Opinion ID: 1990113
Heading Depth: 1
Heading Rank: 2

Heading: Digital's Motion to Intervene

Text: We now turn to Digital's appeal from the denial of its motion to intervene. Digital asserts that the hearing justice erred in denying its motion to intervene in this case. Specifically, Digital maintains that the Superior Court misapplied the law in determining that Digital did not have a protectable interest in the case for purposes of intervention as of right under Rule 24(a)(2) of the Superior Court Rules of Civil Procedure. Intervention as of right is governed by Rule 24(a)(2). [8] Under Rule 24(a)(2), an applicant will be granted intervention as of right if the applicant files a timely application (a factor not challenged here), the applicant claims an interest relating to the property or transaction which is the subject matter of the action, the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, and the applicant's interest is not adequately represented by current parties to the action (a factor also not challenged here). If the applicant satisfies these four criteria, then the applicant shall be permitted to intervene. Id.; see Stringfellow v. Concerned Neighbors in Action, 480 U.S. 370, 382 n. 1, 107 S.Ct. 1177, 94 L.Ed.2d 389 (1987). Rhode Island precedent on this point is sparse. Since the 1995 amendment aligning Rule 24(a) with its federal counterpart, this Court has addressed this rule twice. See Credit Union Central Falls v. Groff, 871 A.2d 364, 366 (R.I.2005) (granting intervention to a party that demonstrated a particularized interest in funds in a client trust account); Direct Action for Rights and Equality v. Gannon, 713 A.2d 218, 221-22 (R.I.1998) (affirming the trial justice's denial of intervention after final judgment as untimely). While Credit Union Central Falls does provide some guidance, since Rhode Island precedent is limited, we may properly look to the federal courts for guidance. Crowe Countryside Realty Associates, Co., LLC v. Novare Engineers, Inc., 891 A.2d 838, 840 (R.I.2006) (where the federal rule and our state rule of procedure are substantially similar, we will look to the federal courts for guidance or interpretation of our own rule) (quoting Smith v. Johns-Manville Corp., 489 A.2d 336, 339 (R.I.1985)); Kirios v. Arsenault, 632 A.2d 15, 16-17 (R.I.1993). An intervenor's interest in the litigation must be significantly protectable for intervention to be allowed. Donaldson v. United States, 400 U.S. 517, 531, 91 S.Ct. 534, 27 L.Ed.2d 580 (1971) (stating when Fed.R.Civ.P. Rule 24(a)(2) speaks of `an interest relating to the property or transaction which is the subject of the action []' [w]hat is obviously meant there is a significantly protectable interest). An intervenor's interest must bear a `sufficiently close relationship' to the dispute between the original litigants and the interest must be direct, not contingent. Conservation Law Foundation of New England, Inc. v. Mosbacher, 966 F.2d 39, 42 (1st Cir.1992) (quoting Travelers Indemnity Co. v. Dingwell, 884 F.2d 629, 638 (1st Cir.1989)). In Credit Union Central Falls, this Court stated `[i]nterests in property are the most elementary type of right that Rule 24(a) is designed to protect,' and many of the cases in which a sufficient interest has been found under amended Rule 24(a)(2) have been cases in which there is a readily identifiable interest in land   . 871 A.2d at 367 (quoting 7C Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1908 at 272-75 (1986)). However, the mere fact that a lawsuit may impede a third party's ability to recover in a separate suit ordinarily does not give the third party a right to intervene. Id. (quoting Mountain Top Condominium Association v. Dave Stabbert Master Builder, Inc., 72 F.3d 361, 366 (3d Cir.1995)). In the instant case, the hearing justice recognized that Digital is not simply trying to protect its right to collect; rather, it is trying to protect its specific interest in the property upon which it has a mortgage. She based her decision on the fact that Digital was not entitled to notice under the terms of the lease agreement. The issue whether Digital was entitled to notice under the terms of the lease addresses Digital's likelihood of success after intervention. Digital's right to intervene under Rule 24(a)(2), however, does not turn on whether it is likely to succeed in protecting its claimed interest; rather it turns on whether the disposition of the action may as a practical matter impair or impede [its] ability to protect [the] interest that it claims in the property. Id. Clearly, Digital has asserted a readily identifiable interest in the property, which is the subject of this action, viz., a leasehold mortgage. Moreover, the potential harm to Digital is great because Digital is facing the extinguishment of its security interest, which drastically limits its ability to recoup its financial losses in the event that Mendon Road defaults on the underlying $1.5 million obligation. See Public Service Co. of New Hampshire v. Patch, 136 F.3d 197, 205 (1st Cir. 1998) ([p]otential economic harm to a would-be intervenor is a factor that warrants serious consideration in the interest inquiry). Accordingly, we conclude that Digital's interest in the mortgaged property is sufficient for intervention. We reverse, therefore, the order denying Digital's motion to intervene, and we direct that an order enter allowing Digital to intervene.