Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_05-cv-02924/USCOURTS-azd-2_05-cv-02924-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:2201 Declaratory Judgment (Insurance)

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

The Medical Protective Company, 

Plaintiff, 

vs.

Herman Pang, M..D., and Does I-X,

Defendants.

)

)

)

)

)

)

)

)

)

)

)

)

No. CV 05-2924-PHX-SMM

ORDER

On September 21, 2005, The Medical Protective Company (“Medical Protective”)

filed this lawsuit for rescission and declaratory relief against Herman Pang, M.D. (“Dr.

Pang”), a physician to whom Medical Protective has issued a policy of professional liability

insurance. (Dkt. 1.) Kymberli K. Williamson (“Williamson”) is a former patient of Dr. Pang

who has filed a medical malpractice lawsuit against him in Maricopa County Superior Court.

Williamson’s malpractice action has not yet been litigated to judgment. After Medical

Protective filed this lawsuit against Dr. Pang, he filed a Rule 12(b)(7) Motion for Failure to

join Williamson under Rule 19 (Dkt. 9). Shortly thereafter, Williamson filed a Motion to

Intervene. (Dkt.14.) After considering the arguments raised by both parties and Williamson,

the Court now issues the following ruling. 

BACKGROUND

On December 3, 2001, Dr. Pang performed an aortic valve replacement procedure on

Williamson at John C. Lincoln Hospital in Phoenix (“Lincoln Hospital”). (Dkt. 1, ¶8.) The

Case 2:05-cv-02924-JAT Document 20 Filed 06/05/06 Page 1 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

 1 Dr. Pang contends he requested increased coverage limits on March 14, 2002. (Dkt. 13 at 2.)

This factual difference is immaterial to the instant motions.

 2 Trial is currently scheduled to begin on August 1, 2006. See CV-2002-014646, Minute Entry

of 2/13/06.

- 2 -

next day, Williamson suffered complications that resulted in a different physician replacing

the valve Dr. Pang had inserted with a smaller valve. (Id.). Williamson was subsequently

diagnosed with multiple septic emboli in her digits, and is alleged to have suffered multiple

strokes and complications, including the loss of several fingers and toes, peripheral vision,

and her short-term memory. (Id.)

When Dr. Pang performed the valve replacement on Williamson, he was operating

under a medical malpractice policy issued by Medical Protective. (Id., ¶7.) The policy

provided malpractice coverage with liability limits of $1 million per claim and $3 million in

the aggregate for the term July 17, 2001 through July 17, 2002 (the “First Policy”). (Id.)

On March 18, 2002 and May 22, 2002, Lincoln Hospital allegedly received records

requests from counsel representing Williamson. (Id., ¶9.) 

Medical Protective alleges that on June 10, 2002, Dr. Pang applied for an increase in

his liability coverage limits retroactive to March 14, 2002. (Id., ¶10.)1

 In response to the

question whether Dr. Pang had knowledge of any claims, potential claims, or suits in which

he may become involved but had not yet reported to Medical Protective, Dr. Pang replied,

“No.” (Id.) Medical Protective alleges that, in reliance on Dr. Pang’s representation, it

accepted his request and increased coverage limits to $5 million per claim and $5 million in

the aggregate retroactive to March 14, 2002 (the “Second Policy”). (Id.) 

On July 25, 2002, Williamson filed a medical malpractice suit against Dr. Pang,

Lincoln Hospital, and the manufacturer of the original valve (Medtronic) in Maricopa County

Superior Court. (Id., ¶11.)2

On August 29, 2002, Dr. Pang reported service of Williamson’s lawsuit to Medical

Protective. (Id., ¶12.) 

Case 2:05-cv-02924-JAT Document 20 Filed 06/05/06 Page 2 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

 3 Pursuant to Fed.R.Civ.P. 24(c), Williamson has filed both an Answer and a Counterclaim in

this action. See Dkt. 15.

