dismissed from the action with prejudice.

During pretrial proceedings, Colley renewed an earlier motion for an order striking Dyer's answer and affirmative defenses as a sanction for his failure to participate in discovery. W.R.C.P. 37(b)(2)(C). On November 2, 1992, the state district court ordered that Dyer's answer and affirmative defenses be struck from the record. The state district court also granted a judgment by default against Dyer on the issue of liability. The state district court scheduled a hearing to determine the amount of damages.

On March 19, 1993, State Farm filed a motion to intervene in the wrongful death action in state district court. State Farm sought to intervene to obtain an order vacating the judgment against Dyer on the issue of liability. State Farm also sought to intervene to assert various defenses, including the comparative negligence of other actors.

The state district court denied State Farm's motion to intervene. The state district court noted that in November of 1989, Colley had initially filed a motion to strike Dyer's answer without any effort by State Farm to intervene. The state district court ruled the motion to intervene was not timely. Furthermore, the state district court found that State Farm's interests were not prejudiced. A motion for W.R.C.P. 11 sanctions sought by Colley was denied.

III. DISCUSSION

W.R.C.P. 24(a)(2) permits a party to intervene as of right in an action:

(a) Intervention of right.--Upon timely application anyone shall be permitted to intervene in an action:

* * * * * *

(2) When the applicant claims an interest relating to the property or transaction which is the subject of the action 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 represented by existing parties.

Four conditions must be satisfied to permit intervention as of right under W.R.C.P. 24(a)(2). First, the applicant must claim an interest related to the property or transaction which is the subject of the action. Second, the applicant must be so situated that the disposition of the action may, as a practical matter, impair or impede the applicant's ability to protect that interest. Third, there must be a showing that the applicant's interest will not be adequately represented by the existing parties. Fourth, the application for intervention must be timely. James S. Jackson Co., Inc. v. Horseshoe Creek Ltd., 650 P.2d 281, 286 (Wyo.1982) (quoting Platte County School Dist. No. 1 v. Basin Elec. Power Co-op., 638 P.2d 1276, 1278 (Wyo.1982)). An applicant who fails to meet any one of these conditions is not permitted to intervene as of right under W.R.C.P. 24(a)(2). Platte County School Dist. No. 1, 638 P.2d at 1280. While State Farm maintains its application for intervention satisfied all four conditions, we need only address the interest requirement of the first condition and the timeliness requirement of the fourth condition. W.R.C.P. 24(a)(2).

Questions of law and judicial discretion are presented by the denial of a motion to intervene. Platte County School Dist. No. 1, 638 P.2d at 1278. This court accords no deference to a district court's decisions on issues of law. Prudential Preferred Properties v. J and J Ventures, Inc., 859 P.2d 1267, 1271 (Wyo.1993). Therefore, if the district court erroneously denied intervention as of right under the first, second or third conditions of W.R.C.P. 24(a)(2), we will reverse. However, the determination of the timeliness of an application to intervene is a matter within the discretion of the district court. Curless v. Curless, 708 P.2d 426, 432 (Wyo.1985). The district court is permitted to weigh the timeliness of an application to intervene in light of the circumstances of the particular case, including whether the applicant may have sought intervention earlier. Id. Therefore, to prevail on an appeal from a finding that an application to intervene is untimely, an abuse of discretion must be demonstrated. See also 7C Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure: Civil 2d § 1923 (1986 & Cum.Supp.1993).

In Platte County School Dist....

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