Free Motion to Intervene - District Court of Colorado - Colorado

Case 1:00-cv-01841-LTB-KLM

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 00-cv-01841-LTB-PAC RICKY EUGENE CLARK, on behalf of himself and all others similarly situated, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois Corporation, Defendant

MEMORANDUM IN SUPPORT OF MOTION TO INTERVENE ______________________________________________________________________________

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I.

INTRODUCTION

Pursuant to Fed. R. Civ. P. 24, Roy McIntosh, Florinda Reed, and Matthias Hobza (the "intervenor Plaintiffs") move the Court to intervene as additional named Plaintiffs and putative Class representatives in this action. The intervenor-Plaintiffs are pedestrians (this term includes non-motorists such as bicyclists; see C.R.S. § 10-4-703(9)) who received No-Fault benefits under a Colorado State Farm automobile insurance policy where the governing policy documents at the time of the accident were issued prior to January 1, 1999. Like the proposed Class, the intervenor-Plaintiffs seek reformation of the governing policies, and resultant extended PIP benefits. Accordingly, the intervenor-Plaintiffs seek to join in the existing Complaint. 1 I. STATEMENT OF FACTS

At present, Plaintiff Ricky Eugene Clark is the putative Class representative in this action. This Court adopted State Farm's case management proposal, and determined the effective reformation date for the insurance policy under which Mr. Clark claims benefits prior to its consideration of Class certification. See April 24, 2003 Order. The Court denied Plaintiff's motion for reconsideration of that Order. After Mr. Clark's reformation hearing, this Court (i) set the reformation date for the policy governing Mr. Clark's claims; (ii) set the amount of Mr. Clark's recovery and (iii) certified its ruling for appeal pursuant to Fed. R. Civ. P. 54(b). Clark v. State Farm Mut. Auto. Ins. Co., 292 F. Supp. 2d 1252 (D. Col. 2003). The Tenth Circuit affirmed this Court's ruling in its entirety. Clark v. State Farm Mut. Auto. Ins. Co., 433 F.3d 703, 713 (10th Cir. 2005). Despite the procedural history of this case that was proposed by State Farm and ordered by this Court, and despite the fact that Mr. Clark remains committed to obtaining certification of In compliance with Fed. R. Civ. P. 24(c), the intervenor Plaintiffs hereby incorporate by reference the Class Action Complaint that is already on file with this Court. -1001434-11 167568 V1 1

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his claims, State Farm has recently claimed that Mr. Clark cannot serve as a Class Representative because he lacks standing. See State Farm's Response Brief Regarding Plaintiff's Proposed Amended Class Definition (Dkt. No. 188) at 24-25. Plaintiff has responded to this challenge, 2 and does not believe State Farm will prevail on this issue. Nevertheless, in an abundance of caution, the intervenor Plaintiffs have made themselves available to serve as additional Class representatives. Roy McIntosh was a pedestrian on January 16, 1999, when he was struck by a vehicle operated by intoxicated State Farm-insured Tyson White. Mr. McIntosh suffered serious injuries including but not limited to both of his knees and his back. After the accident State Farm provided Mr. McIntosh a notice of benefits, notifying him he was entitled to receive PIP benefits under Mr. White's automobile insurance policy only to the extent of the "minimum coverages" as defined in C.R.S. § 10-4-706. Mr. McIntosh submitted a PIP application and State Farm subsequently paid him PIP benefits in the amount of approximately $69,000.00 for medical and rehabilitation expenses through January 16, 2004, including knee replacement surgery to both knees and steroid injections to his back. State Farm notified Mr. McIntosh that he is not entitled to receive any additional benefits as of January 16, 2004. Nonetheless, Mr. McIntosh continues to need treatment for his accident-related injuries and continues to incur additional expenses for reasonable and necessary treatment related to the January 16, 1999, accident. Mr. McIntosh has incurred additional unpaid accident-related medical expenses in excess of the "minimum coverages" as defined in C.R.S. § 10-4-706 since January 16, 2004, including expenses related to further surgical treatment for his knee. See Plaintiff's Reply in Support of Plaintiff's Proposed Amended Class Definition (Dkt. No. 192) at 11-12. -2001434-11 167568 V1 2