- 3 -

On June 12, 2003, Dr. Pang requested Medical Protective to decrease his liability

coverage limits to $1 million per claim and $3 million in the aggregate, effective July 17,

2003, the renewal date of the policy. (Id., ¶13.) 

Medical Protective seeks a declaration of the invalidity of the increased limits of the

Second Policy issued to Dr. Pang. (Id., ¶¶28-34.) Medical Protective alleges that the

coverage limits set forth in the Second Policy are void because Dr. Pang’s representations

in the application for increased coverage were false and failed to accurately disclose his

knowledge of Williamson’s claim. (Id., ¶¶18-27.) Medical Protective’s rescission claim

does not seek to void the Second Policy in its entirety; it seeks to restore coverage limits to

the amounts contained in the First Policy.

DISCUSSION

Williamson seeks to intervene as of right in this action on the grounds that Medical

Protective’s obligations under the current Second Policy ($5 million per claim) and her right

to recover for Dr. Pang’s malpractice could be eliminated in this action by the claims alleged

against Dr. Pang. (Dkts. 14-15.)3

 Dr. Pang’s Rule 19 Motion contends Williamson must be

added to this action as a defendant because she is a necessary party and can feasibly be

joined under Rule 19(a)(2)(i). (Dkt. 9 at 2-4.) 

A. Motion to Intervene as of Right

Federal Rule of Civil Procedure 24(a)(2) provides for intervention of right, and states:

Upon timely application anyone shall be permitted to intervene

in an action . . . 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.

In the absence of a statute conferring an unconditional right to intervene, the applicant must

demonstrate that: (1) the application is timely; (2) the applicant has a “significantly

Case 2:05-cv-02924-JAT Document 20 Filed 06/05/06 Page 3 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 4 -

protectable” interest relating to the transaction or property that is the subject of the litigation;

(3) 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 its interest; and (4) the applicant’s interests

are inadequately represented by the existing parties. League of United Latin Am. Citizens

v. Wilson, 131 F.3d 1297, 1302 (9th Cir. 1997) (Wilson). Although the party seeking to

intervene bears the burden of establishing all four elements, the Ninth Circuit construes these

factors liberally in favor of the applicant, and review is guided by practical and equitable

considerations, rather than technical distinctions. See United States v. Alisal Water Corp.,

370 F.3d 915, 919 (9th Cir. 2004); Southwest Center for Biological Diversity v. Berg, 268

F.3d 810, 818 (9th Cir. 2001) (Biological Diversity); Donnelly v. Glickman, 159 F.3d 405,

409 (9th Cir. 1998).

Williamson Lacks a Significant Protectable Interest

Medical Protective argues that Williamson may not intervene as of right in this action

because she has only a contingent economic interest in the coverage limitation issue, and thus

lacks a significant protectable interest in the subject of this action. See Dkt. 18 at 4-10. For

several reasons, the Court agrees.

 Under Rule 24(a)(2), an applicant for intervention must claim an interest related to

the property or transaction that is the subject of the action. The United States Supreme Court

has interpreted this requirement to mean that the applicant must have a “significantly

protectable interest.” Donaldson v. United States, 400 U.S. 517, 531 (1971), superceded by

statute on other grounds as stated in United States v. New York Tel. Co., 644 F.2d 953, 956

(2d Cir. 1981). Circuit courts have applied different standards in determining whether a

“significantly protectable interest” exists.

 In the Ninth Circuit, “[t]he requirement of a significantly protectable interest is

generally satisfied when ‘the interest is protectable under some law, and . . . there is a

relationship between the legally protected interest and the claims at issue.’” Arakaki v.

