Court Opinion

ID: 21040
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:40:30+00
Date Added: 2024-06-11T15:04:47.513971
License: Public Domain

UNITED STATES COURT OF APPEALS
                       For the Fifth Circuit

                           No. 99-40541
                         Summary Calendar

                          LARRY SKINNER,

                                               Plaintiff-Appellee,

                              VERSUS

           WESLACO INDEPENDENT SCHOOL DISTRICT; ET AL,

                                                         Defendants,
and

     ROYSTON, RAYZOR, VICKERY & WILLIAMS, Limited Liability
Partnership

                                                   Movant-Appellant,

          Appeal from the United States District Court
               For the Southern District of Texas
                          (M-97-CV-240)

                         June 7, 2000

Before DAVIS, EMILIO M. GARZA, and DENNIS Circuit Judges.

PER CURIAM:*

  *
   Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
      This   is    an   appeal   from    the    district   court’s      denial   of

Appellant Royston, Rayzor, Vickery & Williams, LLP’s (“Royston”)

motion to intervene.        The district court denied Royston’s motion,

finding that the motion was untimely, that Royston had no interest

to protect, and that Royston’s ability to protect its interest was

not impaired.      For the reasons that follow, we reverse.

      Appellee Larry Skinner filed an employment discrimination suit

against the Weslaco Independent School District (“Weslaco”) in

1997.   Initially, Skinner selected Larry Watts to represent him in

this matter.       Subsequently, however, Watts withdrew and Skinner

retained Royston as substitute counsel. On March 20, 1998, Skinner

and   Royston     entered   into   a    formal      contingency   fee   agreement

promising Royston the greater of 40% of the total recovery from the

proceeds of any settlement or judgment, or the amount of attorney’s

fees awarded by the court. This relationship also proved fleeting,

and on April 29, 1998, Skinner terminated Royston.

      After firing Royston, Skinner retained Glenn Romero.                Skinner

soon fired Romero and rehired Watts, his original attorney.                  With

the assistance of Watts, Skinner and Weslaco reached a settlement

agreement for $75,150.       Skinner then terminated Watts, temporarily

derailing the settlement.          Some time thereafter, Skinner, acting

without representation,          obtained      an   identical   settlement   from

Weslaco.

the limited circumstances set forth in 5TH CIR. R. 47.5.4.

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     On February 1, 1999, Weslaco filed an advisory with the

district court indicating that the parties had reached a settlement

agreement and that Skinner was not represented by counsel.                  One

week later, Royston filed a motion to intervene as of right in

order to recover attorney’s fees for legal work performed on

Skinner’s behalf.

     In order to intervene as a matter of right under Fed R. Civ.

P. 24(a)(2), a party must meet “each of the four requirements of

the rule.”    Keith v. St. George Packing Co., Inc., 806 F.2d 525,

526 (5th Cir. 1986).     First, the applicant must timely file the

application for intervention.         Second, the applicant must have an

interest relating to the property or transaction which is the

subject of the action.        Third, the applicant must be so situated

that the disposition of the action may, as a practical matter,

impair or impede his ability to protect the interest.              Fourth, the

applicant’s   interest   must    be   inadequately     represented     by   the

existing parties to the suit.         Id.

     In this case, Royston clearly possesses an interest in the

subject of the underlying action. As we noted in Valley Ranch

Development Co., Ltd v. FDIC, 960 F.2d 550, 556 (5th Cir. 1992), “a

discharged    lawyer   does    have   an    interest   [in   the   underlying

litigation] for the purposes of intervention.” See also Keith, 806

F.2d at 526; Gaines v. Dixie Carriers, 434 F.2d 52, 54 (5th Cir.

1970). Further, this Court has held that a firm with a contingency

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agreement is “so situated that the final disposition of the action

may as a practical matter impair or impede its ability to protect

that interest.”    Gaines v. Dixie Carriers, Inc., 434 F.2d 52, 54

(5th Cir. 1970).   Finally, no one disputes that the parties to the

underlying dispute cannot and will not adequately protect Royston’s

interest.   Only the question of timeliness remains.

