Free Motion to Intervene - District Court of Colorado - Colorado

Case 1:01-cv-00275-JLK

Document 811

Filed 04/27/2006

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 01-cv- 00275- JLK

DOMINICK P AOLONI , ft. aI.,
Plaintiffs

DONALD I. GOLDSTEIN, ft. aI.,
Defendants.

and, NBSA , LLC, ft. aI.,
Relief Defendants.

CHICAGO INSURANCE COMPANY' S UNOPPOSED MOTION TO INTERVENE AND MOTION FOR EXTENSION OF TIME TO RESPOND
Chicago Insurance Company, appearing through its undersigned counsel, moves pursuant

to Fed. R. Civ. P. 24(a)(2) to intervene as a third party plaintiff and to submit the attached
declaratory judgment complaint , and also moves for leave to respond to Plaintiffs ' Motion to

Enforce Settlement Agreement , filed on April 13 2006 on or before May 19
Chicago Insurance Company states as follows:

2006.

As grounds

This is an action in which Plaintiffs brought claims against various defendants including the law firm of Hyman Lippitt , P. C. and a number of Hyman Lippitt attorneys (the

Hyman Lippitt Defendants ), arising out of certain investments made by Plaintiffs. Chicago
Insurance Company had issued a professional liability insurance policy to the Hyman Lippitt
Defendants , but disputed that the insurance policy covered the claims made by Plaintiffs. The

policy was subject to a $5 million limit ofliability.

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On September 16 ,

2005 , Plaintiffs reached a settlement with the Hyman Lippitt

Defendants and Chicago Insurance Company. As part of that settlement , Chicago Insurance
Company agreed to pay the remaining policy limits to Plaintiffs. The policy was a diminishing

policy, such that defense costs were subtracted from the liability limits. As the policy limits
were $5 million and defense costs totaled $829 137.
payment to Plaintiffs of $4 , 170 862 , 10.

, Chicago Insurance Company made

Plaintiffs admittedly understood at the time they entered into the settlement

agreement that defense costs were deducted from liability limits. Nevertheless , Plaintiffs have
now demanded that Chicago Insurance Company pay an additional $829 137.
, arguing that a

typographical error in a reservation of rights letter had the effect of changing the terms of the

policy. Plaintiffs have also filed with this Court a Motion to Enforce Settlement Agreement
requesting that the Court order Chicago Insurance Company - who is not a party to this action
to pay an additional $829 137. 92.

Fed. R. Civ. P. 24(a)(2) provides that , upon timely application , anyone shall be
permitted to intervene in an action as of right " when the applicant claims an interest relating to

the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to
protect that interest , unless the applicant's interest is adequately represented by existing parties.
Chicago Insurance Company is interested in the outcome of this case , and should

be allowed to intervene as of right , for two reasons. First , Plaintiffs have requested monetary

relief against Chicago Insurance Company. Due process demands that Chicago Insurance
Company be heard before the Court renders any decision that would purport to bind Chicago

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Insurance Company. Second , the interpretation of the insurance contract advanced by Plaintiffs
is contrary to Chicago Insurance Company s understanding of the contract , and would

potentially affect other contracts issued by Chicago Insurance Company. Chicago Insurance
Company has an interest in these issues of contract interpretation.

None of the existing parties shares these concerns with Chicago Insurance

Company. Chicago Insurance Company s ability to protect its financial interests in the
settlement agreement , and its interests in the interpretation of the subject insurance contract

would not be adequately protected unless Chicago Insurance Company is allowed to intervene in
this case. Intervention therefore should be allowed.
Austalt v.

See , e. g., Werbungs Und Commerz Union
Y. 1991) (motion to

Collectors ' Guild, Ltd. 782 F. Supp. 870 , 874- 75 (S.

intervene granted where the plaintiff moved to collect on a supersedeas bond posted by the
defendant as part of a settlement agreement; the intervenor had procured the letter of credit

which secured the bond and was the owner of the collateral securing the letter of credit , and no party could adequately represent the intervenor s interest , particularly since the defendant's
interest was in having the amount of the bond paid so that the defendant's obligations under the
settlement agreement would be satisfied).
Currently, May 5 , 2006 is the deadline by which responses to the Motion to

Enforce Settlement Agreement must be filed. As Chicago Insurance Company is not yet a party
to this action , Chicago Insurance Company requests leave to respond to Plaintiffs ' Motion to

Enforce Settlement Agreement , filed on April 13 , 2006 , and requests that it be allowed to file its
response by May 19 , 2006 , or such later time as an Order is entered permitting intervention.

A proposed declaratory judgment complaint in intervention is attached.

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Pursuant to D. C. Colo. L. Civ. R. 7. , counsel for Chicago Insurance Company

has conferred with John Hutchings , counsel for Plaintiffs , and Plaintiffs have no objection to the
intervention and extension of time requested herein.

WHEREFORE , Chicago Insurance Company respectfully requests that the Court enter an

Order (i) allowing it to intervene; (ii) accepting the attached pleading for filing as of the date of
the Order; and (iii) granting Chicago Insurance Company leave to respond to Plaintiffs ' Motion
to Enforce Settlement Agreement on or before May 19 , 2006. Respectfully submitted this 27th day of April , 2006.

sf Carolyn 1. Fairless Carolyn 1. Fairless Wheeler Trigg Kennedy LLP 1801 California Street , Suite 3600 Denver , Colorado 80202 Telephone: (303) 244- 1800
Facsimile: (303) 244- 1879

E-mail: fairless~wtklaw. com

Attorney for Intervenor Chicago Insurance Company

Case 1:01-cv-00275-JLK

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CERTIFICATE OF SERVICE

(CM/ECF)

I hereby certify that on April 27 , 2006 , I electronically filed the foregoing CHICAGO INSURANCE COMPANY' S UNOPPOSED MOTION TO INTERVENE AND MOTION FOR EXTENSION OF TIME TO RESPOND with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses:
Brent Ross

Cohen

bcohen~rothgerber. com

Robert Arthur Dill
bobdill~dillanddill. com tdorau~dillanddil1. com Daniel J. Garfield dgarfield~bhf- Iaw. com krees~bhf- Iaw. com

Adam Joseph Goldstein
agoldstein~wsteele. com nmarion~wsteele. com

Richard D. Greengard rgreengard~ir- Iaw. com aknight~ir- Iaw. com Dale R. Harris
dale. harris~dgslaw. com linda. ridding~dgslaw. com
Paul Franklin Hultin

hultin~wtklaw. com

hand~wtklaw. com

John Alonzo Hutchings
j hutchings~dillanddil1. com chuffman~dillanddill. com

Michael J. Pankow mpankow~bhf- Iaw. com

krees~bhf- Iaw. com

and served the following non- participants via US. Mail:

Christopher Kevin Leigh Barthe & Leigh , LLP 2455 East Sunrise Boulevard , Ste. #602 Ft. Lauderdale , FL 33304

Alan M. Loeb Davis , Graham & Stubbs LLP- Colorado 1550 Seventeenth Street , Ste. #500 Denver , CO 80202
sf Carolyn 1. Fairless by Janean C. Hart

Carolyn 1. Fairless Attorney for Chicago Insurance Company Wheeler Trigg Kennedy LLP 1801 California Street , Suite 3600 Denver , CO 80202
Telephone: (303) 244- 1800 Facsimile: (303) 244- 1879