IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

GENERAL REFRACTORIES COMPANY : CIVIL ACTION

:

v. :

:

FIRST STATE INSURANCE CO., et al. : No. 04-3509

(Granite State Insurance Company :

Applicant for Intervention ) :

MEMORANDUM

Ludwig, J. January 27, 2012

Citing Federal Rule of Civil Procedure 24(a) and (b), Granite State Insurance

Company applies to intervene as of right or by permission (doc. no. 389). Jurisdiction is

diversity. 28 U.S.C. § 1332.

In this litigation, Plaintiff General Refractories Company (GRC), a manufacturer and

supplier of asbestos-containing products, sues its insurance carriers for a declaration of

excess insurance coverage for underlying asbestos-related claims. GRC is a defendant in

numerous asbestos-related suits throughout the United States. Two of those insurance

carriers are Lexington Insurance Company and AIU Insurance Company.

On July 23, 2004, GRC filed a complaint, naming among other defendant insurers

Granite State, Lexington, and AIU. On November 1, 2004 (doc. no. 59), these defendants,

represented by the same counsel, filed a joint answer. On April 14, 2005, after Granite State

answered that it is incorporated in Pennsylvania (id. at ¶ 7), GRC dismissed its claims against

Granite State without prejudice for lack of diversity (doc. no. 134), and on April 15, 2005,

1

Case 2:04-cv-03509-LFR Document 408 Filed 01/30/12 Page 1 of 15
Granite State in turn dismissed its counterclaim against GRC (doc. no. 136). Discovery was

closed by June 7, 2010. On October 31, 2011, shortly before all briefs on dispositive

1

On July 23, 2004, GRC commenced this action against 16 of its umbrella and excess insurance 1

carriers, suing for a declaration of insurance coverage against asbestos-related claims and for breach of

insurance contract. GRC sues for a declaration “that any asbestos-related exclusions in the Policies are

invalid and unenforceable” and that defendants are required “to pay for GRC’s defense of the Underlying

Actions, and to reimburse GRC for, or pay on behalf of GRC, any and all judgments or settlements reached

in the Underlying Actions, until such time as the total aggregate limits of each of the foregoing insurance

policies have been exhausted.” (Compl., doc. no. 1 at 10.) GRC also sues for breach of contract, claiming

that defendants “refused to honor their obligations to provide GRC with a defense or indemnification in and

for the Underlying Actions.” (Id., ¶ 73, at 11.)

On June 3, 2005, after Granite State had been dismissed, five insurers named as defendants moved

to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(7) for failure to join indispensable parties under

Federal Rule of Civil Procedure 19. (Doc. no. 149.) Defendants contended that GRC had failed to name all 

insurers which had provided coverage from 1979 to 1986, and that the absent insurers were indispensable

to the action. On September 27, 2005, the court dismissed the action, ruling that the absent insurers were

necessary and indispensable parties under Rule 19. Gen. Refractories Co. v. First State Ins. Co., 234 F.R.D.

99, 100 (E.D. Pa. 2005). On October 27, 2005, reconsideration of that ruling was denied. Defendants

appealed these two orders. (Orders and mem., doc. nos. 158, 159, 166.) On August 28, 2007, our Court of

Appeals reversed the September 27, 2005 order that dismissed the action for lack of necessary parties and

remanded the action. Gen. Refractories Co. v. First State Ins. Co., 500 F.3d 306 (3d Cir. 2007). 

On June 7, 2010, nearly six years after this litigation had commenced, fact discovery closed. 

(Orders, Jan. 21, 2010 and Feb. 19, 2008, doc. nos. 239, 199.) During that time, defendants Lexington and

AIU contended that their policies contained exclusions for asbestos products liability. On October 22 and

November 2, 2010, GRC moved for partial summary judgment as to each of these defendants (doc. nos. 277

and 278,respectively), because their policies did not contain such an exclusion. Defendants changed course. 