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Florinda Reed was a pedestrian bicyclist on May 20, 1999, when she was struck by a vehicle operated by State Farm-insured Tho Huynh. Ms. Reed suffered serious injuries including but not limited to her neck, back and shoulders. After the accident State Farm provided Ms. Reed a notice of benefits, notifying her she was entitled to receive PIP benefits under Mr. Huynh's automobile insurance policy only to the extent of State Farm's optional "P3" PIP coverage. Although the notice directed Ms. Reed to Mr. Huynh's policy for an explanation of the benefits available to her, State Farm did not and continues to refuse to provide Ms. Reed a copy of the policy. Ms. Reed does not know Mr. Huynh and has been unable to locate him to request a copy of the policy. Ms. Reed submitted a PIP application and State Farm subsequently paid her PIP benefits in the amount of $150,000.00 for medical and rehabilitation expenses. Once State Farm paid $150,000.00 in benefits, it notified Ms. Reed that she is not entitled to receive any additional benefits. Nonetheless, Ms. Reed has incurred additional expenses for items necessary and related to her May 20, 1999, accident, expenses beyond State Farm's optional "P3" PIP coverage. Ms. Reed has incurred an additional $2,520.00 in unpaid medical expenses. She has incurred approximately $97,000.00 in unpaid work loss expenses. Matthias Hobza was a pedestrian bicyclist on April 27, 1998, when he was injured in a collision involving a vehicle operated by State Farm-insured Barbara Archer. As a result of this accident, Mr. Hobza suffered serious injuries including but not limited to a head wound, knee injuries including a torn meniscus and ligament damage requiring surgical reconstruction and resulting in permanent impairment, and neck and back injuries. After the accident State Farm provided Mr. Hobza a notice of benefits, notifying him he was entitled to receive PIP benefits

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under Ms. Archer's automobile insurance policy only to the extent of the "minimum coverages" as defined in C.R.S. § 10-4-706. Mr. Hobza submitted a PIP application and State Farm subsequently paid him PIP benefits in the amount of some $23,000.00 for medical and rehabilitation expenses, as well as loss of income benefits. Mr. Hobza earned approximately $440 per week prior to the accident, and sustained an unreimbursed loss of income due to his accident-related injuries in the amount of $22,695 through September 2000. State Farm notified Mr. Hobza that he would not be entitled to receive any additional PIP benefits after April 27, 2003. Nonetheless, Mr. Hobza has incurred additional expenses related to his April 27, 1998, accident, expenses beyond the "minimum coverages" as defined in C.R.S. § 10-4-706. According to his orthopedic surgeon, Mr. Hobza will require further surgical reconstruction in the form of a tibial osteotomy and then a total knee arthroplasty. Because his reconstructed knee has prevented him from earning the same level of income after the accident, Mr. Hobza's income decreased approximately $13,400 per year due to his accident-related injuries, and he has incurred well in excess of $25,000.00 in unpaid work loss expenses since September 2000. The standing of the intervenor Plaintiffs cannot be challenged. Accordingly, allowing the intervenor Plaintiffs to serve as Class representatives will insure that the unusual procedural history of this case does not serve to deprive the absent Class members of a remedy to which they are plainly entitled. II. ARGUMENT

Rule 24 is liberally construed in favor of allowing intervention. Elliott Indus. Ltd. P'ship v. BP Am. Prod. Co., 407 F.3d 1091, 1103 (10th Cir. 2005) (citing National Farm Lines v.

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Interstate Commerce Com., 564 F.2d 381, 384 (10th Cir. 1977)). Here, the intervenor Plaintiffs should be permitted to intervene to guarantee that their rights ­ and those of all pedestrians who are entitled to extended PIP benefits from State Farm -- are protected in this putative class action. See ,e.g., Bohne v. Closings of Tulsa, LLC, 2006 U.S. Dist. Lexis 20841 (D. Okla. Apr. 10, 2006) (granting putative class representatives intervention as of right); In re Bridgestone Sec. Litig., 430 F. Supp. 2d 728 (M.D. Tenn. 2006) (same). The proposed intervention here is proper under either Rule 24(a)(2) (Intervention as of Right) or Rule 24(b)(2) (Permissive Intervention). A. Intervention as of Right Intervention of right pursuant to Rule 24(a) is proper if "`(1) the application is timely, (2) the applicant claims an interest relating to the property or transaction which is the subject of the action, (3) the applicant's interest may be impaired or impeded, and (4) the applicant's interest is not adequately represented by existing parties.'" Rathbun v. Qwest Communs. Int'l, Inc., 2006 U.S. Dist. Lexis 12303, at *5 (D. Colo. Mar. 7, 2006) (quoting Elliott Indus. Ltd. P'ship v. BP Am. Prod. Co., 407 F.3d 1091, 1103 (10th Cir. 2005)). 3 There can be little question but that the motion is timely in this case. In assessing timeliness, the focus is not on the length of time that has passed since the filing of suit. United Nuclear Corp. v. Cranford Ins. Co., 905 F.2d 1424, 1427 (10th Cir. 1990). Instead, "[t]he timeliness of a motion to intervene is assessed in light of all the circumstances, including the length of time since the applicant knew of his interest in the case, prejudice to the existing

