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Great American Assurance Co. v. Travelers Property Casualty Co.

January 19, 2007

GREAT AMERICAN ASSURANCE COMPANY, ET AL, PLAINTIFFS,
v.
TRAVELERS PROPERTY CASUALTY COMPANY, ET AL, DEFENDANTS.



The opinion of the court was delivered by: Sandra S. Beckwith, Chief Judge United States District Court

ORDER

Before the Court is Waymon Canady's Motion to Intervene (Doc. 10) and his motion to dismiss (Doc. 11). Plaintiffs oppose Canady's motions (Docs. 14 and 15), and Canady has filed replies (Docs. 16 and 17). The Court grants the motions.

FACTUAL BACKGROUND

Plaintiffs are three insurance companies: Great American Assurance Company, American National Fire Insurance Company, and Ohio Casualty Insurance Company. Great American and American National Fire issued policies to a company called Telecommunications Cable, Inc. ("TCC"), with effective dates of 02/19/2000 to 02/19/2001. Ohio Casualty assumed the duties and obligations under both policies subsequent to their issue.

Waymon Canady was working as a TCC employee on January 5, 2001, installing digital cable service in Zanesville, Ohio, when he was seriously injured. Mr. Canady subsequently filed a complaint in Ohio state court against TCC, Time Warner, Inc. and others, seeking damages for his injuries. According to Time Warner's counterclaim in this action (Doc. 5, ¶2-3), Time Warner subcontracted with TCC in 2000 to upgrade its cable system in the Zanesville area. One of the conditions of that contract was that TCC's insurers name Time Warner as an additional insured on TCC's policies. (An "Accord" Certificate naming Time Warner as an additional insured is attached to Time Warner's counterclaim as Exhibit A.) Mr. Canady was apparently injured during the course of TCC's performance of its contract with Time Warner.

According to Plaintiffs, Canady obtained a default judgment against TCC on his employer intentional tort claim. On June 16, 2006, an Agreed Final Judgment against Time Warner was entered in Canady's suit. The Final Judgment states that the trial court heard testimony and evidence concerning Canady's damages and expenses, and found that the resolution of his claims against Time Warner was in good faith and was not the result of any collusion. A judgment of $850,000 was entered against Time Warner based on its vicarious liability for TCC's negligence. The judgment explicitly permits Canady to collect only $50,000 of that amount directly from Time Warner. Canady is required to pursue "further collection only against insurance policies issued to Defendant TCC that name Defendant Time Warner as an additional insured." (Doc. 10, Exhibit 1 at p. 2.)

Plaintiffs filed this action against Time Warner and Travelers on June 20, four days after entry of the Agreed Final Judgment in Canady's personal injury action. Their complaint alleges that Travelers insured Time Warner under a CGL policy that was in effect on the date of Canady's accident. Plaintiffs deny that Time Warner is an additional insured under their policies, and seek a declaratory judgment to that effect. Plaintiffs also seek a declaration of the rights and obligations of Plaintiffs and Travelers vis-a-vis Time Warner's liability to Canady, in the event that Time Warner is entitled to any coverage under Plaintiffs' policies. Plaintiffs did not name Canady as a party to this litigation.

On July 21, 2006, Canady filed a second complaint in Muskingum County common pleas court against Ohio Casualty and Shoff Darby Companies, alleged to be Ohio Casualty's agent. Shoff Darby issued the Accord Certificate of Insurance listing Time Warner as an additional insured on TCC's policies. Canady's state court complaint alleges that Ohio Casualty was notified of his original personal injury litigation and refused to defend Time Warner, and has refused to pay Canady's judgment despite his demands for payment. Canady seeks a judgment against Ohio Casualty and Shoff of his unpaid judgment of $800,000, plus other interest and other allowable relief.

ANALYSIS

1. Motion to Intervene

Fed. R. Civ. P. 24(a)(2), upon which Canady's motion is premised, requires the court to grant intervention . . . when the applicant claims an interest relating to . . . 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.

The Sixth Circuit applies a four-part test to Rule 24 intervention motions, requiring the applicant to demonstrate (1) a timely motion, (2) a substantial legal interest, (3) impaired ability to protect that interest without intervention, and (4) inadequate representation by the existing parties. See Michigan State AFL-CIO v. Miller, 103 F.3d 1240, 1245 (6th Cir. 1997).

Canady argues he meets all four requirements. He has timely sought intervention; Plaintiffs' complaint was filed on June 20, and his motion was filed on September 8. No discovery has taken place and a Rule 26 conference has not yet been held. Canady also has a substantial legal interest in this case. Given the facts concerning the underlying state court litigation, Canady's ability to collect his $800,000 judgment will likely be decided in this coverage action.

Canady also argues that his interest will be substantially impaired if he is not permitted to intervene, as any final judgment in this case will be binding upon him under Ohio Rev. Code 3929.06(c)(2). Finally, Canady argues that the current parties to this case will not adequately represent him. Time Warner has ...


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