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1 All parties have consented to the jurisdiction of a

United States Magistrate Judge for all proceedings including

entry of final judgment pursuant to 28 U.S.C. § 636(c).

1

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ST. PAUL REINSURANCE COMPANY

LIMITED LONDON,

Plaintiff(s),

v.

THE FORT MILLER GROUP, INC.

and BEECHE SYSTEMS

CORPORATION,

Defendant(s).

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No. C05-1912 BZ

ORDER DENYING MOTION TO

INTERVENE

Robison-Prezioso, Inc. (Robison) has moved to intervene

in this insurance coverage dispute.1

 Plaintiff opposes

intervention. Defendants have not taken a position. 

None of the cases upon which Robison relies establishes

that it has a protectable interest which may as a practical

matter be impaired if it is not allowed to intervene. This

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2 See e.g. Security Ins. Co. of Hartford v. Schipporeit, Inc., 69 F.3d 1377 (7th Cir. 1995)(intervention

permitted after defendant’s default entered to avoid allowing

insurer “to play the Washington Generals and get out of town

with a quick win”); Truck Ins. Co., v. Superior Court, 60

Cal.App.4th 342, 347-48 (1997) (intervention permitted to

prevent insured’s default from destroying insurer’s right to

pursue equitable contribution).

3 See e.g. St. Paul Fire & Marine Ins. Co. v.

Summit-Warren, 143 F.R.D. 129 (N.D.Ohio 1992)(defunct

corporation); Teague v. Bakker, 931 F.2d 259, 260 (4th Cir.

1991)(defendant insured in prison and with limited financial

resources to satisfy $129 million dollar judgment); Continental

Ins. Co., v. Law Office of Thomas J. Walker, 171 F.R.D. 183,

185 (D. Ma. 1997) (defendant’s limited funds would prevent

intervenors from satisfying judgment if policy rescinded); TIG

Specialty Ins. Co., v. Financial Web.com, Inc., 208 F.R.D. 336,

338 (M.D. Fla. 2002) (intervenor’s sole means of recovery was

insurance policy plaintiff sought to rescind).

2

is not a case in which the defendants have defaulted, leaving

no one except an intervenor to defend against an insurer's

efforts to eliminate coverage.2 Nor is this a case where the 

defendants are defunct, bankrupt or in prison and there

appears to be a real risk that absent insurance coverage,

Robison will be unable to recover on a judgment.3 Robison is

suing defendants for $12 million dollars in state court. 

Before St. Paul's “gap” insurance policy would come into

play, Robison would have to obtain a judgment and then be

unable to satisfy it from defendants or from defendants'

other insurers. Unlike the individual defendants in most of

the cases in which the intervenor relies, the defendants here

appear to be substantial corporations, one of which,

according to its website, has been in business for over 50

years.

In its reply papers, Robison for the first time asserts

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that it might not be able to recover on a potential judgment

for two reasons. First, it claims that defendant Beeche

Systems Corporation’s (Beeche) parent, defendant The Fort

Miller Group, Inc., (Fort Miller) “has disclaimed any

liability or responsibility for Beeche's actions in

connection with the project and will not contribute to any

settlement and or judgment.” (Robison’s Reply p. 10). 

Nowhere does Robison state the factual basis for this claim

or explain how Fort Miller might avoid any judgment entered

against it since Fort Miller is a named defendant in

Robison's state court suit. Second, Robison asserts that

Beeche filed a bankruptcy proceeding in 1991. This

information is contained in the declaration of Angela Zanin,

counsel for Robison, who describes her role as including

“research on the financial stability of the defendants.”

(Zanin Decl. para. 2). Nowhere is there any explanation as

to why this information was not filed in support of its

motion so that St. Paul would have had an opportunity to

respond. Raising new factual material in the reply is

disfavored and I have attached less weight to it. See Lujan

v. National Wildlife Federation, 497 U.S. 871, 894-95 (1990);

Judge William W. Schwarzer, et al., Federal Civil Procedure

Before Trial, § 12:107 (Rutter Group 2004). Without more, the

fact that one defendant filed for bankruptcy 14 years ago

does not justify intervention.

Robison has cited no California authority in which a

plaintiff has been allowed to intervene in a coverage dispute

between the defendant and defendant's insurer. Nor has it

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cited any persuasive reason why this should be permitted in a

routine coverage dispute which lacks any of the special

characteristics, such as a default or a bankruptcy, which

have troubled the courts. On the contrary, what Robison

seeks seems inconsistent with California's restrictions on

direct actions against insurers. See Cal. Ins. Code § 11580. 

Nor has Robison established that defendants cannot

adequately protect its interests. Defendants are represented

by a major law firm and appear to be actively defending this

action. 

Alternatively, Robison seeks to permissively intervene

under Fed. R. Civ. Proc. 24(b). A court may exercise its

discretionary power to permit intervention where there is a

common question of law or fact between the movant’s claim and

the main action. See U.S. v. State of Wash., 86 F.3d 1499,

1506-07 (9th Cir. 1996). Robison has failed to explain what

common questions of law or fact exist to justify permissive

intervention. Whatever commonality exists, it is only with

respect to St. Paul’s third claim, and not with respect to

the lead rescission claims. I have denied defendants’ motion

to transfer and the action will stay in this Court. To the

extent that Robison’s interests are implicated, Robison is

free to offer assistance to defendants and may be subpoenaed

to provide witnesses and documents. 

For the foregoing reasons, IT IS ORDERED that Robison's

motion to intervene is DENIED without prejudice to being 

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renewed if changing circumstances align this case with the

cases that have permitted intervention. 

Dated: November 10, 2005

Bernard Zimmerman 

 United States Magistrate Judge

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