Blogs

Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: September 26, 2018

Parties Should Have Been Allowed to Intervene on Eve of Summary Judgment Motions

On September 19, 2018, the Second Department issued a decision in Roman Catholic Diocese of Brooklyn, N.Y. v. Christ the King Regional High Sch., 2018 NY Slip Op. 06131, holding that third parties should have been allowed to intervene on the eve of summary judgment motions, explaining:

Upon a timely motion, a person is permitted to intervene in an action as of right when, among other things, the representation of the person’s interest by the parties is or may be inadequate and the person is or may be bound by the judgment. In addition, the court, in its discretion, may permit a person to intervene, inter alia, when the person’s claim or defense and the main action have a common question of law or fact. However, it has been held under liberal rules of construction that whether intervention is sought as a matter of right under CPLR 1012(a), or as a matter of discretion under CPLR 1013 is of little practical significance and that intervention should be permitted where the intervenor has a real and substantial interest in the outcome of the proceedings. In exercising its discretion, the court shall consider whether the intervention will unduly delay the determination of the action or prejudice the substantial rights of any party.

Here, both MVP and CTKCE demonstrated that they have a real and substantial interest in the outcome of the litigation and that, although their respective interests are aligned with those of CTK and with each other, CTK cannot fully represent those interests. Moreover, while MVP and CTKCE, as nonparties, would not be directly bound by a judgment in favor of the Diocese and against CTK, if the Diocese prevailed, CTK would be required to break its lease with CTKCE, which would in turn be forced to break its sublease with MVP. Under these circumstances, MVP and CTKCE should have been allowed to intervene.

Although approximately 3½ years had passed between the commencement of this action and the filing of MVP’s and CTKCE’s separate motions to intervene, the matter had proceeded only to the summary judgment stage. Furthermore, the Diocese failed to point to any substantial prejudice it would suffer if MVP and CTKCE were permitted to intervene, and it is unlikely that substantial additional disclosure will be required.

(Internal quotations and citations omitted).

Intervention is where a non-party asks to join an existing lawsuit. Intervention can be an important tool for ensuring that your rights are not prejudiced by a decision in a lawsuit to which you are not a party. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have a question about whether a lawsuit to which you are not a party will affect your rights.

Click here to subscribe to this or another of Schlam Stone & Dolan’s blogs.

View posts