On November 22, 2010, defendants moved to amend their answer to state counterclaims for reformation and

rescission of their policies, submitting that “no further discovery is required regarding the counterclaims.” 

(Defs. br., doc. no. 284 at 8-9.) They were permitted to amend the answer. (Order, Mar. 24, 2011, doc. no.

304; Counterclaims, doc. no. 284 at 29-37.) GRC’s motions for summary judgment were granted. (Orders

and mem., June 20, 2011, doc. nos. 318-320.) 

On June 8, 2011, before the court had ruled on the summary judgment motions, GRC again moved

for partial summary judgment requesting dismissal of the amended counterclaims. (Doc. no. 315.) On July

11, 2011, defendants’ response to the motion was due. (Order, June 9, 2011, doc. no. 317.) Defendants were

granted an enlargement of the deadline to July 20, 2011. (Order, July 11, 2011, doc. no. 328.) On July 19,

2011, defendants made their first request for additional discovery to support the counterclaims, which

plaintiff opposed. (July 19, 22, and 29, 2011 letters, doc. nos. 332, 336, 351.) After a conference, defendants

were granted limited discovery and were directed to respond to the motion for summary judgment by

September 9, 2011. (Order, Aug. 3, 2011, doc. no. 352.) On that deadline, defendants cross-moved for

partial summary judgment, contending the policies should be reformed to exclude asbestos-related claims

or should be rescinded (doc. no. 360). On October 31, 2011, Granite State applied for intervention. 

2

Case 2:04-cv-03509-LFR Document 408 Filed 01/30/12 Page 2 of 15
motions were submitted by November 15, 2011, Granite State filed this motion to intervene.

The motion will be denied.

Granite State, Lexington, and AIU each issued to GRC a separate policy for the 1984-

85 period. None of the policies or a policy endorsement has an exclusion for claims related

to asbestos products. These insurers concede as much, but assert the omission resulted from

2

a series of mistakes by their underwriters, and the intent of the parties to include such an

exclusion can be shown by extrinsic evidence. That issue – whether these policies should

3

be reformed to contain asbestos-related exclusions – was presented by GRC and defendants

Lexington and AIU on cross-motions for summary judgment on these defendants’

counterclaims for reformation and rescission (doc. nos. 315, 360, 361 (sealed));

Counterclaims ¶¶ 9, 16, 23, doc. no. 284). By separate order today, GRC’s motion for

summary judgment will be granted, and Lexington and AIU’s counterclaims will be

dismissed with prejudice.

According to Granite State, its policy rights and obligations “have been put in

jeopardy” by the cross-motions for summary judgment filed by GRC, Lexington, and AIU.

Def. br., doc. no. 389 at 4-5. Granite State requests intervention to assert affirmative claims

for reformation or rescission of its policy, describing the alignment of its interests as being

For the period, August 1, 1984 to August 1, 1985, the policies at issue are: Lexington issued to

2

GRC policy no. 552 6337. Doctors Aff. 9/9/11, Ex. 31, doc. no. 361. AIU issued to GRC policy no. 75-

103894. Id., Ex. 30. The AIU policy follows form to the Granite State Insurance Company policy no. 6484-

0088 issued to GRC. Id., Ex. 28. 

Granite State: “Compelling evidence exists demonstrating that the underlying Granite policy failed 3

to contain an asbestos exclusion by mistake . . . .” Def. br., doc. no. 389 at 10, 13. 

3

Case 2:04-cv-03509-LFR Document 408 Filed 01/30/12 Page 3 of 15
those of a “defendant.” Id. at 6, 7; Def. reply br., doc. no. 405 at 3-4; Compl. in intervention,

doc. no. 389, Ex. A. It submits that much of the same extrinsic evidence in support of those

motions shows the parties’ intent to include an asbestos-related exclusion in the Granite State

policy. It requests an opportunity for additional discovery. Def. br., doc. no. 389 at 14-15.

