Commercial Division Blog
Intervention Not Allowed Because of Lack of Substantial Interest in Litigation
On June 11, 2015, the First Department issued a decision in Acadia Realty L.P. v. Ringel, 2015 NY Slip Op. 04950, affirming a trial court decision denying a motion for intervention.
In Acadia Realty, the would-be intervenor ("RCG") sought to intervene in order to vacate a default judgment that had been entered against a group of defendants. The First Department affirmed the denial of the motion to intervene, explaining:
The default judgment has no res judicata effect on RCG because a default is not a determination on the merits.
Moreover, RCG has no real, substantial interest in the outcome of this litigation, since its right to recover on its loan was not cut off by the judgment. The fact that plaintiff might be paid before RCG in the related bankruptcy proceedings is an insufficient basis for RCG's intervention here. RCG has also failed to demonstrate that it has a meritorious defense; indeed, it raises no defenses of its own.
Nor is RCG an interested party. Further, judicial assistance is not required to avoid injustice, since the [defaulted] entities have twice tried, and failed, to vacate the judgment relying on the same arguments made here by RCG.
(Internal quotations and citations omitted).