Thursday, October 17, 2019

SCOVT affirms denial of motion to intervene, because -- on de novo review-- the motion was untimely.


State v. Quiros, 2019 VT 68 [Filed October 4, 2019]



CARROLL, J. Intervenors, a group of foreign investors who were allegedly defrauded by defendants, appeal an order denying their motion to intervene in the State's enforcement action brought against defendants. We conclude that, under a de novo standard of review, the intervention was untimely, and because untimeliness is a threshold issue under both Rule 24(a) and (b), we affirm.

Intervenors moved under Vermont Rule of Civil Procedure 24(a) and (b) to intervene in this action. Intervenors sought the "full recovery of any judgment obtained in this action" and the "[d]isgorgement and restitution of all earnings, profits, compensation and benefits." They also sought punitive damages The superior court denied the motion to intervene without reference to its timeliness.

A trial court must grant a motion to intervene as of right if it is (1) timely; (2) the intervenor has "an interest relating to the property or transaction" that is the subject of the underlying action; (3) the intervenor would be impaired or impeded in his or her ability to protect that interest depending on the outcome of the action; and (4) the intervenor's interest is not adequately represented by the existing parties. V.R.C.P. 24(a). Permissive intervention is available if the motion is (1) timely and (2) the prospective intervenor's "claim or defense and the main action have a question of law or fact in common." V.R.C.P. 24(b). Vermont Rule 24 is "substantially identical to Federal Rule [of Civil Procedure] 24" with "minor modifications" that are of no consequence to our analysis here. Reporter's Notes, V.R.C.P. 24.

We review the denial of a motion to intervene as of right de novo. In re GMPSolar-Richmond, LLC, 2017 VT 108, ¶ 19, 206 Vt. 220, 179 A.3d 1232 .

However, we review discretionary decisions of trial courts "under an abuse of discretion standard of review." HSBC Bank USA N.A. v. McAllister, 2018 VT 9, ¶ 8, 206 Vt. 445, 182 A.3d 593. We therefore review the denial of a motion for permissive intervention for an abuse of discretion. Helm. v. Helm, 139 Vt. 225, 227, 424 A.2d 1081, 1082 (1981).

Because the timeliness of a motion to intervene is "a matter within the discretion of the court," normally we review the trial court's ruling on timeliness for an abuse of discretion. Ernst v. Rocky Road, Inc., 141 Vt. 637, 639, 450 A.2d 1159, 1160 (1982).

However, when — as here — a trial court denies a motion to intervene but makes no mention of the motion's timeliness, we are left without a ruling to review for an abuse of discretion. In such a case, if there are sufficient facts to decide the issue of timeliness within the record — and assuming neither party is seeking a remand to establish a disputed issue of material fact — then, in accordance with four federal circuit couts of appeal, we review timeliness de novo.

When a motion to intervene is filed, the timeliness requirement under Rule 24(a) and (b) is a threshold question. NAACP v. New York, 413 U.S. 345, 365 (1973) ("Whether intervention be claimed of right or as permissive, it is at once apparent, from the initial words of [Federal Rule 24] 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.").

An intervenor bears the burden of meeting all of the requirements for intervention, including timeliness. See Wash. Elec. Coop., Inc. v. Mass. Mun. Wholesale Elec. Co., 922 F.2d 92, 96 (2d Cir. 1990). The timeliness of a motion to intervene is assessed using a totality-of-circumstances analysis. Ernst, 141 Vt. at 640, 450 A.2d at 1160.

We have identified four factors that may be considered in assessing timeliness: (1) possible harm to plaintiffs; (2) an intervenor's ability to have sought intervention sooner; (3) the progress of the case; and (4) the availability of other means to join case. Shahi v. Madden, 2010 VT 56, ¶ 10, 188 Vt. 142, 5 A.3d 869.

Here, intervenors did not move for intervention until May 2018, more than two years after the complaint was filed in April 2016. Based on the facts and circumstances of this case, we conclude that intervenors have failed to carry their burden to show that they sought intervention in a timely manner. We therefore affirm.

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