Rule 24(a)(2) states "(a) Intervention as 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." -5001434-11 167568 V1

3

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parties, prejudice to the applicant, and the existence of any unusual circumstances." Utah Ass'n of Counties v. Clinton, 255 F.3d 1246, 1250 (10th Cir. 2001) (quotation omitted). Here, there is no prejudice to State Farm, since the intervention motion is brought concurrently with the motion for class certification and no new allegations are lodged. The mere fact that State Farm may choose to depose the intervenor Plaintiffs does not unduly prejudice State Farm. See Bohne v. Closings of Tulsa, LLC, 2006 U.S. Dist. Lexis 20841, at *8-9. The purpose for which intervention is sought is proper, as the intervenor Plaintiffs seek to insure that their interests are protected in this litigation. Moreover, the unusual circumstances arising from the procedural posture of this case counsel strongly in favor of allowing the proposed intervention. Because State Farm proposed (and this Court Ordered) that Mr. Clark's reformation claim be adjudicated prior to the Court's consideration of certification, the intervenor Plaintiffs could only have believed that their interests were protected by Mr. Clark and the proposed Class action. Under these circumstances, the Court should reject any claim that the proposed intervention is untimely. See In re Bridgestone Sec. Litig., 430 F. Supp. 2d at 740 (motion to intervene as class representative was timely when it occurred after Sixth Circuit ruled prior lead plaintiff could no longer serve as class representative, and trial Court had not yet considered class certification). Nor can there be any question that the intervenor Plaintiffs have a direct and substantial interest in the case ­ the same interest that all Class members have in policy reformation and the resultant benefits. Likewise, without intervention, the intervenor-Plaintiffs' "interest may be impaired or impeded." Elliott Indus. Ltd. P'ship v. BP Am. Prod. Co., 407 F.3d at 1103. Indeed, if State Farm's "standing" argument were to succeed, then the intervenor Plaintiffs would be without a remedy in this action. Finally, the intervenor Plaintiffs' interests may not be

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"adequately represented by existing parties," since State Farm challenges Mr. Clark's standing on grounds that could not possibly apply to the intervenor Plaintiffs. See Bohne, 2006 U.S. Dist. Lexis 20841, at *10. Accordingly, the motion to intervene should be granted as of right pursuant to Fed. R. Civ. P. 24(a)(2). B. Permissive Intervention Alternatively, in the event the Court finds that intervention of right is inappropriate, permissive intervention should be granted. Pursuant to Fed. R. Civ. P. 24(b)(2), the Court may permit intervention if the motion is "timely," and if the "applicant's claim or defense and the main action have a question of law or fact in common." See also Rathbun, 2006 U.S. Dist. Lexis 12303, at *8. Here, there is no question that the motion is timely. See supra. "[I]ntervention will not unduly delay or prejudice the adjudication of the rights of the original parties." Rathbun, 2006 U.S. Dist. Lexis 12303, at *8. The motion for class certification is being filed herewith, and State Farm will be permitted to depose the intervenor Plaintiffs. The intervenor Plaintiffs do not seek to add any additional claims to those already pled in the existing Complaint. Nor can there be any question that the claims of the intervenor Plaintiffs have questions of law and fact in common with those of the other Plaintiffs. Indeed, they propose to join in the already-existing Complaint. Given that the requirements of Rule 24(b)(2) are met, the intervenor Plaintiffs request that the Court exercise its discretion to allow them to intervene to ensure that the claims of all Class members may be fully resolved in this action.

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III.

CONCLUSION

For the reasons stated above, the intervenor Plaintiffs respectfully request that they be permitted to intervene in this action so that they may serve as Class representatives with respect to the claims asserted in the Plaintiff's Complaint. Respectfully submitted this 14th day of May, 2007. . s/ Robert B. Carey Robert B. Carey Leif Garrison The Carey Law Firm 2301 East Pikes Peak Colorado Springs, CO 80909 Telephone: (719) 635-0377 L. Dan Rector Franklin D. Azar & Associates, P.C. 5536 Library Lane Colorado Springs, CO 80918 Telephone: (719) 527-8000 Andrew M. Volk Hagens Berman Sobol Shapiro LLLP 1301 Fifth Avenue, Suite 2900 Seattle, WA 98101 Telephone: (206) 623-7292 Attorneys for Plaintiff and proposed intervenor Plaintiffs

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CERTIFICATE OF SERVICE (CM/ECF) I hereby certify that on this 14th day of May, 2007, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following email addresses: [email protected] [email protected] s/Robert B. Carey Robert B. Carey Leif Garrison The Carey Law Firm 2301 East Pikes Peak Colorado Springs, CO 80909 Telephone: (719) 635-0377

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