IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

PNC BANK, N.A., )

 )

Plaintiff, )

)

v. ) CIVIL ACTION 14-0461-WS-C

 )

PRESBYTERIAN RETIREMENT )

CORPORATION, INC., et al., )

 )

Defendants. )

ORDER

This matter comes before the Court on the Motion of Infirmary Health System, Inc. to 

Intervene (doc. 11). The Motion has been briefed and is now ripe.

I. Relevant Background.1

Defendant Presbyterian Retirement Corporation, Inc. (“Presbyterian”) operates 

Westminster Village, a continuing care retirement community in Spanish Fort, Alabama.2 Some 

years ago, Presbyterian borrowed large sums of money, both through direct loans made by the 

predecessor of plaintiff, PNC Bank, N.A. (“PNC Bank”), and through revenue bonds under 

which its repayment obligations were guaranteed by putative intervenor Infirmary Health 

System, Inc. (“Infirmary Health”). With respect to the latter, Presbyterian is contractually bound

 1 In-depth recitation of the facts and circumstances precipitating this litigation is 

not necessary to understand and adjudicate the pending Motion to Intervene; rather, a broad 

sketch will suffice. To be clear, the Court makes no findings of fact at this early stage, but 

simply culls what appear to be uncontested facts from pleadings and briefs submitted to date. 

Insofar as any party disputes the accuracy of any fact set forth herein, rest assured that there will 

be ample opportunity to litigate that issue at a later date. This statement of “facts” is neither final

nor binding on anyone.

2 This facility is owned by defendant The Special Care Facilities Financing 

Authority of the City of Daphne (the “Authority”). For purposes of the pending Motion to 

Intervene, it is unnecessary to address the Authority’s status and involvement; therefore, this 

Order will not otherwise reference or discuss the Authority.

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to reimburse Infirmary Health for payouts under that guaranty, and has granted Infirmary Health 

a mortgage on and a security interest in Westminster Village and other collateral. Likewise, 

Presbyterian has promised to repay the PNC Bank direct loans, and has granted PNC Bank a 

mortgage on and a security interest in Westminster Village and other collateral.

Both the revenue bonds guaranteed by Infirmary Health and the direct loans made by 

PNC Bank matured more than a year ago, at which time they were subject to balloon payment 

requirements. Presbyterian did not make (and was evidently unable to make) those balloon 

payments, thereby placing it in default as to both sets of obligations. When the bondholders 

called upon Infirmary Health to fulfill its guaranty commitments, it did so, paying out nearly 

$13.5 million in September 2014 to satisfy in full Presbyterian’s outstanding indebtedness on 

those bonds. Infirmary Health now looks to Presbyterian to reimburse it for that guaranty 

payment. Similarly, PNC Bank contends that Presbyterian owes it more than $6.8 million in 

unpaid principal on certain bonds, as well as an additional $1.3 million on certain swap 

obligations, all apparently relating to its direct loans.

As a result of the foregoing events, Presbyterian is in default of its payment obligations to 

PNC Bank and Infirmary Health, both of which are secured creditors of Presbyterian and 

mortgagees as to Westminster Village. For its part, PNC Bank commenced this lawsuit against 

Presbyterian on October 2, 2014, seeking to exercise certain remedies under the relevant 

contracts, including expedited appointment of a receiver to manage Westminster Village pending

a contemplated foreclosure sale that PNC Bank has noticed for March 2015. To that end, 

contemporaneously with the filing of its Complaint, PNC Bank filed a Motion for Appointment 

of Receiver, requesting that this Court appoint a receiver on both legal and equitable grounds to 

take immediate possession and control of Westminster Village. (See doc. 3.) To accompany that 

Motion, PNC Bank filed an extensive proposed order that would, among other things, empower 

the receiver to market and sell Westminster Village and to file a bankruptcy petition on 

Presbyterian’s behalf. (See doc. 3, Exh. A.) That proposed order also would enjoin all persons, 

firms and corporations (including Infirmary Health) from taking steps to enforce any lien or 

mortgage as to Westminster Village, absent express court permission to do so. (Id.) In filing its 

Complaint and seeking immediate appointment of a receiver, PNC Bank neither named 

Infirmary Health as a party nor obtained Infirmary Health’s consent. For its part, Infirmary 

Health opposes all of PNC Bank’s activities described herein.

