NO. 91-391
IN THE SUPREME COURT OF THE STATE OF MONTANA
1992
THE ESTATE OF DAVID SCHWENKE, by and
through its Guardian DIANA HUDSON,
-vs-
Plaintiff and Respondent,
D
JOHN CARL BECKTOLD, \d.riffp. 3 - 1993,
Defendant,
and
CLEH< O F SSPI~EIMECOURT
STATE FARM FIRE AND CASUALTY COMPANY, STATEOFMONTANA
Appellant.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable G. Todd Baugh, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
K. D. Peterson; Peterson & Schofield, Billings,
Montana
For Respondent:
Christopher P. Thimsen and Charles A. Murray, Jr.,
Billings, Montana
Submitted on Briefs: October 31, 1991
Decided: March 3, 1992
Filed:
Justice Karla M. Gray delivered the Opinion of the Court.
State Farm Fire and Casualty Company appeals from an order of
the District Court of the Thirteenth Judicial District, Yellowstone
County, denying its motion to intervene in a personal injury action
brought by the estate of y avid Schwenke against John Becktold. We
affirm.
The issues on appeal are:
1. Is the denial of the motion to intervene appealable?
2. Did the District Court err in denying the motion to
intervene?
On October 8, 1989, avid Schwenke received severe, disabling
and permanent head injuries in an automobile accident southwest of
Winnett, Montana. David was a passenger in a vehicle driven by
John Becktold.
The estate of David Schwenke, by and through its guardian,
Diana Hudson (Schwenke), filed a personal injury action on January
16, 1990 against John Becktold alleging that he was negligent in
operating the vehicle involved in the accident and that his
negligence was the proximate cause of David s injuries. On
February 5, 1990, attorney Kenneth Strong entered an appearance and
subsequently filed an answer to the complaint on behalf of John
Becktold .
In order to determine whether insurance coverage existed for
John Becktold, Schwenkels counsel took two depositions. John was
deposed on February 19, 1990. He testified that he had been a
permanent resident of his parents' household since his graduation
from high school in 1982.
Ralph Becktold, John's father, was deposed on March 2, 1990.
The purpose of the deposition was to obtain copies of all insurance
policies which might provide coverage for Ralph Becktold and
members of his household. Ken Amrein, a representative of State
Farm, and attorney Dane Schofield of the law firm of Peterson and
Schofield attended the deposition. Mr. Schofield is the partner of
Kenneth Peterson, counsel for State Farm in this action.
One of the policies obtained as a result of Ralph Becktold's
deposition was a State Farm personal liability umbrella policy that:
provided certain coverage for members of Ralph Becktold's
household. Schwenke's counsel believed that policy provided
insurance coverage for the accident in which David Schwenke was
injured and, on March 27, 1990, sent a letter to State Farm
demanding payment of the policy limit. State Farm apparently never
responded to the letter.
Trial on the personal injury action in the District Court was
set for May 13, 1991. On April 19, 1991, John Becktold filed a
notice of appearance in which he advised the court and counsel that
he was substituting himself, pro se, in place of attorney Strong.
The District Court issued an order allowing Mr. Strong to withdraw
as counsel on April 25, 1991.
Schwenke had filed a declaratory judgment action in federal
court on April 27, 1990 on the question of whether John Becktold
was covered under the umbrella policy. The federal district court
granted summary judgment in favor of State Farm on May 8, 1991,
ruling that there was no coverage under the policy. That same day,
Schwenke appealed to the Ninth Circuit Court of Appeals.
On May 6, 1991, two days before the federal district court
granted summary judgment to State Farm in the declaratory judgment:
action, State Farm filed a motion to intervene in the personal
injury action. The stated purpose of the motion was limited to
"obtaining [a] continuance of the Trial presently set and a stay of
the proceedings in this case pending final resolution of the
Plaintiff's Declaratory Judgment action pending in the Federal
District Court." State Farm specifically requested that it not be
made a party to the action. The District Court denied the motion
to intervene on May 10, 1991, stating:
Given the action in Federal Court, movant has been
aware of this case for a long time. Not only are the
motions not timely but also the Court is not aware of any
basis that allows one not willing to be a party to an
action to intervene for the sole purpose of postponing a
trial between those who are parties to the action.