Cayetano, 324 F.3d 1078, 1084 (9th Cir. 2003) (quoting Sierra Club v. EPA, 995 F.2d 1478,

Case 2:05-cv-02924-JAT Document 20 Filed 06/05/06 Page 4 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 5 -

1484 (9th Cir. 1993)). In accordance with this standard, the Ninth Circuit has allowed

intervention based upon such “legally protected interests” as contractual rights and federal

pollution permits. See, e.g., Biological Diversity, 268 F.3d at 820 (a bare expectation is not

a strong enough economic interest to justify intervention as of right but “[c]ontract rights are

traditionally protectable interests”); Sierra Club, 995 F.2d at 1482-83 (finding Clean Water

Act pollution permits to be significant protectable interests); Forest Conservation Council

v. United States Forest Serv., 66 F.3d 1489, 1497 (9th Cir. 1995) (finding legal duty to

maintain state lands adjacent to national forests sufficient protectable interests).

The Ninth Circuit has made clear, however, that pure economic expectancy is not a

legally protected interest for purposes of intervention. See, e.g., Alisal Water, 370 F.3d at

920 (prospective collectability of debt insufficient interest that does not give rise to a right

of intervention); So. Cal. Edison Co. v. Lynch, 307 F.3d 794, 803 (9th Cir. 2002) (applicants’

“contingent, unsecured claim against a third-party debtor” fell “far short of the ‘direct,

non-contingent, substantial and legally protectable’ interest required for intervention as a

matter of right.”) (citations omitted); Greene v. United States, 996 F.2d 973, 976 (9th Cir.

1993) (“movant must demonstrate a ‘significantly protectable interest.’ An economic stake

in the outcome of the litigation, even if significant, is not enough.”) (citations omitted).

Here, Williamson alleges that she “has an interest in the amount of coverage available

to settle her claim against Dr. Pang and for indemnification of any judgment in the

underlying lawsuit.” (Dkt. 14 at 3.) Unfortunately for Williamson, she has failed to allege

any interest at stake in the coverage limitation dispute between Medical Protective and Dr.

Pang other than a pure economic expectancy. Moreover, Williamson’s economic interest in

the present case is speculative, because it hinges upon the opinions of the jury she will face

in state court, who will decide whether Dr. Pang committed medical malpractice and, if so,

how much money Williamson is entitled to recover. See Alisal Water Corp.,370 F.3d at

919-20 (a “non-speculative, economic interest may be sufficient to support a right of

intervention” but economic interest must be “concrete and related to the underlying subject

Case 2:05-cv-02924-JAT Document 20 Filed 06/05/06 Page 5 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 6 -

matter of the action”) (citing Arakaki, 324 F.3d at 1088). In addition, Williamson has failed

to describe how her interest in the policy limits is legally protected, and has not cited any

precedents that treat the kind of economic expectancy at issue here as a property right.

In a similar case, Hawaii-Pacific Venture Capital Corp. v. H.B. Rothbard, 564 F.2d

1343, 1346 (9th Cir. 1977), the Ninth Circuit held that the impaired ability to collect

judgments that may arise from future claims does not give rise to a right of intervention.

Indeed, “[t]o hold otherwise would create an open invitation for virtually any creditor of a

defendant to intervene in a lawsuit where damages might be awarded.” Alisal Water Corp.,

370 F.3d at 919. The underlying reasoning of Hawaii-Pacific is directly applicable here

because Williamson’s sole interest in the present case is in the prospective collectability of

a judgment that she has not yet been awarded. See Glyn v. Roy Al Boat Mgmt. Corp., 897

F.Supp. 451, 453 (D.Haw. 1995) (“Were this court to agree that [a lienholder] could

intervene . . . it would transform every civil suit before this court into a kind of exaggerated

interpleader action where all potential creditors of all parties could assert their rights.”). 

