Court Opinion

ID: 5158746
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:29:55.079613+00
Date Added: 2024-06-11T08:25:31.482517
License: Public Domain

Justice MARQUEZ,
dissenting.
123 I respectfully dissent because I believe that the water court erred in denying FMC's motion to intervene as of right under C.R.C.P. 24(a). In my view, FMC's interest is similar to, but not identical with, Cherokee's interest in the underlying litigation. Thus, this case falls under the third category of the test for adequate representation set forth in Cherokee Metropolitan District v. Meridian Service Metropolitan District, 266 P.3d 401, 407 (Colo.2011). That category of the test requires a discriminating judgment on the cireumstances of the particular case and provides that intervention ordinarily should be allowed unless it is clear that the party will provide adequate representation for the absentee. In my view, it is not clear that Cherokee will provide adequate representation for FMC given that Cherokee and FMC are adverse parties in a legal malpractice action that is closely related to the underlying litigation. Therefore, I would reverse the water court's order denying FMC's motion to intervene as of right.
I.
1 24 "Rule 24 should be liberally interpreted to allow, whenever possible and compatible with efficiency and due process, issues related to the same transaction to be resolved in the same lawsuit and at the trial court level." Id. at 404 (quoting Feigin v. Alexa Grp., Ltd., 19 P.3d 23, 26 (Colo.2001)). Rule 24(a)(2) provides:
Upon timely application anyone shall be permitted to intervene in an action ... when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.
125 Here, FMC satisfies the first two parts of Rule 24(a)(@2)3 First, FMC has an interest in minimizing any damages award entered against it in the malpractice action. Cherokee alleges in its malpractice suit *1175against FMC . that its damages should be measured by the value of the water rights it would lose in well 17, as determined by the litigation in this case. See maj. op. T5. Thus, FMC has a direct interest in the outcome of this case. Second, the disposition of this action may as a practical matter impair FMC's ability to protect its interest because FMC may be precluded from arguing in the legal malpractice action that Cherokee's conduct in this case amounted to a failure to mitigate its damages. See Stone v. Satriana, 41 P.3d 705, 712 (Colo.2002) (holding that a legal malpractice plaintiff has no duty to appeal the underlying action because injured parties generally have no affirmative duty to mitigate a tortfeasor's damages). At issue, then, is the third part of Rule 24(a)(@)-whether FMC's interest is adequately represented by Cherokee.
IL.
I 26 The burden of showing that representation is inadequate "should be treated as minimal." Trbovich v. United Mine Workers of Am., 404 U.S. 528, 538 n.10, 92 S.Ct. 630, 30 L.Ed.2d 686 (1972). In Feigin, we applied Wright and Miller's test for determining whether a would-be intervenor's interest is adequately represented. 19 P.3d at 31; see also Meridian, 266 P.3d at 407; maj. op. 1 12.
127 As we noted in Meridian, Wright and Miller divide the adequacy of representation inquiry into three categories:
[1] If the interest of the absentee is not represented at all, or if all existing parties are adverse to the absentee, then there is no adequate representation. [2] On the other hand, if the absentee's interest is identical to that of one of the present parties, or if there is a party charged by law with representing the absentee's interest, then a compelling showing should be required to demonstrate why this representation is not adequate. [8] But if the absentee's interest is similar to, but not identical with, that of one of the parties, a discriminating judgment is required on the circumstances of the particular case, although intervention ordinarily should be allowed unless it is clear that the party will provide adequate representation for the absentee.
7C Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1909 (8d ed. 2007).
1 28 Under this test, the showing required to establish inadequate representation varies depending on the extent to which the would-be intervenor's interest coincides with the interest of an existing party. On the one hand, if the interests conflict or fail to coincide at all, we conclude that the representation is inadequate as a matter of law. At the other extreme, if the interests are identical, then a "compelling showing" is required to demonstrate why the representation is inadequate. However, where the interests are similar but not identical, then the cireum-stances of the particular case must be considered; moreover, we generally favor intervention in this category, ordinarily allowing it unless the representation will clearly be adequate.
1 29 The majority characterizes Cherokee's interest as "minimizing damage to its water rights." Maj. op. T14. It then concludes that FMC's interest in minimizing damages for a potential malpractice judgment "coincides directly" with Cherokee's interest, such that "Cherokee has the same interest that FMC would have in this case." Id. (emphasis added). Because the majority perceives these interests as identical, the majority concludes that FMC falls into the see-ond category of the Wright and Miller test, and therefore that FMC must make a "compelling showing" why Cherokee's representation would not be adequate. Id. T 15.
€30 In my view, the majority compares Cherokee's and FMC's interests without giving due consideration to the related legal malpractice action, in which Cherokee's and FMC's interests clearly do not coincide, and in which damages are premised on the outcome of this litigation. I agree that FMC's interest in this litigation is to minimize any damages award entered against it in the legal malpractice action. However, although Cherokee presumably desires to minimize the loss of its water rights in this action, its core interest is not that narrow; rather, its *1176interest is in providing water to its landowners and residents. FMC's and Cherokee's interests overlap somewhat because both interests would be furthered by minimizing the loss of Cherokee's water rights under its stipulation with Upper Black Squirrel Creek Ground Water Management District. See id. 14. Yet Cherokee's interest also would be furthered by seeking damages from FMC to cover its loss of those water rights, and it has no interest at all in minimizing its potential damages against FMC for legal malpractice. Thus, Cherokee's and FMC's interests cannot be deemed identical.
181 FMC therefore falls into the third category because FMC's interest, although similar, is not identical to Cherokee's. As such, "intervention ordinarily should be allowed unless it is clear that the party will provide adequate representation for the absentee." - Meridian, 266 P.3d at 407 (quoting Wright, Miller & Kane, supra). In my view, it is not clear that Cherokee will provide adequate representation of FMC's interest because it does not necessarily have the incentive to do so, depending on how this litigation proceeds. Cherokee may ultimately decide that its interest is better served by shifting its effort and resources from minimizing its losses in this case to recovering those losses from FMC in the malpractice action. See Satriana, 41 P.3d at 712-13 (noting that litigation is "uncertain and costly" and holding that a legal malpractice plaintiff need not appeal the underlying case to win full damages against the defendant attorneys). Such a decision would further Cherokee's interest, yet undermine FMC's interest.
T32 At a minimum, under the cireum-stances presented here, there are reasonable doubts about whether Cherokee will adequately represent FMC's interest. As we noted in Meridian, Wright and Miller suggest that in the third category, "all reasonable doubts should be resolved in favor of allowing the absentee ... to intervene." 266 P.3d at 407 (quoting Wright, Miller & Kane, supra). Therefore, I would conclude that FMC is entitled to intervene as a matter of right. Accordingly, I respectfully dissent.
I am authorized to state that Justice RICE and Justice BOATRIGHT join in this dissent.

. No party has challenged the timeliness of FMC's motion.