The case proceeded to trial as scheduled on May 13, 1991.
John Becktold was not present and a jury trial was waived.
Evidence was received by the court in the form of deposition and
live testimony. On June 6, 1991, the District Court entered its
findings of fact and conclusions of law. The court found in favor
of Schwenke and awarded damages in the amount of $3,642,685.32.
Judgment was entered on the same day. Thereafter, State Farm filed
this appeal of the denial of its motion to intervene.
I
Is the denial of the motion to intervene appealable?
Schwenke, citing Continental Insurance Co. v. Bottomly (1988),
233 Mont. 277, 760 P.2d 73, contends that the District Court's
denial of State Farm's motion to intervene is not appealable
pursuant to Rule 1, M.R.App.P. In Bottomlv, we held that in
accordance with Rule 1, M.R.App.P., a party who unsuccessfully
sought to intervene in a district court action could not appeal
prior to the entry of final judgment. We have already addressed
the appealability of the District Court's order in this action. In
an order dated September 17, 1991 denying Schwenke's motion to
dismiss the appeal, we ruled that Bottomly is not controlling and
that the order denying the motion to intervene is appealable
because in this case there has been a final judgment. If State
Farm were denied the opportunity to appeal the District Court's
order, even though a final judgment has been entered, there would
be no procedure by which to challenge the propriety of that order.
I1
Did the District Court err in denying the motion to intervene?
State Farm first asserts that it was entitled to intervene as
a matter of right in the personal injury action between Schwenke
and John Becktold. Rule 24 (a), M.R. Civ.P., governs intervention as
of right and provides in pertinent part:
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.
Rule 24(a), M.R.Civ.P., is almost identical to Federal Rule
24 (a). As noted in 3B Moore's Federal Practice, 24.07 [I], at 24-
50 (2d ed. 1987), an application for intervention as a matter of
right under Rule 24(a) must: (1) be timely; (2) show an interest in
the subject matter of the action; (3) show that the protection of
the interest may be impaired by the disposition of the action; and
(4) show that the interest is not adequately represented by an
existing party. The applicant must satisfy each of the four
criteria to be entitled to intervene as a matter of right. Keith
v. Daley (7th Cir. 1985), 764 F.2d 1265, 1268, &. denied,
(1985), 474 U.S. 980, 106 S.Ct. 383, 88 L.Ed.2d 336.
The District Court's denial of the motion to intervene was
based primarily on its determination that State Farm's motion was
not timely. Timeliness is determined from the particular
circumstances surrounding the action and such a determination is
within the sound discretion of the trial court. NAACP v. New York
(1973), 413 U.S. 345, 366, 93 S.Ct. 2591, 2603, 37 L.Ed.2d 648,
663.
State Farm cites Johnson v. Cape Industries, Limited (Ill.
App. Ct. 1981), 414 N.E.2d 470, in support of its position that it
was entitled to intervene. In Johnson, a personal injury action
was filed against Cape Industries, Limited (Cape), on February 4,
1980. Cape, an English corporation, was sued as the agent and
shareholder of another corporation which was the direct insured.
Both corporations instructed the insurer's counsel not to make an
appearance on Cape's behalf, fearing certain adverse consequences
of an appearance under English law. On March 28, 1980, a default
judgment was entered against Cape and the cause was set for the
presentation of evidence of damages on May 8, 1980. On April 7,
1980, the insurer filed a declaratory judgment action on the
question of insurance coverage and also filed a petition to
intervene in the underlying personal injury action. The trial
court denied the petition to intervene. The appellate court
reversed, ruling that the motion to intervene was timely in view of
the difficulty between Cape and the insurer and the less than two-
month period between the filing of the complaint and the entry of
default.