Because of the dismissal of Lexington’s and AIU’s counterclaims, the rest of this

memorandum constitutes dicta. As the complaint for intervention asserts only state law

claims, no independent basis exists for intervention.

In a letter dated May 2, 1985, GRC’s broker, Jennifer Romano of Marsh McLennan,

wrote to Granite State’s underwriter, Michael Bruzzi: “An asbestos exclusion was critical

to our negotiations, but your policy does not exclude it.” Doctors Aff. 9/9/11, Ex. 33, doc.

no. 361. While Bruzzi received the letter, the record does not reflect that he responded to

Romano or that thereafter any communication took place with Granite State about such an

exclusion.

Granite State maintains that it first became aware in October-November, 2010 that its

policy did not contain an exclusion, when GRC filed motions for summary judgment against

Lexington and AIU, contending those policies did not contain such exclusions(doc. nos. 277,

278). Granite State believed “available copies of [its] policy were merely incomplete.” Def.

br., doc. no. 389 at 13. It did not discover “definitive information” and “did not realize its

policy failed to contain an asbestos exclusion endorsement until the March 2010 conclusion

of a search . . . pursuant to the subpoena of GRC.” Id. at 3, 13-14.

4

Case 2:04-cv-03509-LFR Document 408 Filed 01/30/12 Page 4 of 15
As the party moving to intervene, Granite State has the burden of showing that its

claims are properly before the court. Dev. Fin. Corp. v. Alpha Hous. & Health Care, Inc.,

54 F.3d 156, 158 (3d Cir. 1995). Here, jurisdiction depends on complete diversity between

all plaintiffs and all defendants. See Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806).

However, there is no diversity of citizenship between GRC and Granite State because both

are Pennsylvania corporations. Asthe complaint in intervention asserts only state law claims,

no independent basis exists for exercising federal jurisdiction.

Granite State maintains the court has supplemental jurisdiction over the complaint in

intervention under 28 U.S.C. § 1367(a) and (b). According to Granite State, the proposed

claims share common questions of law and fact arising out of the transaction or occurrence

which is the subject of this action. In particular, Granite State relies on the subject matter of

GRC’s claims against Lexington and AIU, and these defendants’ counterclaims for

reformation and rescission of their policies. Therefore, it submits, the proposed claims are

“so related” to the current claims before the court that they form part of the same “case or

controversy” for purposes of supplemental jurisdiction under § 1367(a). Further: §1367(b)’s

restrictions on the extension of jurisdiction over claims asserted by plaintiffs do not preclude

Granite State’s intervention as a defendant. GRC: Granite State proposes to intervene as a

plaintiff “to assert a declaratory judgment action against GRC for reformation and rescission

in the guise of intervening as a defendant”; and § 1367(b) removes such jurisdiction. Pl. br.,

doc. no. 394 at 4-5.

5

Case 2:04-cv-03509-LFR Document 408 Filed 01/30/12 Page 5 of 15
Section 1367 codifies common law “pendent” and “ancillary” jurisdiction. In re

Texas E. Transmission Corp. PCB Contamination Ins. Coverage Litig., 15 F.3d 1230, 1237-

38 & n.7 (3d Cir. 1994) (Congress has confirmed the principle of ancillary jurisdiction in the

enactment of § 1367, using the new statutory term, “supplemental jurisdiction.”). Subsection

1367(a) provides:

Except as provided in subsections (b) and (c) . . . in any civil action of which

the district courts have original jurisdiction, the district courts shall have

supplemental jurisdiction over all other claims that are so related to claims in

the action within such original jurisdiction that they form part of the same case

or controversy under Article III of the United States Constitution. Such

supplemental jurisdiction shall include claims that involve the joinder or

intervention of additional parties.

