Better Late than Never for this Intervenor

April 29, 2016

The recent Tennessee Court of Appeals case National Public Auction Company, LLC v. Cam Out, Inc . offers helpful analysis of what constitutes “timely application” under Tenn. R. Civ. P. 24.01 to be able to intervene in a pending lawsuit.

Background

This appeal involves a procedural issue that arose following the entry of a judgment. The underlying case involves the sale of vehicle inventory between an auction company and a dealer, and also the sale of a recreational vehicle from that inventory to an individual, William Anthony Hollin. The background of the case is complex, involving claims of breach of contract, misrepresentation, conversion, fraud in the inducement, violations of the Tennessee Consumer Protection Act, and violations of the duty of an auctioneer. There were related replevin and bankruptcy actions, as well as claims filed by secured creditors.

Ultimately, a judgment was entered following a trial of the matter. Hollin filed a complaint following entry of the judgment and sought to intervene, claiming that he was owed $44,500 from the money on deposit with the court or requesting good title to the recreational vehicle he purchased. The trial court permitted Hollin to intervene.

The dealer then filed a counter-claim against Hollin for conversion because he had retained possession of the vehicle throughout the dispute. Ultimately, the trial court dismissed the counter-claim and awarded $44,500 to Hollin. The dealer appealed.

Ruling

The key issue of interest in this case was whether the trial court erred in permitting Hollin to intervene in the lawsuit after a final judgment had been entered. Intervention as of right is governed by Rule 24.01 of the Tennessee Rules of Civil Procedure, which requires a “timely application.” Citing the case of American Materials Technologies, LLC v. City of Chattanooga, 42 S.W.3d 914, 916 (Tenn. Ct. App. 2000), the Court noted the factors that must be considered when determining whether a request to intervene is timely. The Court observed that, as a general rule, intervention after entry of a final judgment is prohibited. Depending on the facts and equitable considerations, however, a court may still permit intervention following entry of a final judgment.

In this instance, Mr. Hollin was the one who had deposited the $44,500 with the court and had done so without having to be ordered by the court to turn over the funds. It was important to the trial court that Hollin had a legitimate interest in these funds and that they were sitting on deposit with the court. In addition, the trial court observed that Hollin sought to intervene before the court decided how the funds should be distributed following entry of the judgment. Citing these reasons, the Court of Appeals found that the trial court did not abuse its discretion in permitting Hollin to intervene to pursue his claim to part of the funds on deposit in this case.

Commentary

The usefulness of the analysis in this case is limited in scope but may be helpful to a party seeking to intervene in a lawsuit late in the game.

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