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On October 14, 2014, a mere 12 days after PNC Bank filed the Complaint and Motion for 

Appointment of Receiver, Infirmary Health filed a Motion to Intervene pursuant to Rule 24 of 

the Federal Rules of Civil Procedure. In this filing, Infirmary Health expresses profound 

disagreement with PNC Bank’s proposed strategy of appointing a receiver to manage 

Westminster Village, insisting that the pathway charted by PNC Bank would impair the value of 

this facility rather than preserve it, thereby damaging Infirmary Health’s interests in such 

collateral. Moreover, Infirmary Health asserts that PNC Bank’s actions of unilaterally noticing a 

foreclosure sale and moving for appointment of receiver are in violation of a December 2005 

Intercreditor Agreement that governs their relative priorities, rights and duties with respect to the 

collateral, including Westminster Village. On that basis, Infirmary Health requests leave to 

intervene in this matter to protect its rights and interests as a secured creditor, to oppose the 

appointment of a receiver, to bar PNC Bank from relying on or enforcing any aspect of the 

Intercreditor Agreement, and to obtain damages for PNC Bank’s purported breaches of said 

Intercreditor Agreement. Infirmary Health’s position is that, “[g]iven IHS’s significant and 

senior interest in the Collateral, IHS must be allowed to be heard in order for its rights and 

interests to be protected.” (Doc. 11, at 20.)

For its part, PNC Bank asserts that Infirmary Health “is not entitled to intervene either as 

a matter of right or permissively in this receivership proceeding.” (Doc. 22, at 5.) Despite its 

contention that intervention would not be proper under Rule 24, PNC Bank also states that it 

“does not object” to the Motion because Infirmary Health “is a uniquely-situated creditor.” 

(Doc. 22, at 6.) Apparently, PNC Bank would have this Court grant the Motion to Intervene 

even as it concludes that Infirmary Health does not meet the Rule 24 criteria for intervention. 

Given the curious tension inherent in PNC Bank’s position, it would be unwise and inappropriate 

summarily to grant the Motion to Intervene as unopposed. For that reason, the undersigned will

scrutinize the Motion on the merits.

II. Analysis.

“Rule 24 provides two avenues for a nonparty to intervene in a lawsuit; intervention as of 

right and intervention with permission of the court.” In re Bayshore Ford Trucks Sales, Inc., 471 

F.3d 1233, 1246 (11th Cir. 2006). To intervene as of right pursuant to Rule 24(a)(2), a person 

“must show that it has an interest in the subject matter of the suit, that its ability to protect that 

interest may be impaired by the disposition of the suit, and that existing parties in the suit cannot 

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adequately protect that interest.” Mt. Hawley Ins. Co. v. Sandy Lake Properties, Inc., 425 F.3d 

1308, 1311 (11th Cir. 2005).3 Thus, the three-pronged inquiry for a timely Rule 24(a)(2) motion 

consists of the following: (i) whether Infirmary Health has shown that it has an interest in the 

subject matter of this lawsuit; (ii) whether Infirmary Health has shown that its ability to protect 

such interest may be impaired by disposition of the suit; and (iii) whether Infirmary Health has

shown that existing parties cannot adequately represent its interest. See Rule 24(a)(2), 

Fed.R.Civ.P. (intervention as of right is required where a person “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”).

With regard to the first element, the question is whether Infirmary Health’s “interest in 

the subject matter of the litigation is direct, substantial and legally protectable.” Georgia v. U.S. 

Army Corps of Engineers, 302 F.3d 1242, 1249 (11th Cir. 2002); see also Bayshore, 471 F.3d at 

1246 (“[t]he prospective intervenor must demonstrate an interest relating to the property or 

transaction which is the subject of the action if relying on Rule 24(a)”) (internal quotation marks 

and emphasis omitted). Court documents reflect that Presbyterian owes Infirmary Health more

than $13 million, that it defaulted on that payment obligation, and that this indebtedness is 

secured by a mortgage on Westminster Village in Infirmary Health’s favor. PNC Bank brought 

this Complaint seeking appointment of a receiver to assume control of Westminster Village. 

Given that Infirmary Health’s interest in Westminster Village is direct, substantial and legally 

protectable, and given that the value (and, indeed, the fate) of this facility hangs in the balance in 

this litigation, it cannot seriously be questioned that the first element of the Rule 24(a)(2) test is 

satisfied. See generally WildEarth Guardians v. U.S. Forest Service, 573 F.3d 992, 996 (10th

 3 A Rule 24(a) motion must also be timely. See, e.g., Georgia v. U.S. Army Corps 

of Engineers, 302 F.3d 1242, 1250 (11th Cir. 2002) (“Before a party can intervene as a matter of 

right, it must timely move to intervene.”). Infirmary Health’s Motion to Intervene is timely 

under any reasonable construction of the term. After all, Infirmary Health submitted its Motion 

less than two weeks after the Complaint was filed. No defendant had yet filed a responsive 

pleading. No discovery had been initiated. No substantive rulings had been issued. This 

litigation will not be delayed in the slightest, and no party will be prejudiced, by the short 

interval that elapsed between the filing of the Complaint and the Motion to Intervene. 

Accordingly, the Court readily concludes that the Motion is timely.

