Judge Serena R. Murillo, Case 20STCV26136 2023-01-04 Tentative Ruling

Judge: Serena R. Murillo, Case: 20STCV26136, Date: 2023-01-04 Tentative Ruling

Case Number: 20STCV26136 Hearing Date: January 4, 2023 Dept: 29

TENTATIVE

Proposed Intervenor New York Marine and General Insurance Company’s motion for leave to intervene is GRANTED.

Legal Standard

California Code of Civil Procedure section¿387, subdivision¿(a) provides that, “[u]pon¿timely application, any person, who has an interest in the matter in litigation, or in the success of either of the parties, or an interest against both, may intervene in the action or proceeding.¿ An intervention takes place when a third person is permitted to become a party to an action or proceeding between other persons, either by joining the plaintiff in claiming what is sought by the complaint, or by uniting with the defendant in resisting the claims of the plaintiff, or by¿demanding anything adversely to both the plaintiff and the defendant, and is made by complaint, setting forth the grounds upon which the intervention rests, filed by leave of the court and served upon the parties to the action or proceeding who have not appeared in the same manner as upon the commencement of an original action, and upon the attorneys of the parties who have appeared, or upon the party if he has appeared without an attorney, in the manner provided for service of summons or in the manner provided by Chapter 5 (commencing with Section 1010) Title 14 of Part 2.”¿

To establish a direct and immediate interest in the litigation for purposes of permissive intervention, a non-party seeking intervention must show that he or she stands to gain or lose by direct operation of the judgment, even if no specific interest in the property or transaction at issue exists.¿ (Simpson Redwood Co. v. State of California¿(1987) 196 Cal.App.3d 1192, 1201.)¿ “Whether the intervener’s interest is sufficiently direct must be decided on the facts of each case¿. . . .¿And section 387 should be liberally construed in favor of intervention.”¿ (Id.¿at p. 1200.)¿ “In order that a party may be permitted to intervene it is not necessary that his interest in the action be such that he will inevitably be affected by the judgment.¿ It is enough that there be a substantial probability that his interests will also be so affected.¿ ‘The purposes of intervention are to protect the interests of those who may be affected by the judgment¿. . . .’”¿ (Timberidge¿Enterprises, Inc. v. City of Santa Rosa¿(1978) 86 Cal.App.3d 873, 881-882 (citations and emphasis omitted).¿

Discussion

Proposed Intervenor seeks leave to intervene in this action on behalf of its insured, Luxcany Transport. Proposed Intervenor asserts Luxcany has gone out of business and is a suspended corporation and thus cannot legally appear on its own behalf.

Under California law, an insurance carrier who is not a party to an action can intervene on behalf of its insured when the insurance carrier could be subject to a subsequent action under Insurance¿Code¿section¿11580.¿ (See¿Reliance Ins. Co. v. Superior Court¿(2000) 84 Cal.App.4th¿383, 386,¿(“An insurer’s right to intervene in an action against the insured, for personal injury or property damages, arises as a result of Ins. Code section 11580.”).)¿¿“Section 11580 provides that a judgment creditor may proceed directly against any liability insurance covering the¿defendant, and¿obtain satisfaction of the judgment up to the amount of the policy limits.¿¿Thus, where the insurer may be subject to a direct action under Insurance Code section 11580 by a judgment creditor who has or will obtain a default judgment in a¿third party¿action against the insured, intervention is appropriate.”¿ (Id.;¿see also¿Jade K. v.¿Viguri¿(1989) 210 Cal.App.3d 1459, 1468¿(permitting an insurer to intervene in lawsuit to litigate liability and damage issues).) “‘Intervention may . . . be allowed in the insurance context, where third party claimants are involved, when the insurer is allowed to take over in litigation if its insured is not defending an action, to avoid harm to the insurer.’” (Western Heritage Ins. Co. v. Superior Court (2011) 199 Cal.App.4th 1196, 1205 (quoting Royal Indemnity Co. v. United Enterprises, Inc. (2008) 162 Cal.App.4th 194, 206).)

Proposed Intervenor’s counsel indicates that Proposed Intervenor was the insurer for Defendant Luxcany Transport. (Motion, Lenkov Decl., ¶ 3.) Proposed Intervenor’s counsel states that Luxcany Transport has gone out of business and therefore is a suspended corporation and remains suspended by the California Secretary of State. (Id., ¶ 4.)

As a suspended corporation, Luxcany Transport cannot file an answer and defend itself in this action. (Rev. & Tax Code, § 23301; Cal-Western Business Services, Inc. v. Corning Capital Group (2013) 221 Cal.App.4th 304, 310.) Proposed Intervenor thus may be exposed to liability pursuant to Insurance Code section 11580 for a judgment taken against Luxcany Transport. Proposed Intervenor has a sufficient interest to intervene in this action to protect its interest.

Additionally, Revenue and Taxation Code section 19719 specifically permits an insurer or counsel retained by an insurer on behalf of a suspended corporation to provide a defense for a suspended corporation in a civil action based upon a claim for personal injury, property damage, or economic losses against the suspended corporation. (Rev. & Tax Code, § 19719(b).)

Thus, the motion for leave to intervene is GRANTED.

Proposed Intervenor is ordered to give notice of this ruling.