Opinion ID: 865097
Heading Depth: 2
Heading Rank: 3

Heading: Federated’s Failure to Intervene

Text: ¶17. Relying only on its statutory right of subrogation, Federated appealed the circuit court’s decision denying its motion for subrogation. Federated admits it did not formally pursue intervention pursuant to Rule 24 of the Mississippi Rules of Civil Procedure but, instead, filed a motion for enforcement of its lien. Federated pointed out in oral argument that our case law has not required a workers’ compensation insurer to intervene or join in an employee’s thirdparty suit in order to assert its statutory lien. Indeed, Federated is correct, as this Court has never required the insurance carrier to join or intervene in an employee’s third-party litigation held that the workers’ compensation insurer “ha[s] a statutory right of subrogation for monies paid to” the claimant. Id. at 813. Therefore, the circuit court’s reliance on the unpublished circuit court opinion in denying Federated’s subrogation reimbursement was misplaced. 7 to validate or enforce its subrogated claim to the proceeds recovered in that litigation. See, e.g., Sneed v. Verdun, 611 So. 2d 947, 948 (Miss. 1992); Kidwell v. Gulf, Mobile & Ohio R.R., 168 So. 2d 735, 736 (1964). However, the question before us today is different. The issue is not whether Federated is entitled to subrogation without intervention, but rather whether Federated may appeal the circuit court’s decision without intervention.5 ¶18. Although Mississippi lacks relevant precedent on this subject, we find the Fifth Circuit’s approach to appeals by non-parties who did not intervene to be well-reasoned and instructive. In SEC v. Forex Asset Management LLC, 242 F.3d 325, 328-29 (5th Cir. 2001), the Fifth Circuit examined whether investors could appeal a district court’s order approving a Receiver’s distribution plan when the investors were not parties named in the SEC’s complaint and never sought to intervene under Rule 24 of the Federal Rules of Civil Procedure.6 Acknowledging the general rule that non-parties lack standing to appeal, the Court applied a three-part test to determine whether the investors, as non-parties, could nonetheless appeal the district court’s order. Id. at 329. Under this test, a court inquires whether “the nonpart[y] actually participated in the proceedings below, the equities weigh in favor of hearing the appeal, and the non-part[y] ha[s] a personal stake in the outcome.” Id. (Citations omitted). 5 The dissent correctly points out that Federated failed to strictly comply with the mandates of Rule 24. If this case involved Federated’s failure to comply with statutory requirements, the dissent’s arguments would be well-taken. However, strict compliance with procedural rules is capable of being waived. See Young v. Huron Smith Oil Co., 564 So. 2d 36, 39 (Miss. 1990) (party waived issue of compliance with the service requirements of M.R.C.P. 4). In this case, no party ever raised the issue of Federated’s formal intervention, and the matter only arose in response to a question posed to counsel at oral argument. 6 Rule 24 of the Federal Rules of Civil Procedure and Rule 24 of the Mississippi Rules of Civil Procedure use virtually the same language to describe the requirements for intervention of right and permissive intervention. Both Rules also require the same intervention procedure. 8 Finding the investors satisfied each prong of the three-part test, the Fifth Circuit determined the investors had standing to appeal. Id. at 330. However, the Fifth Circuit cautioned, and we agree, “that this decision does not indicate that parties will be given a free pass to avoid complying with the rules of intervention.” Id. ¶19. Looking to the first requirement of whether Federated actually participated in the proceedings below, the circuit court and all parties to the litigation accepted Federated as having intervened in the proceedings. No objection was ever raised to Federated’s active participation. As to the second condition – weighing the equities of hearing the appeal – we again find in favor of Federated. The circuit court’s improper imposition of the “made whole” doctrine substantially affects Federated’s statutory subrogation rights. As previously discussed, the application of Section 71-3-71 clearly requires McNeal to reimburse Federated for the workers’ compensation benefits paid out on his behalf in the amount of $66,412.10. Finally, the repayment of money owed to it under Section 71-3-71 gives Federated a personal stake in the outcome, satisfying the third requirement for non-party standing. ¶20. Although the formal procedural requirements of Rule 24 were not met, no objection was raised to either Federated’s participation in the trial court or its pursuit of this appeal. Additionally, Federated satisfies the test for non-party standing to appeal under Forex. However, we stress that the better practice for insurers who anticipate the possible need for judicial assistance in enforcing their liens is to file a formal intervention in accordance with the provisions of Rule 24 of the Mississippi Rules of Civil Procedure. 9