     This Court has explained that although “[t]imeliness must be

determined from all the circumstances in the case,” Stallsworth v.

Monsanto Co., 558 F.2d 257, 263 (5th Cir. 1977), four factors should

guide courts in their determination:

       (1) the length of time during which the would-be
       intervenor actually knew or reasonably should have
       known of his interest in the case before he petitioned
       for leave to intervene;
       (2) the extent of the prejudice that the existing
       parties may suffer as a result of the would-be
       intervenor’s failure to apply for intervention as soon
       as he actually knew or reasonably should have known of
       his interest in the case;
       (3) the extent of the prejudice that the would-be
       intervenor may suffer if his petition for leave to
       intervene is denied; and
       (4) the existence of unusual circumstances militating
       either for or against a determination that the
       application is timely.

Association of Professional Flight Attendants v. Gibbs, 804 F.2d

318, 320-21 (5th Cir. 1986), citing Stallworth, 558 F.2d at 263.

Of these four “Stallworth” factors, courts should treat prejudice

to existing parties as the most important consideration.        See

McDonald v. E.J. Lavino Co., 430 F.2d 1065, 1073 (5th Cir. 1970).

     In denying Royston’s motion, the district court did not

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consider any of the four elements other than the length of time

between the date Royston became aware of its need to intervene and

the date of its actual intervention.         The court stated simply that

“it’s been over a year here before you all file your intervention

here” and “I’ve been ready to enter judgment.”

      Because of the brevity of the district court’s findings we

must apply a de novo standard of review.            Although “normally we

review a finding of timeliness under the abuse of discretion

standard,” we must review de novo “when the district court fails to

articulate reasons for its ultimate determination as to timeliness”

or fails to analyze the Stallsworth elements.            Edwards v. City of

Houston, 78 F.3d 983, 1000 (5th Cir.1996).         See also Ceres Gulf v.

Cooper, 957 F.2d 1199, 1202 n.8 (5th Cir. 1992)(“Normally we review

the district court’s findings on timeliness under the abuse of

discretion standard. Here, however, we can only review de novo its

ultimate determination, because . . . it did not provide findings

on the intervention factors.”).

      Applying a de novo standard of review, we conclude that the

district court erred in concluding that Royston failed to intervene

timely.    This Court has repeatedly stressed that hardship to

existing parties is the most important consideration, see, e.g.,

Jones v. Caddo Parish School Bd., 735 F.2d 923, 946 (5th Cir. 1984),

and that “this may well be the only significant consideration when

the   proposed   intervenor   seeks       intervention   of   right.”   See

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McDonald,    430    F.2d       at    1073.       Skinner       has       simply     failed     to

demonstrate       any   hardship      other        than   the       fact       that    Rayzor’s

intervention      may     diminish     his       stake    in    the       settlement.          In

McDonald, this Court faced a motion to intervene under similar

circumstances       and    concluded         that     where         a    party’s       proposed

intervention “was for the limited purpose of staking out a claim to

a portion of the proceeds rather than an attempt to litigate any

prejudgment issue, we are utterly unable to perceive any way in

which any party could have been prejudiced by the timing of the

motion.”    Id. at 1073. As such, Skinner has failed to show that

Royston’s late intervention would prejudice him in any way.

     Royston, on the other hand, will likely suffer prejudice if

the district court does not permit him to intervene.                                If Royston

cannot   intervene        in   the    instant       suit,      he       will   be     forced   to

institute a separate action.                 This Court has previously found

prejudice under almost identical circumstances.                            See Gaines, 434

F.2d at 54; see also United States v. Eastern Transmission Corp.,

923 F.2d 410 (5th Cir. 1991)(noting that prejudice existed in Gaines

because “discharged firm would have had to initiate a subsequent

action to collect the fees allegedly generated in the existing

litigation”). Accordingly, the district court erred in holding that

Royston failed to intervene in a timely manner.

     For    the    above       reasons,      the    district            court’s     denial     of

Appellant’s motion to intervene is REVERSED.                         The case is REMANDED

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to the district court for further proceedings consistent with this

opinion.

REVERSED and REMANDED.

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