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Penn-America Insurance Co. v. White Pines, Inc.

United States District Court, E.D. Virginia, Richmond Division

February 1, 2019

PENN-AMERICA INSURANCE COMPANY, Plaintiff,
v.
WHITE PINES, INC. d/b/a L.A.'s NIGHT CLUB, Defendant.

          MEMORANDUM OPINION

          M. HENNAH LAUCK UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court on three motions, two of which this Court will decide:[1] Defendant-Intervenor Bryan Polli's Motion to Intervene (the "Motion to Intervene"), (ECF No. 9), and Polli's Motion to Dismiss for Improper Venue or to Transfer to the Norfolk Division (the "Motion to Transfer"), (ECF No. 11). Plaintiff Perm- America Insurance Company ("Perm-America") responded to the Motion to Transfer, (ECF No. 12), but did not respond to the Motion to Intervene.[2] Accordingly, the matter is ripe for disposition. The Court dispenses with oral argument because the materials before it adequately present the facts and legal contentions, and argument would not aid the decisional process. The Court exercises jurisdiction pursuant to 28 U.S.C. § 1331.[3] For the reasons that follow, the Court will grant the Motion to Intervene and the Motion to Transfer.

         I. Procedural and Factual Background

         A. Procedural Background

         On September 24, 2018, Perm-America filed the Complaint in this Court seeking a declaration that it has no duty to defend or indemnify White Pines under a commercial general liability policy (the "Policy") Perm-America issued to White Pines. White Pines failed to respond to the Complaint by October 29, 2018.[4] On November 1, 2018, Perm-America requested the clerk to enter default against White Pines based on White Pines' failure to respond to the Complaint. On November 16, 2018, the clerk entered default against White Pines. On December 5, 2018, Polli filed the Motion to Intervene, the Motion to Transfer, and the Motion to Set Aside Entry of Default. Polli attached to the Motion to Intervene a Proposed Answer and Counterclaim. Penn-America responded to the Motion to Transfer and the Motion to Set Aside Entry of Default.

         B. Factual Background[5]

         On March 22, 2018, Polli filed a lawsuit in the Circuit Court for the City of Virginia Beach (the "Virginia Beach Circuit Court") against White Pines, seeking to hold White Pines liable for bodily injury Polli suffered while working as a manager for L.A.'s Night Club. White Pines owned and operated L.A.'s Night Club. After Polli filed his complaint in the Virginia Beach Circuit Court, White Pines contacted Perm-America requesting coverage under the Policy. On May 31, 2018, Perm-America denied coverage under the Policy.

         On August 28, 2018, Polli sent a demand letter to Perm-America asserting that coverage for White Pines applied to his injury and requesting coverage and damages. On September 11, 2018, Perm-America responded to Polli's demand by denying coverage. On that same day, Polli notified Penn- America of his intention to file a declaratory judgment action to resolve the matter. He requested a complete copy of the Policy.

         On September 24, 2018, Penn-America filed this declaratory judgment action. Penn-America did not notify Polli prior to filing this action and did not send Polli a copy of the Policy. On November 29, 2018, thirteen days after the clerk entered default against White Pines in this matter, Polli learned of Penn-America's declaratory judgment action.

         In his Proposed Answer and Counterclaim, Polli seeks a declaration that under the terms of the Policy, Penn-America has a duty to defend and a duty to indemnify White Pines in connection with the case Polli filed in the Virginia Beach Circuit Court.

         II. Motion to Intervene

         Polli asks to intervene in this case as a non-party pursuant to Federal Rule of Civil Procedure 24. Polli seeks a declaratory judgment that the Policy Penn-America issued to White Pines covers Polli's claims in Virginia Beach Circuit Court, thereby creating Penn-America's duty to defend and duty to indemnify White Pines in that state court action. Based on the record before it, and lacking any opposition, the Court concludes that Polli timely moved to intervene and that permitting intervention here would not prejudice Penn-America or White Pines. The Court will grant the Motion to Intervene.

         A. Legal Standard: Motion to Intervene

         Federal Rule of Civil Procedure 24 offers two avenues for a non-party movant to intervene in a case: (1) intervention as of right; and, (2) permissive intervention. Fed.R.Civ.P. 24. First, a non-party movant may intervene as of right "[o]n timely motion" if the movant "claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest." Fed.R.Civ.P. 24(a)(2). Under Rule 24 if the movant meets this standard, the Court "must" allow him or her to intervene. Fed.R.Civ.P. 24(a).

         Second, the Court may permit intervention "[o]n timely motion" if the non-party movant "has a claim or defense that shares with the main action a common question of law or fact." Fed R. Civ. P. 24(b)(1)(B). When considering a party's motion to intervene pursuant to Rule 24(b), the Court must consider "whether the intervention will unduly delay or prejudice the ...


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