This subsection codifies the minimum constitutional requirements for exercise of federal

judicial power when jurisdiction is based on federal question or diversity of citizenship. See

Owen Equip. and Erection Co. v. Kroger, 437 U.S. 98, 371-2 & n.10 (1978). To satisfy the

case or controversy requirement, all claims, including claims by persons moving to intervene,

must derive from a “common nucleus of operative fact.” Doherty v. Teamsters Pension Trust

Fund of Philadelphia & Vicinity, 142 Fed. App’x 573, 575 (3d Cir. 2005) (Becker, J.).

Subject matter jurisdiction is limited not only by the provisions of Article III, but also

by Acts of Congress. Owen, 537 U.S. at 372 (“Constitutional power is merely the first hurdle

that must be overcome in determining that a federal court has jurisdiction over a particular

controversy.”). Subsection 1367(b), which interposesthe most obvious problemsfor Granite

State’s intervention, limits the general grant of supplemental jurisdiction in conformity with

6

Case 2:04-cv-03509-LFR Document 408 Filed 01/30/12 Page 6 of 15
statutory law:

In any civil action of which the district courts have original jurisdiction,

founded solely on section 1332 of this title, the district courts shall not have

supplemental jurisdiction under subsection (a) . . . over claims by persons

. . . seeking to intervene as plaintiffs under Rule 24 . . . , when exercising

supplemental jurisdiction over such claims would be inconsistent with the

jurisdictional requirements of section 1332.

By its terms, § 1367(b) expressly limits jurisdiction over claims by persons intervening as

plaintiffs under Rule 24; see Dev. Fin., 54 F.3d at 159 (supplemental jurisdiction over the

claims of a plaintiff-intervenor who shares citizenship with a defendant is eliminated). See

also Owen, 437 U.S. at 376 (court lacked jurisdiction over plaintiff’s counterclaim against

an impleaded third-party, where the claim did not depend upon resolution of the original

claims within the court’s diversity jurisdiction, and there was no independent basis for

federal jurisdiction). Although Granite State captions its motion as one to intervene as a

defendant, the court must “penetrate the nominal party alignment and . . . consider the

parties’ actual adversity of interest.” Dev. Fin, 54 F.3d at 159-60.

Granite State does not propose defensive counterclaims because it has not been haled

into court against its will. In early 2005, GRC and Granite State stipulated to dismissal of

their claims. Moreover, Granite State moves to initiate affirmative claims for reformation

and rescission that do not depend on resolution of any current claims within the court’s

diversity jurisdiction.

Nonetheless, Granite State, Lexington, and AIU have concerns that coincide. Granite

State’s liability, along with that of the other defendant excess insurers, is joint and several.

7

Case 2:04-cv-03509-LFR Document 408 Filed 01/30/12 Page 7 of 15
J.H. France Refractories Co. v. Allstate Ins. Co., 626 A.2d 502, 508 (Pa. 1993) (insured is

“free to select the policy or policies under which it is to be indemnified”). Each insurer is

adverse to plaintiff’s claims for performance under the policies and adverse to another

defendant’s cross-claims for contribution and indemnity. In this context, Granite State

desires a ruling that its policy should be reformed to include an asbestos-related exclusion.

Granite State suggeststhat Lexington’s and AIU’s policies would follow form to itsreformed

policy exclusion, and such a ruling would aid Lexington’s and AIU’s policy defenses against

GRC. It is unclear, however, whether Granite State’s liability to Lexington and AIU for

contribution or indemnity is at stake, since these three insurers are affiliated.

4

Granite State’s alignment with Lexington and AIU is grounded on shared business

concerns, not on questions of law or fact that are common to the interpretation and

enforcement of these insurer’s separate policies. Granite State’s party alignment is more

properly considered to be that of a plaintiff for purposes of § 1367(b). Granite State, as a

nominal intervening defendant of the same citizenship as plaintiff, would avoid the

requirement of diversity of citizenship. But Granite State, which waited years after suit

proceeded against the diverse defendants, now attempts to interpose affirmative claims for

relief over which there is no basis to extend federal jurisdiction since this litigation

commenced. See Owen, 437 U.S. at 2400 (“It is axiomatic that the Federal Rules of Civil

Granite State, Lexington, and AIU are separate corporations. In 1984-85, they operated as “sister 4

companies” of the American International Group, but are now known as Chartis companies. Defs. br., doc.

no. 360-2 at 19 n.6; Defs. br., doc. no. 284 at 1 n.2, 11; Def. reply br., doc. no. 405 at 1 (“AIG” was a holding

company).