Similarly, in Portland Audubon Soc’y v. Hodel, 866 F.2d 302 (9th Cir. 1989), the

Ninth Circuit held that timber industry representatives did not have a significant protectable

interest to warrant intervention in the Audubon Society’s action that sought to enjoin all

timber sales pending preparation of an environmental impact report. Id. at 304, 309. The

loggers in Portland Audubon lacked a legally protectable interest because they did not have

any existing legal right, contract, or permits relating to the future timber sales that the

Audubon Society sought to enjoin. See Sierra Club, 995 F.2d at 1482 (because the loggers

in Portland Audubon did not have existing contracts for timber sales that were subject to

injunction they had asserted “an economic interest based upon a bare expectation, not

anything in the nature of real or personal property, contracts, or permits”). The potential

financial loss therefore was purely speculative. Cf. Sierra Club, 995 F.2d at 1482 (existence

of vested interest in pollution-discharge permits that had already issued distinguishes case

from Portland Audubon Society and merits intervention).

Case 2:05-cv-02924-JAT Document 20 Filed 06/05/06 Page 6 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 7 -

Williamson’s interest in the outcome of the instant case is similar to the timber

industry representatives’ interest in Portland Audobon. Her economic interest is based upon

an uncertain expectation that she will acquire a judgment against Dr. Pang in excess of $1

million in her medical malpractice lawsuit. Because Williamson does not currently hold a

judgment against Dr. Pang, her interest in securing $5 million insurance money to draw upon

is not only purely economic, but also theoretical. An interest of this nature is “based upon

a bare expectation,” and therefore fails to satisfy the Ninth Circuit’s mandate regarding Rule

24(a) intervention. Portland Audobon, 866 F.2d at 309. 

Unfortunately, neither the parties nor Williamson have pointed to any Ninth Circuit

decisions involving a motion to intervene by a prospective judgment holder in a lawsuit

seeking to determine coverage limits. Nor has the Court found any Ninth Circuit authority

directly on point. Other circuits have, however, spoken to the issue. In Liberty Mutual Ins.

Co. v. Treesdale, Inc., 419 F.3d 216 (3d Cir. 2005), persons who were allegedly injured from

exposure to the insured’s asbestos-containing products sought to intervene in an insurance

coverage declaratory judgment action between the insured and its insurer on the grounds that

their right to recovery for the asbestos-related injuries could be eliminated in that action. Id.

at 219. The district court denied the applicants’ motion to intervene based on its conclusion

that they did not have a sufficient interest in the litigation. Id. at 220. Relying on Third

Circuit jurisprudence that a lawsuit’s potential to “impede a third party’s ability to recover

in a separate suit ordinarily does not give the third party a right to intervene,” the Court of

Appeals affirmed. Id. at 223. The Court ruled that “a mere economic interest in the outcome

of litigation is insufficient to support a motion to intervene.” Id. at 224. The Court

determined that the applicants were attempting to put “the proverbial cart before the

proverbial horse” because they had “neither settled their claims against [the insured] nor

obtained a judgment,” and thus were still required to prove the merits of their underlying

personal injury case. Id. Because the declaratory judgment action may have – at most –

impacted the applicants’ ability to collect any judgment obtained in their personal injury

Case 2:05-cv-02924-JAT Document 20 Filed 06/05/06 Page 7 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 8 -

action, the applicants failed to establish a sufficient interest to intervene as of right. Id. at

227. The Third Circuit’s decision in Liberty Mutual Ins. is persuasive, and therefore

requires denial of Williamson’s motion to intervene. 

Williamson relies principally on TIG Specialty Ins. Co. v. Fin. Web.com, Inc., 208

F.R.D. 336 (M.D.Fla. 2002), to show that her interest in the instant case is sufficient to

justify intervention. See Dkts. 14 at 5; 19 at 4 n.1. While TIG initially appears to address

whether an intervenor’s interest in a defendant’s insurance policy proceeds qualifies as a

“legally protectable” interest under Rule 24(a), it was decided against the weight of Ninth

Circuit precedent. Specifically, although the TIG court cited the principles of intervention

stated above, it failed to recognize the additional tenet that a mere economic interest in the

proceedings is insufficient to support intervention. See TIG Specialty Ins. Co., 208 F.R.D.

at 338 (relying on Mountain Top Condominium Association v. Dave Stabbert Master

Builder, Incorporated, 72 F.3d 361 (3d Cir. 1995), to hold that economic interest in specific

monetary fund sufficient to support a motion to intervene). Moreover, TIG is distinguishable

because it involved a specific monetary fund. Id. Here, by contrast, Williamson has no

property interest in Medical Protective’s policy, nor does she have any other legally

protectable interest in the policies. Rather, she has the kind of economic interest in the

insurance proceeds that the Ninth Circuit has held does not support intervention of right.

