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State Fund Mutual Insurance Co. v. Mead2/1/2005
Appellant insurance company challenges the district court's order denying its motion to intervene, arguing (1) that it is entitled to party status because respondents do not adequately represent and protect its workers' compensation subrogation interest in the lawsuit and (2) that it should be allowed to intervene so it can conduct discovery concerning the tortfeasor's assets. Appellant also moves to dismiss issues allegedly raised by respondent on appeal for the first time. Respondents separately argue that the district court erred in denying their request for attorney fees and costs. Because we conclude that the district court did not abuse its discretion by denying respondents' motion for attorney fees, we affirm in part. But because we conclude that the district court erred by denying appellant's motion to intervene as of right, we reverse in part and remand. Appellant's motion to dismiss issues on appeal is denied because it is now moot.
FACTS
In June 2000, respondent Delbert Doubrava sustained serious injuries as a result of a motor-vehicle accident caused by respondent Jeremy Mead. At the time of the accident, Doubrava was working in the course and scope of his employment with Kane Transport, Inc. (Kane).
Mead was driving a vehicle owned by his father and that was insured by Federated Mutual Insurance Company (FMIC), with a policy limit of $300,000. Kane was insured for workers' compensation coverage by appellant State Fund Mutual Insurance Company (State Fund). Soon after the accident, Delbert and his wife, Judy Doubrava, initiated both a workers' compensation claim against Kane and a personal-injury claim against Mead.
In mid-2003, the Doubravas secured a settlement offer from Mead for his adjusted policy limits in the amount of $296,390. The Doubravas moved for approval of the settlement and provided the district court with the results of an asset search that revealed that Mead "ha no assets of significance which could be pursued if a judgment in excess of the underlying insurance policy limits was obtained." Mead subsequently confirmed this information in a sworn affidavit.
State Fund moved to intervene in order to block the settlement and the potential exhaustion of its workers' compensation subrogation interest, asserting that Mead had other financial resources which had not yet been disclosed, including future wages. After the Doubravas' counsel was properly notified of State Fund's motion to intervene, they objected within 30 days, as required by Minn. R. Civ. P. 24.03.
The district court found that it was not reasonable to allow State Fund to intervene for the primary purpose of blocking the settlement offer and ultimately concluded that the motion to intervene was premature because the district court had not yet ruled on the settlement motion. In addition to denying State Fund's request for intervention, the court also denied its motions to compel discovery and for sanctions against the Doubravas' attorney. The court further denied the Doubravas' request for attorney fees. This appeal follows.
ISSUES
1. Did the district court err by denying State Fund's motion for intervention of right?
2. Did the district court abuse its discretion by denying the Doubravas' attorney-fees request?
ANALYSIS
I.
State Fund argues that it is entitled to intervene as a party because the Doubravas are not adequately representing and protecting its subrogation interest in the lawsuit. Orders concerning intervention as a matter of right, pursuant to Minn. R. Civ. P. 24.01, are subject to de novo review and are independently assessed on appeal. Norma
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