Judge Lee W. Tsao, Case Number: 24NWCV00897, Date: 2024-06-05 Tentative Ruling

Judge: Lee W. Tsao, Case: 24NWCV00897, Date: 2024-06-05 Tentative Ruling

Case Number: 24NWCV00897 Hearing Date: June 5, 2024 Dept: C

ROARK FINANCIAL SOLUTIONS, INC. vs. LYNCO GRINDING COMPANY, INC.

CASE NO.: 24NWCV00897

HEARING: 6/5/24 @ 10:30 A.M.

#11

TENTATIVE RULING

Cross-Complainant-in-Intervention Arlene Griffin’s motion for leave to file answer-in-intervention and cross-complaint is DENIED.

Moving Party to give NOTICE.

Defendant Lynco Grinding Company, Inc. {“Lynco”) agreed to pay Plaintiff Roark Financial Solutions, Inc. {“Roark”) for finance and accounting consulting services. (Compl., ¶ 6.) They entered an agreement, and one of the terms stated that Lynco would not solicit, employ, or otherwise engage any of Roark’s current or former employees during the term of the agreement and for 24 months after the end of the agreement. (Compl., ¶ 7.) Otherwise, Lynco will pay liquidated damages. (Compl., ¶ 9.) Lynco solicited and then hired Arlene Griffin, Roark’s employee. (Compl., ¶ 11.) Roark sues Lynco for liquidated damages under a breach of contract theory.

Cross-Complainant in Intervention Arlene Griffin (“Griffin”) moves for leave to intervene.

“A nonparty shall petition the court for leave to intervene by noticed motion or ex parte application. The petition shall include a copy of the proposed complaint in intervention or answer in intervention and set forth the grounds upon which intervention rests.” (Code Civ. Proc., § 387, subd. (c).)

Timeliness

The party seeking to intervene must be timely, determined by the totality of circumstances, which includes the following factors: (1) stage of the proceedings; (2) prejudice to other parties from the delay in seeking to intervene; and (3) the reason for the delay. (Crestwood Behavioral Health, Inc. v. Lacy (2021) 70 Cal.App.5th 560, 574-576.) Prejudice to existing parties is the most important consideration. (Id. at 574.)

Griffin argues that the motion is timely because Roark filed the complaint in late March 2024.

Given the above, the Court finds the motion timely.

Mandatory Intervention

Intervention is mandatory or permissive. (Code Civ. Proc., § 387, subd. (d).) It is mandatory if the law confers an unconditional right to intervene, or¿the person seeking intervention claims an interest relating to the property or transaction that is the subject of the action and that person is so situated that the disposition of the action may impair or impede that person’s ability to protect that interest. (Code Civ. Proc., § 387, subd. (d)(1).) The exception is if that person’s interest is adequately represented by one or more of the existing parties. (Code Civ. Proc., § 387, subd. (d)(1).)

Griffin argues that intervention should be mandatory because it is her employment that resulted in litigation between Roark and Lynco. Griffin also argues that the transaction that gave rise to the litigation is the contract between Roark and Lynco, which resulted in her work assignment with Lynco. Griffin further argues that her interests are not adequately represented by existing parties, and she seeks to enforce her rights under California Business & Professions Code § 16600 to be free from the illegal enforcement of a noncompetition agreement by Roark against Lynco.

In opposition, Roark argues that the transaction that is the subject of the action does not have anything to do with Griffin. Her employment is between her and Lynco, and it has nothing to do with Lynco’s contractual obligations to Roark.

In reply, Griffin argues that she has an interest in challenging Roark’s prohibited “no hire” provision and any resulting damages would deter the financial success of her current employer.

The Court agrees with Roark’s arguments. It does not find intervention to be mandatory.

Permissive Intervention

Intervention is permissive if the person has an interest in the matter in litigation, or in the success of either of the parties, or an interest against both. (Code Civ. Proc., § 387, subd. (d)(2).)

Courts require the interest to be “direct and immediate” rather than “remote and consequential” or “purely speculative.” (Olson v. Hopkins (1969) 269 Cal.App.2d 638, 641; City of Burlingame v. County of San Mateo (1951) 103 Cal.App.2d 885, 890; Royal Indem. Co. v. United Enters., Inc. (2008) 162 Cal.App.4th 194, 212.) An interest is consequential and thus insufficient for intervention when the action in which intervention is sought does not directly affect it although the results of the action may indirectly benefit or harm its owner. (Cont'l Vinyl Prod. Corp. v. Mead Corp. (1972) 27 Cal. App. 3d 543, 550.) Whether the intervenor’s interest is sufficiently direct must be decided on the facts of the case. (Simpson Redwood Co. v. State of Cal. (1987) 196 Cal.App.3d 1192, 1200.) The issues of the action may not be enlarged by the proposed intervention. (Fireman’s Fund Ins. Co. v. Gerlach (1976) 56 Cal.App.3d 299, 303.)

A court has discretion to deny intervention when a direct interest is shown if the interests of the original litigants outweigh the intervenor’s concern, e.g. if intervention would delay the principal suit, require a reopening of the case for further evidence, delay the trial of the action, or change the position of the original parties. (In re Marriage of Kerr (1986) 185 Cal.App.3d 130, 134.)

Griffin argues that she has a direct and immediate interest because she is a senior executive for Defendant and in her role with the company, she has an interest in the success of Defendant.

The Court disagrees. Standing alone, Griffin’s role as an employee does not result in a direct and immediate interest in the litigation. Her interest is indirect.

The motion is DENIED.