8

Case 2:04-cv-03509-LFR Document 408 Filed 01/30/12 Page 8 of 15
Procedure do not create or withdraw federal jurisdiction.”).

It is correct that in situations involving intervention as of right, supplemental

(ancillary) jurisdiction has been upheld over claims as to which there is no independent basis

for federal jurisdiction. See, e.g., Owen, 437 U.S. at 375 n.18 (citing Phelps v. Oaks, 117

U.S. 235, 241 (1886)). However, Granite State’s claims do not present the type of legal

interests that have been protected by allowing intervention. Federal Rule of Civil Procedure

24(a)(2) provides:

Intervention of Right. On timely motion, the court must permit anyone to

intervene who: . . . (2) claims an interest relating to the property or

transaction that is the subject of the action, and is so situated that disposing of

the action may as a practical matter impair or impede the movant’s ability to

protect its interest, unless existing parties adequately represent that interest.

As a litigant moving to intervene as a matter of right under Rule 24(a)(2), Granite State must

establish four elements: a timely motion; sufficient interest in the litigation; which might be

impaired, as a practical matter, by disposition of the action; and inadequate representation

of the movant’s interest by existing parties to the litigation. Liberty Mut. Ins. Co. v.

Treesdale, Inc., 419 F.3d 216, 220 (3d Cir. 2005), Kleissler v. U.S. Forest Serv., 157 F.3d

964, 969 (3d Cir. 1998); United States v. Alcan Alum., Inc., 25 F.3d 1174, 1181 (3d Cir.

1994); Harris v. Pernsley, 820 F.2d 592, 596 (3d Cir. 1987). “Each of these requirements

must be met to intervene as of right.” Mountain Top Condo. Ass’n v. Dave Stabbert Master

Builder, Inc., 72 F.3d 361, 366 (3d Cir. 1995).

An interest sufficient for intervention must be one “relating to the property or

9

Case 2:04-cv-03509-LFR Document 408 Filed 01/30/12 Page 9 of 15
transaction that is the subject of the action,” Fed. R. Civ. P. 24(a)(2), and is “significantly

protectable,” Donaldson v. United States, 400 U.S. 517, 531 (1971). Granite State maintains

that its umbrella policy “established the scope of coverage for the 1984-85 policy year” and,

therefore, its contractual rights and obligations are at issue. Def. br., doc. no. 389 at 4, 8-9.

Granite State: “Consideration and determination of the terms and conditions of the

Lexington and AIU contracts necessarily requires consideration of the terms of the Granite

State policy . . . to which the Lexington and AIU policies follow form.” Id. at 9. This does

not state an adequate interest for intervention in the present litigation.

Granite State does not have a legal interest in the insurance transactions and contracts

that are the subject of this action, and is not a party to the Lexington and AIU contracts. It

has no standing to assert Lexington’s or AIU’s contract rights. See Petty v. Hosp. Serv.

Ass’n of N. Pa., 23 A.3d 1004, 1013 (Pa. 2011) (“party to an insurance contract has standing

to sue to enforce the terms of the insurance contract”); Catroppa v. Carlton, 998 A.2d 643,

646-47 (Pa. Super. Ct. 2010), appeal denied, 26 A.2d 1100 (Pa. 2011) (“While an insurer is

in privity with its insured regarding matters implicating the insurance policy that establishes

thisrelationship, this privity does not extend to matters arising from other insurance contracts

between the insurer and third parties.”). Granite State is unable to obtain reformation or

rescission of other defendants’ policies. Navarro v. Ohio Cas. Ins. Co., 472 A.2d 701, 702

(Pa. Super. Ct. 1984) (to be entitled to reformation due to mutual mistake, “a person must be

either a party to the instrument or in privity with said parties”).