The Court also rejects Williamson’s argument that her interest in the present case is

exactly the same as the economic interest of Medical Protective: “to determine whether $1

million or $5 million is available to settle her claim against Dr. Pang and, if the claim is not

settled, to indemnify for any judgment in the malpractice action.” (Dkt. 19 at 1.) The key

distinction between Medical Protective and Williamson is that the former has a contract with

Dr. Pang and, as a result, a contractual right to determine the extent of its obligation under

the Second Policy. Williamson has no contractual relationship with Dr. Pang or Medical

Protective, and she lacks any legally protectable interest that would be directly altered by the

instant case. Rather, any impact on Williamson will be collateral. Therefore, the Court

Case 2:05-cv-02924-JAT Document 20 Filed 06/05/06 Page 8 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

 4 Because Williamson has not established a sufficient interest to intervene as of right, the

Court need not proceed to the timing, impairment, or adequate representation prongs of the analysis.

- 9 -

rejects Williamson’s argument that her answer and counterclaim present “a justiciable

controversy over which this Court can and should take jurisdiction” (dkt. 19 at 2-4). 

Williamson does not have a significantly protectable interest in the subject matter of

this case. She has therefore failed to satisfy a prerequisite to intervention as of right. 4

B. Permissive Intervention

In the alternative, Williamson seeks permissive intervention under Fed.R.Civ.P.

24(b)(2). Permissive intervention may be granted where the applicant demonstrates 

(1) independent grounds for jurisdiction; (2) the motion is timely; and (3) a common question

of law or fact exists between the applicant’s claim or defense and the main action. Wilson,

131 F.3d at 1308. To intervene under Rule 24(b)(2), the applicant need not have any direct

personal or pecuniary interest in the subject of the litigation. Kootenai Tribe of Idaho v.

Veneman, 313 F.3d 1094, 1108 (9th Cir. 2002). However, even if the 24(b)(2) requirements

are satisfied, the court has discretion to deny intervention, considering such factors as

whether the intervention would unduly delay the action or unfairly prejudice existing parties.

Donnelly, 159 F.3d at 412. In addition, the court should consider whether the applicant’s

interest is adequately represented by the existing parties. State of California v. Tahoe

Regional Planning Agency, 792 F.2d 775, 779 (9th Cir. 1986). 

No common questions of law or fact exist between Williamson’s personal injury

action against Dr. Pang and the declaratory judgment/rescission action between Medical

Protective and Dr. Pang. The facts and law at issue in the present action involve whether

Medical Protective is responsible to cover Dr. Pang under the limits stated in the Second

Policy. While this claim obviously takes root in Dr. Pang’s surgery on Williamson, the

declaratory judgment/rescission action depends on the validity of the coverage limitations

contained in the Second Policy; the instant case has nothing to do with whether Dr. Pang

committed malpractice against Williamson. Similarly, Williamson’s medical malpractice

Case 2:05-cv-02924-JAT Document 20 Filed 06/05/06 Page 9 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 10 -

action has nothing to do with determining whether the $5 million coverage limits in the

Second Policy are void. Thus, Williamson’s participation in the instant case would not add

any further clarity or insight into the declaratory judgment/rescission claim at issue here.

Moreover, Williamson’s participation in this litigation is not necessary because Dr.

