United States District Court, S.D. California
ORDER GRANTING MOTION TO INTERVENE [Doc. No.
Michael M. Anello United States District Judge
parties TDL Global Ventures (“TDL”) and Losany
Enterprises, LLC (“Losany”) (collectively,
“the Intervenors”) move to intervene in this
action pursuant to Federal Rule of Civil Procedure 24.
See Doc. No. 52. The Court found this matter
suitable for determination on the papers and without oral
argument pursuant to Civil Local Rule 7.1(d)(1). For the
reasons set forth below, the Court GRANTS
the Intervenors' motion to intervene.
2, 2015, Plaintiff Ace Business Solutions, LLC
(“Plaintiff” or “Ace”) filed this
interpleader action pursuant to 28 U.S.C. § 1335.
See Doc. No. 1. Plaintiff requests the Court
determine, as between Defendants Global Marketing &
Development, Inc. (“GMD”) and Awesome
Enterprises, LLC (“Awesome”), the rights to a
particular sum of money (“Net Distribution”) that
Plaintiff has collected. Plaintiff Ace is a debt processing
company that provides processing services for GMD pursuant to
an agreement between the two entities. See Doc. Nos.
1, 24. Ace, as part of its services, collects payments from
consumers and pays portions of those funds to GMD. Plaintiff
also used to provide processing services to a company called
5STAR, Inc. (“5STAR”), which was originally owned
by Awesome. See Doc. Nos. 1, 21. At some point,
acquired 5STAR and thereby acquired 5STAR's servicing
obligations. See Doc. Nos. 1, 21. Awesome disputes
the propriety of this transaction and as a result, Awesome
and GMD allegedly began to give Ace conflicting instructions
regarding to whom Ace should distribute collected funds.
on June 17, 2015, Ace alleges it received notice from
attorneys who represent organizations that were previously
affiliated with 5STAR, and who asserted there were certain
“improprieties related to the transfer of ownership of
5STAR to GMD and/or parties affiliated with GMD, ”
which affected GMD's entitlement to funds that Ace would
typically transfer to GMD. On June 26, 2015, Plaintiff
received notice from GMD requesting Plaintiff transfer to it
the entire Net Distribution. Awesome claims a portion of the
Net Distribution, and asserts GMD is entitled to none of it
because GMD committed fraud and “misappropriate[d]
companies and assets belonging to Awesome and businesses
related to Awesome, [and] the revenue from debt invalidations
businesses belonging to businesses related to Awesome.”
See Doc. No. 26.
both GMD and Ace have filed counterclaims against one another
arising out of the agreement between them. See Doc.
Nos. 9, 16. GMD has filed a counterclaim against Ace alleging
breach of contract and conversion. Ace has filed a
counterclaim against GMD asserting claims for breach of
contract and breach of the covenant of good faith and fair
January 1, 2016, the Intervenors filed a motion to intervene
in this action. See Doc. No. 21. This Court
denied the Intervenors' initial motion on April 14, 2016.
See Doc. No. 30. The Intervenors had “made
certain claims against GMD” in the District Court of
Maryland concerning both the Intervenors' “rights
to some of the interplead monies to which GMD claimed to be
entitled” as well as a breach of contract claim.
See Doc. No. 52, p. 5; see also Doc. No.
55, p. 7. When the Intervenors filed the first motion to
intervene, the Maryland action was still pending.
See Doc. No. 52, p. 5. Both Ace and GMD
opposed the Intervenors' first motion to intervene.
See Doc. Nos. 24, 25.
the Intervenors brought this second motion to intervene, the
District Court of Maryland entered a final judgment in favor
of the Intervenors against GMD for $1, 500, 000.00.
See Doc. No. 52, p. 5. Furthermore, the District
Court in Maryland issued a Writ of Execution to the
Intervenors “as to the monies to which GMD is
entitled” in this case. See Id. Purportedly
based on the outcome of the Maryland case, GMD assigned to
the Intervenors “jointly, all rights and entitlements
to . . . [a]ny monies that presently are or will be due to
GMD from the interplead monies in [the instant
action].” See Doc. No. 55, Lubar Decl., Exh.
2. GMD joined in the Intervenors' second motion to
intervene and claimed it “does not intend to spend any
significant money and time defending the [interpleader
action] and expects Intervenors to assert all rights to which
GMD would have been entitled.” See Doc. No.
Rule of Civil Procedure 24 governs motions to intervene in
federal court. Rule 24 states that a court must, upon a
timely motion, allow intervention of right where the movant:
(1) is given an unconditional right to intervene by a federal
statute; or (2) 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
Fed. R. Civ. P. 24(a). The Ninth Circuit has interpreted Rule
24(a) as requiring an applicant meet all of the following
(1) the application for intervention must be
timely; (2) the applicant must have a
‘significant protectable' interest relating to the
property or transaction that is the subject of the action;
(3) the applicant must be so situated that the disposition of
the action may, as a practical matter, impair or impede the
applicant's ability to protect that interest; and (4) the
applicant's interest must not be adequately represented
by the existing parties in the lawsuit.
Arakaki v. Cayetano, 324 F.3d 1078, 1084 (9th Cir.
2003), as amended (May 13, 2003); Southwest
Center for Biological Diversity v. Berg, 268 F.3d 810,
817-18 (9th Cir. 2001); C.S. ex rel. Struble v.
California Dep't of Educ., No. 08-CV-0226-W(AJB),
2008 WL 962159, at *2 (S.D. Cal. Apr. 8, 2008). An applicant
has a significant protectable interest where its interest is
protected under some law, and there is a relationship between
its legally protected interest and the plaintiff's
claims. See Donnelly v. Glickman, 159 F.3d 405, 409
(9th Cir. 1998). The resolution of the plaintiff's claims
must actually affect the applicant, but if there would be a
substantial effect, the applicant “should, as a general
rule, be entitled to intervene.” Id.;
Southwest Center for Biological Diversity v. Berg,
268 F.3d 810, 822 (9th Cir. 2001).
alternative, courts may allow permissive intervention under
Rule 24(b). The court may allow ...