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Cir. 2009) (“The threat of economic injury from the outcome of litigation undoubtedly gives a 

petitioner the requisite interest.”) (citation omitted).

The second element requires Infirmary Health to demonstrate that it “is so situated that 

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

its interest.” Rule 24(a)(2). The Eleventh Circuit has explained that, “[w]here a party seeking to 

intervene in an action claims an interest in the very property and very transaction that is the 

subject of the main action, the potential stare decisis effect may supply the practical 

disadvantage which warrants intervention as of right.” Georgia, 302 F.3d at 1258 (citation 

omitted). Such is the case here. Infirmary Health maintains that the appointment of a receiver

will “diminish[] the operating prospects of [Presbyterian] and thus the value of [Westminster 

Village],” thereby substantially impacting (and, in Infirmary Health’s view, harming) the 

collateral in which it possesses a secured interest. Once the receiver has been appointed, it may 

be difficult or impossible for Infirmary Health to undo this alleged harm via subsequent legal

proceedings. Thus, it appears beyond cavil that disposition of this action may as a practical 

matter impair or impede Infirmary Health’s ability to protect its interest in Westminster Village.

As for the third and final element, Infirmary Health bears the burden of showing that the 

existing parties to this action do not adequately represent its interest. “But this is not an onerous 

burden.” Defenders of Wildlife v. Bureau of Ocean Energy Management, 2010 WL 5139101, *3 

(S.D. Ala. Dec. 9, 2010); see also Georgia, 302 F.3d at 1255 (“The proposed intervenor has the 

burden of showing that the existing parties cannot adequately represent its interest, but this 

burden is treated as minimal.”) (citations and internal quotation marks omitted).4 PNC Bank 

submits that Infirmary Health’s Motion to Intervene founders on this requirement, because its 

interest may be “adequately protected by a receiver through procedures supervised by the district 

court allowing creditors to file claims and object to the receiver’s actions.” (Doc. 22, at 5.) But 

what about Infirmary Health’s interest in Westminster Village not going into a forced 

 4 Indeed, a putative intervenor “need only show that the current [defendants’] 

representation may be inadequate, ... and the burden for making such a showing is minimal.” 

Stone v. First Union Corp., 371 F.3d 1305, 1311 (11th Cir. 2004) (citation and internal quotation 

marks omitted); see also Defenders of Wildlife, 2010 WL 5139101, at *3 (finding that putative 

intervenor had satisfied “inadequate representation” element of Rule 24(a)(2) by demonstrating 

that existing defendant’s representation of intervenor’s interest “may be inadequate, despite the 

obvious overlap between them”).

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receivership in the first place? PNC Bank does not address that critical point, which goes to the 

heart of the pending request for intervention.

More broadly, any suggestion that Infirmary Health’s interest in this case will be 

adequately represented by existing parties is demonstrably incorrect. Although PNC Bank is 

similarly situated to Infirmary Health in the sense that both are secured creditors to which 

Presbyterian owes millions of dollars, it is well documented that these two secured creditors have 

vastly divergent opinions as to what should happen next. PNC Bank wants a receiver appointed 

immediately, with Westminster Village going on the auction block in a few months. Infirmary 

Health wants neither of these events to occur, but instead favors some sort of workout, 

restructuring or orderly sale that allows stability and continuity of operations at Westminster 

Village. Under the circumstances, it is painfully obvious that PNC Bank cannot and will not 

adequately represent Infirmary Health’s interest. By the same token, the notion that Presbyterian 

might protect Infirmary Health’s interest because they both oppose receivership may have 

superficial appeal, but breaks down when one considers Presbyterian’s $13+ million 

indebtedness to Infirmary Health, and the clear differences in interests and litigation positions 

that may and likely will emerge from same. Accordingly, the undersigned is satisfied that 

Infirmary Health has met its light burden of showing that existing parties and any duly appointed 

receiver may not adequately represent its interest herein.

III. Conclusion.

For all of the foregoing reasons, the Court concludes that Infirmary Health is entitled to 

intervene in this matter as of right, pursuant to Rule 24(a)(2), Fed.R.Civ.P. Accordingly, the 

Motion of Infirmary Health System, Inc. to Intervene (doc. 11) is granted, and movant is 

granted leave to intervene in this action. The Clerk of Court is directed to add Infirmary Health 

System, Inc. as a party defendant. The Answer and Counterclaim (doc. 12) previously submitted 

by Infirmary Health is deemed filed as of today’s date, and the time for PNC Bank to file an 

answer or other responsive pleading to the Counterclaim pursuant to Rule 12(a)(1)(B), will run 

from today’s date.

DONE and ORDERED this 4th day of November, 2014.

s/ WILLIAM H. STEELE 

CHIEF UNITED STATES DISTRICT JUDGE

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