Pang is capable of adequately representing her interests. Like Williamson, Dr. Pang seeks

to demonstrate that the Second Policy’s $5 million coverage limits are valid. Therefore,

intervention would be redundant and would impair the efficiency of the litigation. See

California, (denying permissive intervention because applicant’s interests adequately

represented by existing parties so permitting applicant to intervene would be redundant and

impair efficiency of litigation). Williamson contends Dr. Pang will not adequately represent

her interests because she “has agreed to settle for the policy limit, [so] he has little reason to

invest his own time and money in this action.” (Dkt. 14 at 6.) The Court disagrees. 

Williamson’s medical malpractice allegations are asserted against Dr. Pang. If

Williamson’s damages exceed $1 million, as she claims, and the Court finds the Second

Policy provides coverage of $1 million, Dr. Pang will be personally liable to Williamson for

the excess amount. Thus, regardless of Williamson’s contention that she will settle for policy

limits, Dr. Pang will adequately represent her belief that the Second Policy provides coverage

of $5 million in order to avoid personal exposure. See In re Healthsouth Corp. Ins. Lit., 219

F.R.D. 688, 693 (N.D. Ala. 2004) (in rescission action, injured tort plaintiff and insureds

have “identical interests”– “to ensure that the coverages are not rescinded and that the

policies provide coverage for any losses” plaintiff and insureds claim may be covered).

Therefore, Williamson’s motion for permissive intervention will be denied. 

C. Dr. Pang’s Rule 19 Motion

Dr. Pang has filed a motion under Fed.R.Civ.P. 19(a)(2)(i) to join Williamson as a

party defendant on the grounds that she “is a person needed for just adjudication of Medical

Protective’s action in this Court.” (Dkt. 9 at 2.) 

Case 2:05-cv-02924-JAT Document 20 Filed 06/05/06 Page 10 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 11 -

Rule 19 provides for the mandatory joinder of parties “needed for a just adjudication,”

commonly referred to as “necessary” parties. Fed.R.Civ.P. 19. In the Ninth Circuit, a

two-pronged analysis is used to determine whether a non-party is necessary under Rule 19(a).

Yellowstone County v. Pease, 96 F.3d 1169, 1172 (9th Cir. 1996). If a non-party satisfies

either of the two prongs, the non-party is necessary. Id. First, the Court determines whether

“complete relief” is possible among those already parties to the suit. Makah Indian Tribe v.

Verity, 910 F.2d 555, 558 (9th Cir. 1990). Second, the Court decides whether the non-party

has a “legally protected interest in the suit.” Id. The inquiry under Rule 19 is “a practical

one and fact specific.” Washington v. Daley, 173 F.3d 1158, 1165 (9th Cir. 1999). Thus,

the question of whether to require the joinder of additional parties under Rule 19 must be

made in light of the particular circumstances of each case. Northern Alaska Environmental

Ctr. v. Hodel, 803 F.2d 466, 468 (9th Cir. 1986).

Dr. Pang does not argue that complete relief cannot be afforded without joining

Williamson. Instead, he contends, “[a]s a personal injury/medical claim plaintiff against

[him], Kymberli Williamson is a person who has an interest relating to the limits of [his]

professional liability insurance policy such that her absence from this action may as a

practical matter impair or impede her own ability to protect her interest.” (Dkt. 9 at 3.)

Thus, the relevant inquiry here is whether Williamson has a legally protected interest in the

subject of the action. See Fed.R.Civ.P. 19(a)(2); Makah Indian Tribe, 910 F.2d at 558

(citation omitted). If a legally protected interest exists, the Court must then determine

whether that interest will be impaired by the suit. To support joinder as a necessary party,

the absent party’s interest in the subject of the action must be more than a financial stake, and

more than speculation about a future event. Makah Indian Tribe, 910 F.2d at 558.

