United States Court of Appeals

For the First Circuit

No. 04-2620

LARRY EWERS,

Plaintiff, Appellee,

HOWARD EUGENE LINER; CREDITORS COMMITTEE OF THE 

BANKRUPTCY ESTATE OF CHRISTOPHER PATRICK HERON; 

AH PING BAN; FLAMECREST ENTERPRISES LIMITED TRUST; 

BALZ RUDOLPH WOLFENSBERGER TRUST, 

Movants, Appellants, 

v.

CHRISTOPHER PATRICK HERON; CORPORATION OF THE 

BANKHOUSE, INC.; SOCIETE BANKHOUSE; JAMES F. POMEROY, II,

Defendants.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Rya W. Zobel, U.S. District Judge]

Before

 Torruella, Lynch, and Lipez,

Circuit Judges.

Alan M. Spiro with whom Edwards & Angell, LLP was on brief,

for Appellee.

Isaac H. Peres for Appellants.

August 11, 2005
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LYNCH, Circuit Judge. A series of complicated

litigations worldwide has several claimants seeking a sum of over

$1.6 billion from Christopher Patrick Heron and his associated

entities. Our issue can be stripped to its essence without

recounting the details of the drama. 

The district court denied a motion to intervene as of

right brought by Liner and other claimants in a lawsuit which had

been brought in Massachusetts federal court against Heron (and

others) by another claimant, Ewers. The reason given for the

purported intervention was that if Ewers received the funds he

would pocket them and disappear, to the claimants' detriment. All

of the claimants purport to have an interest in any money recovered

from Heron (as does Ewers). One of the claimants, Liner, admitted

he had at one point given Ewers a power of attorney to seek the

funds on Liner's behalf, and Ewers argues that under a Compensation

Agreement with Liner, Liner agreed to split 50/50 any recovery that

Ewers made from Heron on Liner's behalf. But Liner has said he

later cancelled these agreements when Ewers proved to be sneaky and

untrustworthy. Ewers has equally unattractive things to say about

Liner. As for the other claimants, they allege that Ewers entered

into an agreement with Alexander Pladott, their representative, to

distribute any money recovered from Heron amongst all of the

claimants.
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The claimants attempted to intervene, some seven months

after Ewers had initiated the Massachusetts lawsuit. At that

point, the defendant Heron had defaulted, but no final judgment had

yet entered.

The district court held a hearing on the motion to

intervene, and ascertained the claimants' interest in the case.

The court was also told that there were two separate lawsuits

pending in Texas, one testing the relative rights between Ewers and

Liner under their agreements and the other testing the relative

rights of Ewers and the other claimants, as represented by Pladott,

to whatever money Ewers recovered from Heron.

Cutting to the chase, the court asked why, if Liner was

"concerned that Ewers is going to somehow dissipate these assets,

. . . we can't deal with that . . . by making an order that says

that there needs to be prior approval of the court of any

disbursements of anything that is recovered." To this eminently

practical suggestion, the claimants responded in essence that they

had a right to intervene under Fed. R. Civ. P. 24(a)(2) and that

they were concerned that given what they described as Ewers'

propensity to lie, he would secrete any money recovered. The court

noted that the Massachusetts suit was virtually over. The

claimants' response was that it would not do any harm to let them

intervene.
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Ewers, in turn, agreed to the proposed order, and said

that the claimants were really trying to take over and free ride in

the litigation, which he had fully funded. He also said that the

claimants' motion was interfering with his effort to get a

judgment. Ewers finally argued that the motion to intervene was

not timely and that allowing intervention would prejudice him.

The court, noting that it seemed to be in the interests

of the claimants and Ewers to actually collect a judgment as soon

as possible, and then to let the question of appropriate shares be

decided in Texas, denied the motion to intervene. It also entered

this order:

Counsel shall submit a form of default

judgment against all existing defendants that

shall include a clause prohibiting plaintiff

from disbursing any funds collected without

notice to the proposed intervenors and

approv[al] by the court.

That default judgment was never entered. The parties

tell us this is because the claimants took this appeal. The appeal

is without merit. 

The legal standards are familiar. Denials of

intervention of right are subject to interlocutory appeal. Rhode

Island v. United States EPA, 378 F.3d 19, 26 (1st Cir. 2004). Our

review of denial of intervention is only for abuse of discretion,

with closer review when the intervention is of right. Int'l Paper

Co. v. Town of Jay, 887 F.2d 338, 344 (1st Cir. 1989); see also
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Maine v. Dir., United States Fish & Wildlife Serv., 262 F.3d 13, 17

(1st Cir. 2001). 

One way to show such an abuse of discretion is to show

that the district court ignored the four pertinent legal criteria

that one must meet in order to intervene under Fed. R. Civ. P.

24(a)(2): 

(1) the party must claim an interest in the

property; (2) disposition of the case without

intervention, would, as a practical matter,

impair or impede the party's ability to

protect that interest; (3) the party's

interest is inadequately represented by the

existing parties; and (4) the motion for

intervention is timely made. 

United States v. 116 Emerson St., 942 F.2d 74, 77 (1st Cir. 1991)

(internal quotation marks and alteration omitted). The transcript

of the hearing on the motion to intervene shows the district court

adhered to the criteria. 

Another way to show abuse of discretion is to show the

court was just wrong -- it committed clear error in the facts it

found or was entirely unreasonable in its judgment about applying

the four criteria to the facts. This doctrine gives the claimants

no assistance here. 

The motion to intervene was inherently weak on all four

grounds. Nonetheless, the district court fashioned an admirable

order protecting the claimants should there be mischief, thus

efficiently accomplishing much of what the claimants sought. An
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eminently wise order is not an abuse of discretion. The district

court order denying intervention is affirmed. 

Costs are allowed to Ewers.