United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
VIRGINIA M. KENDALL, U.S. DISTRICT COURT JUDGE
Holland, LLC (Holland) had an independent contractor
agreement with Worldwide Transportation Shipping Corp.
(Worldwide) at the time of John Finnegan's death, and
Worldwide agreed to indemnify Holland for injury claims
brought under worker's compensation. Holland is fearful
that if Plaintiff Hartford Underwriter's Insurance
Company (Hartford) prevails in this action, Worldwide will
not have the financial means to indemnify Holland for the
worker's compensation claims brought by the Finnegan
Estate. Holland filed the instant motion to intervene  in
Hartford's declaratory action in order to protect its
financial interests. For the reasons stated below, the motion
September 17, 2014, John Finnegan was killed in a workplace
accident in McCook, Illinois. (Dkt. 35-1 at 41). At the time
of his death, Finnegan was employed as a truck driver by
Worldwide. (Dkt. 36 at 2.) A few months prior to the
accident, near the end of June 2014, Worldwide entered into
an independent contractor agreement (the Trucking Contract)
with Holland, in which Worldwide agreed to “provide
pickup and delivery services as requested by [the] Rock
Island terminal manager.” (Dkt. 35-1 at
The Trucking Contract also provided, among other things, for
limited defense and indemnification from Worldwide to Holland
for “any liabilities, claims or demands… for
injuries or damages claimed under worker's compensation
or similar acts.” (Id. at 32.) In June 2014,
near the time Worldwide entered the Trucking Contract,
Worldwide also bought a Workers Compensation and Liability
Policy from Hartford, and the policy designated
Worldwide's address in Iowa. (Dkt. 1 at 5). The policy
was effective at the time of Finnegan's death.
Finnegan's wife Noreen Finnegan, acting on behalf of her
husband's estate (the Finnegan Estate), filed a claim for
benefits with the Illinois Worker's Compensation
Commission (IWCC) on August 5, 2015. (Id. at 38-39.)
On the first claim that she filed, she listed under
“Employer's name, ” Worldwide. (Id.)
The same day, she filed an amended version of the claim, this
time listing both Worldwide and Holland as the employers.
(Id. at 41-42.) Holland filed a Limited and Special
Appearance by Counsel at the IWCC on October 26, 2015. (Dkt.
44, Exh. B.)
February 18, 2016, Hartford filed a declaratory judgment
action in this Court against Worldwide and the Finnegan
Estate, (Dkt. 1 at 1), pursuant to 28 U.S.C. §§
2201 and 2202 seeking a declaration that it owes no duty to
defend or indemnify Worldwide or to pay insurance benefits to
the Finnegan Estate because the claim was brought outside of
(Id. at 9-10); or alternatively, that Hartford owes
no duty to defend or indemnify Worldwide or to pay insurance
benefits to the Finnegan Estate as might be required under
any Iowa Worker's Compensation statute. (Id. at
10.) On July 14, 2016, Worldwide filed a third-party
complaint against Goetsch- Kay LLC d/b/a/ Sheridan &
Associates Agency (Sheridan) for negligent failure to procure
for Worldwide a policy that covered states other than Iowa.
(Dkt. 35 at 2.)
14, 2016, Hartford served Holland a subpoena for documents.
(Dkt. 44, Exh. D.) Counsel for Holland coordinated
transmission of documents, including the Trucking Contract,
to Hartford's legal team between August and November 1,
2016. (See Dkt. 44 at 5, Exh. D.) Holland asserts
that the subpoena was the first time that Holland became
aware of the Hartford action. (Dkt. 36 at 7.) On November 1,
2016, Holland filed the present Motion to Intervene. (Dkt. 35
at 1.) Holland seeks leave to file an Answer and Affirmative
Defenses to the Hartford Action, and leave to file a
Crossclaim against Worldwide for breach of contract.
(Id. at 2.)
Intervention as of Right under Rule 24(a)(2)
seeking to intervene as of right must satisfy four
requirements: (1) the motion to intervene must be timely; (2)
the party seeking to intervene must claim an interest related
to the subject matter of the action; (3) the party seeking to
intervene must be so situated that the disposition of this
action threatens to impair or impede the party's ability
to protect that interest; and (4) the existing parties must
not be adequate representatives of the movant's interest.