10

Case 2:04-cv-03509-LFR Document 408 Filed 01/30/12 Page 10 of 15
Granite State says it should be allowed to intervene because the excess policies at

issue in this action “follow form” to its first-layer umbrella policy. This position relies on

5

the unstated premise that if the defendant excess insurers are found liable on their insurance

agreements, Granite State must be as well. This is a faulty premise. “By definition, a

following form policy incorporates terms from an underlying, primary policy [or here,

umbrella policy].” Kropa v. Gateway Ford, 974 A.2d 502, 505 n.3 (Pa. Super. Ct. 2009),

appeal denied, 990 A.2d 730 (Pa. 2010) (citing Lexington Ins. Co. v. W. Pa. Hosp., 318 F.

Supp.2d 270, 274 n.3 (W.D. Pa. 2004) (“It is well settled that the obligations of following

form excess insurers are defined by the language of the underlying policies, except to the

extent that there is a conflict between the two policies, in which case the wording of the

excess policy will control.”), aff’d, 423 F.3d 318 (3d Cir. 2005)).

While the excess policies at issue here cannot be interpreted in isolation from the

umbrella policy, a determination of the defendant insurers’ rights and obligations can occur

in Granite State’s absence. The umbrella policy does not create any contract rights or

obligations for Granite State under the excess policies. A ruling as to whether the excess

policies follow form to the umbrella policy would not impinge on any existing contract rights

or responsibilities held by Granite State under the umbrella policy. See Continental Cas. Co.

v ZHA, Inc., 154 F.R.D. 281, 282-83 (M.D. Fla. 1994) (general liability insurer had no

interest relating to a professional liability policy issued to a common insured and could not

This issue has not yet been ruled on, and GRC disputes that Lexington’s policy follows Granite

5

State’s policy form.

11

Case 2:04-cv-03509-LFR Document 408 Filed 01/30/12 Page 11 of 15
intervene in a declaratory judgment action to determine rights and obligations under the

professional liability policy).

Lacking an interest warranting intervention, Granite State cannot show it has an

interest that might be impaired by disposition of the action. In the prior appeal in this case,

defendant insurers asserted that the “absent insurers whose policies must be interpreted in

[this] declaratory judgment action have an interest relating to the subject of the action – the

interpretation of their policies – and the disposition of the action in their absence might, as

a practical matter, impair or impede their ability to protect the interpretation of their

policies.” Gen. Refractories Co. v. First State Ins. Co., 500 F.3d 306, 316-17 (3d Cir. 2007)

(internal quotation marks omitted). Our Court of Appeals rejected this position as being

“without support.” Id. (citing Janney Montgomery Scott, Inc. v. Shepard Niles, Inc., 11 F.3d

399, 401-02 (3d Cir. 1993)). Although this was decided in the context of whether

defendants’ interests were sufficient to qualify them as necessary parties under Rule 19(a)(2),

the same analysis applies to Granite State’s application for intervention under Rule 24(a).

Granite State would not be bound by any ruling in this action. Moreover, the outcome of this

litigation would not result in any res judicata, claim preclusion, or significant stare decisis

as to Granite State. See Gen. Refractories, 500 F.3d at 317 (merely “persuasive precedent”

against an absent party would not impair that party’s ability to protect its interest within the

meaning of Rule 19(a)(2)(i)); Janney Montgomery, 11 F.3d at 409 (“an argument that issue

preclusion is possible is not enough”).