Johnson is distinguishable from the case at bar. Here, State
Farm's motion to intervene was filed more than fifteen months after
the personal injury action was initiated and only one week before
the date of trial. More critically, State Farm was aware of the
litigation for more than one year before trial. An attorney for
State Farm and a representative of the company were present at the
March 2, 1990 discovery deposition of its insured, Ralph Becktold.
It was aware that John Becktold was being sued, that John Becktold
was related to its insured, that an insurance policy existed which
Schwenke maintained provided coverage for John Becktold, and that
Schwenke was looking to State Farm to pay any judgment. Despite
all of this, State Farm did nothing until one week before trial.
State Farm further argues that its motion was timely because
it was filed shortly after John Becktold's attorney of choice was
permitted to withdraw as counsel, leaving him unrepresented. This
argument might be persuasive if the purpose of State Farm's motion
to intervene was to provide a defense for John Becktold. Such is
not the case here. The motion's only purpose was to delay the
trial in state court until the declaratory judgment action was
finally resolved in the federal courts. We have stated previously
that "[tlhe intervention rule is a discretionary judicial
efficiency rule used to avoid delay, circuity and multiplicity of
suits." Grenfell v. Duffy (1982), 198 Mont. 90, 95, 643 P.2d 1184,
1187. We cannot conclude under the circumstances of this case that
the District Court abused its discretion in finding the motion to
intervene untimely where to allow intervention would have created
that which the intervention rule seeks to avoid---undue delay of
the trial for an undetermined period of time.
Moreover, State Farm sought to intervene based on its
assertion that if insurance coverage exists it should be allowed to
pursue vigorously all available defenses. Interestingly, however,
State Farm justifies its inaction until the week before trial by
asserting that it has never had any duty to defend John Becktold.
In our view, State Farm failed to protect its interest in a timely
fashion after it first became aware of the action. If State Farm
believed it had no duty to defend but desired to protect its
interest, it could have hired an attorney to defend John Becktold
under a reservation of rights, rather than waiting until one week
before trial to move to intervene for the sole purpose of delaying
the trial.
Having determined that State Farm's motion was not timely, it
is unnecessary to consider whether the other requirements for
intervention as a matter of right under Rule 24(a), M.R.Civ.P.,
were satisfied. Accordingly, we hold that the District Court did
not abuse its discretion in denying State Farm's motion to
intervene as a matter of right.
State Farm next contends that the District Court erred in
.
denying permissive intervention under Rule 24 (b), M.R. Civ P. This
rule provides in relevant part:
Permissive intervention. Upon timely application anyone
may be permitted to intervene in an action: . . .(2)
when an applicant's claim or defense and the main action
have a question of law or fact in common. . . .
exercising its discretion the court shall consider
In
whether the intervention will unduly delay or prejudice
the adjudication of the rights of the original parties.
As the language of each subsection of Rule 24, M.R.Civ.P.,
indicates, a motion to intervene must be timely regardless of
whether intervention is sought as of right under 24(a) or by
permission under 24(b). Because we have already concluded that
State Farm's motion to intervene was not timely, State Farm did not
satisfy the threshold prerequisite for permissive intervention. We
h o l d t h a t t h e D i s t r i c t Court d i d n o t abuse i t s d i s c r e t i o n i n
denying S t a t e Farm's motion t o i n t e r v e n e .
Affirmed.
/'
,$?.?-
W e concur:
Chief J u s t i c e
March 3, 1992
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:
K.D. Peterson, Esq.
PETERSON & SCHOFIELD
2906 Third Avenue North
Billings, MT 59101
Christopher Thimsen
Charles A. Murray, Jr.
Attorneys at Law
2812 First Avenue North, Suite 210
Billings, MT 59101
John Carl Becktold
C/O Top Gun
P.O. Box 3072
Roundup, MT 59072
ED SMITH
CLERK OF THE SUPREME COURT
STATE O F MONTANA