Fed.R.Civ.P. 24(a)(2); see also Ligas ex rel. Foster v.
Maram, 478 F.3d 771, 773 (7th Cir. 2007). The party
seeking intervention bears the burden of establishing each of
these elements. United States v. BDO Seidman, 337
F.3d 802, 808 (7th Cir. 2003).
timeliness requirement is a flexible one and is determined by
considering the totality of the circumstances, leaving much
to the sound discretion of the courts. See Shea v.
Angulo, 19 F.3d 343, 348-49 (7th Cir. 1994); Zurich
Capital Markets, Inc. v. Coglianese, 236 F.R.D. 379, 383
(N.D.Ill.2006) (St.Eve, J.) (“Determining whether a
motion for intervention is timely is ‘committed to the
sound discretion of the district judge.'”) (quoting
South v. Rowe, 759 F.2d 610, 612 (7th Cir. 1985)).
The test for evaluating timeliness essentially sets out a
reasonableness standard; potential intervenors need to be
reasonably diligent in learning of a suit that might affect
their rights and act promptly in response. See Heartwood,
Inc. v. U.S. Forest Service, Inc., 316 F.3d 694, 701
(7th Cir. 2003). Intervention is unavailable to the litigant
who “dragged its heels” after learning of the
lawsuit. United States v. City of Chicago, 870 F.2d
1256, 1263 (7th Cir.1989).
intervened in a reasonable period of time. Holland asserts
that it was on notice of the action when Hartford served the
subpoena in July 2016. (Dkt. 36 at 7.) At that point, Holland
began “searching its records and performing due
diligence to determine background” in the matter, and
filed three months later. See Dkt. 36 at 13.
Although Holland could have been more diligent in learning of
the action, there is only three months between when
Hartford asserts Holland should have known of the action (at
the time Hartford filed the complaint) and when Holland
asserts it learned of the action (when served the subpoena).
This is not a significant enough delay to find the motion
untimely. And, because Holland filed its motion to intervene
prior to the close of fact discovery, the prejudice to Hartford
clearly does not rise to the prejudice in cases in which
summary judgment had been decided, or the case had been
settled. See Humphrey v. United States, 787 F.3d
824, 826 (7th Cir. 2015) (motion to intervene filed after the
parties had already settled was untimely); see also CE
Design Ltd. v. King Supply Co., 791 F.3d 722,
725-726 (7th Cir. 2015) (same); See also Grochocinski v.
Mayer Brown Rowe & Maw, LLP, 719 F.3d 785, 798 (7th
Cir. 2013) (motion to intervene after grant of summary
judgment was untimely.). However, to show its motion was
timely, Holland must also demonstrate that it would be
prejudiced by the denial of the intervention. The Hartford
action will not affect Holland's rights to seek
indemnification from Worldwide. Although the Hartford action
may impact Worldwide's economic ability to indemnify,
Holland's economic interest in the outcome is not a basis
for intervention, as discussed in more detail below.
Interest Relating to Subject Matter of Lawsuit
fails to show a “direct, significant and legally
protectable” interest in the litigation. Reich v.
ABC/York-Estes Corp., 64 F.3d 316, 323 (7th Cir.1995).
Although Rule 24 does not define “interest, ” a
mere “economic interest” (i.e. being a creditor
of one of the parties) is insufficient. Flying J, Inc. v.
Van Hollen, 578 F.3d 569, 571 (7th Cir. 2009). A
“betting interest” in the outcome of the
litigation is not enough to establish the interest required
under Rule 24. See Fed. Ins. Co. v. Illinois Funeral
Dir.'s Ass'n, No. 09 C 1634, 2009 WL 2252200, at
*3 (N.D. Ill. July 29, 2009) (intervenor's concern that a
negative result in declaratory judgment action might affect
its ability to collect from a party it sought damages from in
a separate suit was a “speculative link, ”
“tenuous at best, ” and did not show “the
necessary protectable interest required for intervention as a
matter of right”); see also Chicago Import, Inc. v.
American States Ins. Co., No. 09-C-2885, 2010 WL 3385539
(N.D. Ill. Aug. 24, 2010) (intervenor's interest in
insurance policy ...