Williamson’s interest in the subject of this action is purely financial in nature –

whether she will be able to recover in excess of $1 million from Dr. Pang if she is able to

recover a judgment against him – and revolves around future speculation. Therefore, as

previously discussed, supra at 4-9, Williamson does not have a legally protected interest in

Case 2:05-cv-02924-JAT Document 20 Filed 06/05/06 Page 11 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 12 -

the instant case. See Disabled Rights Action Committee v. Las Vegas Events, Inc., 375 F.3d

861, 883 (9th Cir. 2004) (a financial stake in the outcome of litigation is not a legally

protected interest giving rise to necessity warranting joinder); McLaughlin v. International

Ass’n of Machinists, 847 F.2d 620, 621 (9th Cir. 1988) ( “Speculation about the occurrence

of a future event ordinarily does not render all parties potentially affected by that future event

necessary or indispensable parties under Rule 19.”); Northern Alaska Envtl. Center, 803 F.2d

at 468; Northrop Corp. v. McDonnell Douglas Corp., 705 F.2d 1030, 1046 (9th Cir. 1983)

(holding that speculation about occurrence of future event does not render all parties

potentially affected by that future event necessary or indispensable parties). 

Dr. Pang argues that Williamson has a legally protected interest in the present case

because both Arizona law and the Medical Protective policy provide her the right “to sue

Medical Protective after securing a judgment ‘to recover under the terms of this policy in the

same manner and to the same extent as the insured.’” (Dkt. 13 at 5.) The Court rejects Dr.

Pang’s argument because, as he concedes, neither of these rights is triggered unless

Williamson first obtains a judgment against Dr. Pang and that bridge has not yet been

crossed. See Sandoval v. Chenowith, 102 Ariz. 241, 245 (1967) (“after recovering a

judgment against an insured under a liability policy, the injured third person may collect such

judgment by instituting garnishment proceedings against the liability insurer”); Dkt. 13, Ex.

F at ¶5 (“No action shall be maintained against the Company to recover a loss covered by this

policy unless brought after the amount of such loss shall have been fixed . . . by a final

judgment against the Insured.”). Because Williamson has not yet obtained a judgment

against Dr. Pang, and, indeed, at this point it is uncertain whether she will be able to do so,

she has no legally protected interest in the present action. 

D. No Attorneys’ Fees are Warranted

In one sentence of its opposition, Medical Protective requests an award of attorney's

fees it incurred in responding to Williamson’s motion to intervene. (Dkt. 18 at 15.) This

request is rejected for two reasons.

Case 2:05-cv-02924-JAT Document 20 Filed 06/05/06 Page 12 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 13 -

First, Medical Protective has not filed a separate motion for sanctions pursuant to Rule

11. See Fed.R.Civ.P. 11(c)(1)(A). Thus, to request fees pursuant to Rule 11 at this time is

inappropriate. 

Second, Rule 11 of the Federal Rules of Civil Procedure is violated when an attorney

or unrepresented party “present[s] to the court (whether by signing, filing, submitting, or later

advocating) a pleading, written motion, or other paper” for an improper purpose, such as to

harass or to cause unnecessary delay. Fed.R.Civ.P. 11(b)(1). Medical Protective has failed

to demonstrate any facts supporting its conclusory assertion that Williamson’s motion to

intervene was filed for an improper purpose. See Townsend v. Holman Consulting Corp.,

929 F.2d 1358, 1362 (9th Cir. 1990) (an award of sanctions under Rule 11 requires a finding

of objective impropriety).

Accordingly,

IT IS HEREBY ORDERED DENYING Kymberli Williamson’s Motion to

Intervene. (Dkt. 14.) 

IT IS FURTHER ORDERED that the Clerk of Court shall strike Kymberli

Williamson’s Answer to the Complaint and Counterclaim (Dkt. 15).

IT IS FURTHER ORDERED DENYING Dr. Pang’s Rule 12(b)(7) Motion for

Failure of Plaintiff to Join a Party Under Rule 19. (Dkt. 9.)

IT IS FURTHER ORDERED DENYING Medical Protective’s request for an award

of attorneys’ fees.

DATED this 1st day of June, 2006.

Case 2:05-cv-02924-JAT Document 20 Filed 06/05/06 Page 13 of 13