12

Case 2:04-cv-03509-LFR Document 408 Filed 01/30/12 Page 12 of 15
Granite State also submits that its interest are “so divergent” from Lexington’s and

AIU’sthat those defendants “cannot devote proper attention to Granite State’sinterests,” and

their representation would therefore be inadequate. Def. br., doc. no. 389 at 11. However,

Granite State does not have any protectable interests to be represented in this action. Its

concern that the excess insurers do not have first-hand knowledge of its “more extensive

negotiations” for the umbrella policy would be relevant only if that policy were at stake in

this litigation, which it is not. Id. at 11-12.

In the alternative, Granite State moves for permissive intervention under Rule 24(b),

which provides in part: “On timely motion, the court may permit anyone to intervene who:

. . . has a claim or defense that shares with the main action a common question of law or fact.

Fed. R. Civ. P. 24(b)(1)(B). “In exercising its discretion, the court must consider whether

the intervention will unduly delay or prejudice the adjudication of the original parties’ rights.

Fed. R. Civ. P. 24(b)(3). Permissive intervention is within the court’s discretion. Brody by

and Through Sugzdinis v. Spang, 957 F.2d 1108, 1124 (3d Cir. 1992). Unlike intervention

as of right, an applicant for intervention by permission must establish an independent

jurisdictional basis for its claims. Beach v. KDI Corp., 490 F.2d 1312, 1319-20 (3d Cir.

1974); Westra Constr., Inc. v. U.S. Fid. & Guar. Co., 546 F. Supp.2d 194, 199-200 (M.D. Pa.

2008); CSX Transp., Inc. v. City of Philadelphia, No. 04-5023, 2005 WL 1677975, at *1

(E.D. Pa. July 15, 2005).

Permissive intervention is not appropriate whether or not Granite State’s claims for

13

Case 2:04-cv-03509-LFR Document 408 Filed 01/30/12 Page 13 of 15
reformation and rescission “share common questions of law and fact with GRC’s action

against its insurers . . . .” Def. br., doc. no. 389 at 16. The complaint in intervention posits

only affirmative state law claims as to which there is no independent federal basis for

jurisdiction. Also, Granite State’s presence would make case management unduly complex.

It would delay and prejudice the timely adjudication of the parties’ numerous dispositive

motions. Granite State’s practical concerns about this litigation are adequately represented

by defendants Lexington and AIU. These three insurers are represented by the same counsel.

Intervention, whether by right under Rule 24(a) or by permission under Rule 24(b),

must be timely. Granite State’s motion is not timely. “Timeliness of an intervention request

‘is determined by the totality of the circumstances.’” In re Cmty. Bank of N. Va., 418 F.3d

277, 314 (3d Cir. 2005) (quoting Alcan, 25 F.3d at 1181). “Among the factors to be

considered are: (1) the stage of the proceeding; (2) the prejudice that delay may cause the

parties; and (3) the reason for the delay.” Id. (citing Mountain Top, 72 F.3d at 369).

In this case, Granite State knew as far back as May 1985 that its policy did not contain

an exclusion related to asbestos products liability. The participation of its counsel in many

years of discovery in this action provided ample opportunity to identify shortcomings in the

underwriting or compilation of the Granite State, Lexington, and AIU policies. In October

and November, 2010, GRC filed summary judgment motions based on the absence of such

an exclusion in the Lexington and AIU policies. Even then, Granite State did not move for

intervention to cure the alleged omission. At this stage in the case, intervention is untimely.

14

Case 2:04-cv-03509-LFR Document 408 Filed 01/30/12 Page 14 of 15
The delay would prejudice the existing parties and waste judicial resources. See Choike v.

Slippery Rock Univ. of Pa. State Sys. of Higher Educ., 297 Fed. App’x 138, 141 (3d Cir.

2008) (intervention properly denied where case was in relatively advanced stage and

discovery closed five months before the motion was filed).

An order accompanies this memorandum.

BY THE COURT:

/s/ Edmund V. Ludwig

Edmund V. Ludwig, J.

15

Case 2:04-cv-03509-LFR Document 408 Filed 01/30/12 Page 15 of 15