Mt. Hawley Insurance v. Sandy Lake Properties, Inc.

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
________________________ September 20, 2005
THOMAS K. KAHN
No. 05-12239 CLERK
Non-Argument Calendar
________________________

D. C. Docket No. 04-01522-CV-ORL-KRS

MT. HAWLEY INSURANCE CO.,
a foreign corporation,
Plaintiff-Appellee,

versus

SANDY LAKE PROPERTIES, INC.,
a dissolved Florida corporation, et al.,
Defendants,

ANDRE RIGAUD, as personal representative
of the Estate of Kendel Rigaud,

Movant-Appellant.

________________________

Appeal from the United States District Court
for the Middle District of Florida
_________________________

(September 20, 2005)
Before BLACK, HULL and PRYOR, Circuit Judges.

PER CURIAM:

Andre Rigaud, as personal representative of the Estate of Kendel Rigaud,

appeals the district court’s denial of his motion to intervene in the declaratory

action that Mt. Hawley Insurance Co. filed against Muria International, Inc. and

Sandy Lake Properties, Inc. After review, we affirm.

I. BACKGROUND

Kendel Rigaud drowned at a property that had been owned and managed by

Muria International and Sandy Lake Properties. Andre Rigaud, as personal

representative of the Estate of Kendel Rigaud, then sued Muria International and

Sandy Lake Properties, who were insured by a Mt. Hawley policy. Subsequently,

Mt. Hawley filed a declaratory action against Muria International and Sandy Lake

Properties. In its declaratory action, Mt. Hawley sought a judgment holding that

Mt. Hawley owed no duty to defend or indemnify Muria International or Sandy

Lake Properties in the wrongful death action brought against them in Florida state

court by Andre Rigaud. Mt. Hawley’s declaratory action asserted that Muria

International’s and Sandy Lake Properties’s refusal to notify Mt. Hawley of the

wrongful death action and refusal to cooperate in their defense against the

wrongful death action had so prejudiced Mt. Hawley that coverage under the Mt.

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Hawley policy had been waived.1 Thus, the declaratory action involved an

insurance coverage dispute.

Muria International and Sandy Lake Properties, both of which are dissolved

Florida corporations, failed to respond to Mt. Hawley’s declaratory judgment

action. Subsequently, Mt. Hawley filed a motion for default judgment against

Muria International and Sandy Lake Properties.

Thereafter, Andre Rigaud, as personal representative of the Estate of Kendel

Rigaud, filed a motion to intervene in the declaratory judgment action. Rigaud

moved to intervene as of right and by permission pursuant to Federal Rules of

Civil Procedure 24(a) & (b).2 Rigaud’s motion argued that, contrary to Mt.

1
Muria International was not actually a named insured on the Mt. Hawley policy. Mt.
Hawley thus argued alternatively that it had no duty to defend Muria International because Muria
International was not covered under the policy. We need not reach this issue to resolve this
appeal.
2
Federal Rules of Civil Procedure 24(a) & (b) provide in relevant part:
(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.
(b) 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. . . . 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.
Fed. R. Civ. P. 24(a) & (b).

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Hawley’s assertions, Muria International and Sandy Lake Properties officials were

cooperating in the defense of the wrongful death suit. Rigaud’s motion also stated

that Rigaud’s counsel had notified Mt. Hawley of the wrongful death suit, and

thus, Mt. Hawley could not be prejudiced by lack of notice.

On April 7, 2005, the district court denied Rigaud’s motion to intervene. As

to intervention as of right, the district court determined that Rigaud failed to assert

a direct, substantial, legally protectable interest in the insurance coverage dispute

that was the subject of the declaratory judgment action. As to permissive

intervention, the district court determined that Rigaud failed to demonstrate a

common question of law or fact between the wrongful death action and Mt.

Hawley’s declaratory judgment action.

The district court then entered a default order and judgment in favor of Mt.

Hawley and against Muria International and Sandy Lake Properties. Rigaud

appeals the district court’s denial of his motion to intervene.3

II. DISCUSSION

A. Intervention as of Right

3
Rigaud also appealed the district court’s entry of a default judgment against Muria
International and Sandy Lake Properties. This Court dismissed Rigaud’s appeal for lack of
jurisdiction. Mt. Hawley Ins. Co. v. Sandy Lake Props., Inc., No. 05-12508 (11th Cir. July 12,
2005).

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 On appeal, Rigaud argues that the district court erred in determining that he

failed to show a direct, substantial, and legally protectable interest for intervention

as of right.4

“Under Rule 24(a)(2), a party is entitled to intervention as a matter of right

if the party’s interest in the subject matter of the litigation is direct, substantial and

legally protectable.” Georgia v. United States Army Corps of Eng’rs, 302 F.3d

1242, 1249 (11th Cir. 2002). “The proposed intervenor must show that it has an

interest in the subject matter of the suit, that its ability to protect that interest may

be impaired by the disposition of the suit, and that existing parties in the suit

cannot adequately protect that interest.” Id. at 1250.

Rigaud argues that he has a direct, substantial, and legally protectable

interest in the subject matter of the declaratory action because if Mt. Hawley owes

neither a defense nor coverage to Muria International or Sandy Lake Properties,

then Rigaud “will not have [a] pool or fund from which to recover his damages.”

