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 ORDER

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UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT TACOMA

PHILADELPHIA INDEMNITY

INSURANCE COMPANY,

 Plaintiff,

v.

BUSINESS COMPUTER TRAINING

INSTITUTE, INC.; THOMAS JONEZ and

FAYE JONEZ; MORRIE PIGOTT and

LINDA PIGOTT

Defendants.

Case No. C05-5706 RBL

ORDER DENYING APPLICANTS’

MOTION TO INTERVENE

I. INTRODUCTION AND CONCLUSION

This matter comes before the Court on a motion to intervene by non-parties Kari L. Westfall,

Shaun Marolf, Jay Poe, Tony Nguyen and Janet Newton (the “Applicants”). (Dkt. No. 16). Having

reviewed the parties’ submissions and determining that oral argument is not necessary for the disposition of

this motion, the Court hereby DENIES Applicants’ motion. The reasons for the Court’s order are set forth

below.

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 ORDER

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II. BACKGROUND

On June 29, 2005, Business Computer Training Institute, Inc. (“BCTI”) was named as a defendant

in an Oregon class action. In that class action, plaintiff students alleged BCTI breached its contract by

failing to provide promised graduation placement services. 

On October 26, 2005, Plaintiff Philadelphia Indemnity Insurance Company filed this declaratory

judgment against BCTI, seeking a declaration that its insurance policy does not cover BCTI’s alleged

breach of contract in the Oregon class action.

Applicants apparently have claims similar to the Oregon plaintiffs and, on May 10, 2005, filed in

Pierce County Superior Court a complaint against BCTI asserting claims arising from BCTI’s “alleged

actions and omission.” Pierce County Superior Court Judge Thomas P. Larkin entered a $300,000 Writ of

Attachment in the Applicants’ favor. Judge Larkin then certified three separate classes based on each

student’s enrollment period. According to Applicants, BCTI claims it has insufficient assets to satisfy a

judgment or pay for their defense.

Applicants’ counsel attempted unsuccessfully to obtain details about the pending declaratory

judgment action between Philadelphia and BCTI. As a result, on September 8, 2006, Applicants filed this

motion to intervene.

III. DISCUSSION 

A. Intervention as of Right

To intervene as a matter of right under Fed. R. Civ. P. 24(a), four requirements must be met: (1)

the motion must be timely; (2) the applicant must claim a significantly protectable legal interest relating to

the property or transaction which is the subject of the action; (3) the applicant must be so situated that the

disposition of the action may, as a practical matter, impair or impede its ability to protect that interest; and

(4) the applicant’s interest must be inadequately represented by the parties to the action. Sierra Club v.

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1 See, e.g., Alisal Water, 370 F.2d at 920 (prospective collectabiity 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 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); 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.”)

 ORDER

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United States EPA, 995 F.2d 1478, 1481 (9th Cir. 1993) (citations omitted). 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); Donnelly v.

Glickman, 159 F.3d 405, 409 (9th Cir. 1998).

1. Significant Protectable Interest

Applicants argue intervention as of right is appropriate because not only do they have an interest in

maximizing available insurance, but also they have an interest in BCTI’s assets as a result of the $300,000

Writ of Attachment order. (Dkt. No. 16 at 7). Philadelphia responds Applicants lack a significant

protectable interest because they only have a contingent economic interest in the underlying coverage

limitation dispute. (Dkt. No. 19 at 6).

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) (citations

omitted). The Ninth Circuit has made clear, however, that pure economic expectancy is not a legally

protected interest for purposes of intervention.1

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 ORDER

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Here, Applicants fail to allege any interest in the underlying coverage limitation dispute between

Philadelphia and BCTI other than pure economic expectancy. It is true that, in a separate state action,

Applicants attained a $300,000 Writ of Attachment against BCTI. (Dkt. No. 16 at 7). It is also true that

Judge Larkin stated “it [is] likely that the plaintiffs in this case will prevail on some, if not all, of their

claims.” Id. A Writ of Attachment, however, is not a judgment. Accordingly, Applicants’ economic

interest in the underlying coverage limitation dispute is speculative because it hinges upon obtaining a state

court judgment against BCTI. 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 matter of the action”) (citations omitted).

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 gives 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.” See Alisal Water Corp., 370 F.3d at 919. Hawaii-Pacific’s reasoning is applicable here

because Applicants’ sole interest in the present case is in the prospective collectability of a judgment. 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.”). 

Because Applicants’ interest in the present case is not only purely economic, but also theoretical,

Applicants lack a significantly protectable interest. And because Applicants lack a significantly protectable

legal interest, it is unnecessary to consider the remaining prongs of Rule 24(a)(2). See Portland Audubon

Soc’y v. Hodel, 866 F.2d 302 (9th Cir. 1989), cert denied, 492 U.S. 911 (1989) (citations omitted). 

B. Permissive Intervention

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Applicants alternatively argue permissive intervention is appropriate because, inter alia, they are in

the best position to explain the underlying lawsuit. (Dkt. No. 16 at 11). Philadelphia responds that the

separate certified classes in the state court action reinforces the lack of commonality between Applicants

and the underlying lawsuit. (Dkt. No. 19 at 10).

Permissive intervention under Fed. R. Civ. P. 24(b) 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 applicants’ claim or defense and the main action. League of United Latin

American Citizens v. Wilson, 131 F.3d 1297, 1308 (9th Cir. 1997). To intervene under Rule 24(b)(2), the

applicant need not have any direct or pecuniary interest in the subject of the litigation. Kootenai Tribe of

Idaho v. Veneman, 313 F.3d 1094, 1108 (9th Cir. 2002). Even if Rule 24(b)(2)’s requirements are

satisfied, however, 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 applicants’ 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 Applicants’ state class action suit against BCTI

and the declaratory judgment action between Philadelphia and BCTI. The facts and law at issue in the

present action involve whether Philadelphia must cover BCTI for the separate claims brought by the

Oregon class action plaintiffs. Thus, while the underlying action takes root in BCTI’s “alleged actions and

omission,” the declaratory judgment action depends on interpreting the coverage limitations contained in

BCTI’s insurance policy; the instant case has nothing to do with whether and how Applicants were

affected by BCTI’s “alleged actions and omission.” Because Applicants lack a common question of law or

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fact between their state court class action and the underlying coverage limitation dispute, permissive

intervention is inappropriate.

IV. CONCLUSION AND ORDER 

 For the reasons discussed above, the Court DENIES Applicants’ Motion to Intervene. (Dkt. No.

16).

DATED this 10th day of October, 2006. 

 A

RONALD B. LEIGHTON

UNITED STATES DISTRICT JUDGE

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