We disagree.

This Court has held that a legally protectable interest “is something more

than an economic interest.” United States v. South Fla. Water Mgmt. Dist., 922

4
This Court reviews de novo the district court’s denial of a motion to intervene as of
right. Georgia v. United States Army Corps of Eng’rs, 302 F.3d 1242, 1249 (11th Cir. 2002).

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F.2d 704, 710 (11th Cir. 1991) (quotation marks and citation omitted). “What is

required is that the interest be one which the substantive law recognizes as

belonging to or being owned by the applicant.” Id. (quotation marks and citation

omitted). Thus, a legally protectable interest is an interest that derives from a legal

right.5

In this case, Rigaud’s interest in the subject matter of the declaratory action

is purely economic. Rigaud is not a party to the Mt. Hawley insurance policy and

has no legally protectable interest in that insurance policy. Rigaud fails to cite any

legally protectable interest and states only that there will be less money available

from which he can recover his wrongful death damages if Mt. Hawley is released

from defending and providing coverage to Muria International and Sandy Lake

Properties. Further, Rigaud’s interest is purely speculative because it is contingent

upon his prevailing against Muria International and Sandy Lake Properties in the

wrongful death action.6

5
For example, in South Florida Water Management, 922 F.2d at 708-09, this Court
allowed a group of farming corporations and organizations to intervene as of right to afford the
intervenors an opportunity to participate in the district court’s interpretation of a state regulation.
The farming corporations and organizations had a legal right under the relevant Florida law to
participate in administrative proceedings interpreting the regulation. If the district court had not
allowed intervention, the farming corporations and organizations would have been deprived of
their legal right to participate in the interpretation of the regulation.
6
Although there is no case directly on point from this Court, several district courts from
our circuit have addressed whether an interest contingent upon the outcome of other pending
litigation is a legally protectable interest, and relying on this Court’s decision in South Florida

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 Following our precedent, we conclude that the district court did not err in

determining that Rigaud does not have a legally protectable interest in the subject

matter of the declaratory action. Accordingly, the district court did not err in

denying Rigaud’s motion for intervention as of right.

B. Permissive Intervention

Rigaud next argues that the district court abused its discretion in

determining that there was no common question of law or fact between the

wrongful death action and Mt. Hawley’s declaratory judgment action.7

Water Management, those district courts have decided the issue the same way we do today.
For example, in Ace American Insurance Co. v. Paradise Divers, Inc., 216 F.R.D. 537,
538 (S.D. Fla. 2003), the dispute between the insurer and Paradise Divers was whether the
insurance policy provided coverage to Paradise Divers for liability arising out of work-related
injuries sustained by employee Kevin Upmal. The district court, relying on South Florida Water
Management, determined that Upmal’s interests were both speculative and purely economic.
Specifically, the district court stated: “Here, Upmal’s interests, while certainly not unimportant,
are affected only speculatively, and at that only economically, by the present action. Upmal’s
possessing a stake in this action is contingent on first obtaining a judgment against Paradise
Divers and not based on a legally protected ground.” Id. at 539; see also HealthSouth Corp. Ins.
Litig., 219 F.R.D. 688, 692 (N.D. Ala. 2004) (“Here, Movants’ interest in securing a pool of
insurance money to draw upon is not only purely economic, but also theoretical, considering no
judgments have been obtained against the insureds.”); Midwest Employers Cas. Co. v. East Ala.
Health Care, 170 F.R.D. 195, 198 (M.D. Ala. 1996) (recognizing movant’s interest in insurance
proceeds and in the outcome of the declaratory action, but stating that the interest “does not rise
to the level of a significant interest”). But see TIG Speciality Ins. Co. v. Financial Web.com,
Inc., 208 F.R.D. 336, 338 (M.D. Fla. 2002) (“[I]f this Court declares that the insurance policy is
void in the present suit, a significant source of recovery for the intervenors would become
extinct; therefore, the Court finds that the intervenors have a direct, significant legal interest in
the insurance policy.”).
7
We review for abuse of discretion the district court’s denial of a motion for permissive
intervention. Georgia v. United States Army Corps of Eng’rs, 302 F.3d at 1249.

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 “Permissive intervention under Fed. R. Civ. Proc. 24(b) is appropriate

where a party’s claim or defense and the main action have a question of law or fact

in common and the intervention will not unduly prejudice or delay the

adjudication of the rights of the original parties.” Georgia v. United States Army

Corps of Eng’rs, 302 F.3d at 1250.

The lack of cooperation that Mt. Hawley asserts in the declaratory judgment

action is irrelevant to the issue of fault in the wrongful death action. Specifically,

the primary issue in the declaratory judgment action is whether Mt. Hawley owes

insurance coverage to Muria International and Sandy Lake Properties under the

insurance agreement. The issue of insurance coverage is unrelated to the issue of

fault in the wrongful death action. Further, we do not see how Rigaud’s

intervention will help resolve the issue of whether Muria International and Sandy

Lake Properties are entitled to insurance coverage pursuant to a policy with Mt.

Hawley. Thus, the district court did not abuse its discretion in denying Rigaud’s

motion for permissive intervention.

III. CONCLUSION

For the foregoing reasons, we affirm the district court’s denial of Rigaud’s

motion for intervention.

AFFIRMED.

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