The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------X
SEA TOW SERVICES INTERNATIONAL,
INC.
Plaintiff,
ORDER
-against- 20-CV-2877(JS)(SIL)
TAMPA BAY MARINE RECOVERY, INC.,
a Florida corporation;
ERICH A. JAEGER; ABIGAIL JAEGER;
KATHLEEN MORENO; and
RAUL MORENO,
Defendants.
-----------------------------------X
APPEARANCES
For Plaintiff: Mitchell A. Stein, Esq.
Stein Law, P.C.
24 Woodbine Avenue, Suite 4
Northport, New York 11768
Scott Michael Kessler, Esq.
Akerman LLP
520 Madison Avenue, 20th Floor
New York, New York 10022
Steven R. Wirth, Esq.
Ackerman LLP
401 East Jackson Street, Suite 1700
Tampa, Florida 33602
For Defendants:
Tampa Bay Marine Recovery John Alexander Karol, Esq.
Inc., Erich A. Jaeger & Avi Strauss, Esq.
Abigail Jaeger Richard L. Rosen, Esq.
The Richard L. Rosen Law Firm, PLLC
110 East 59th Street, 23rd Floor
New York, New York 10022
Sarah Gogal Passeri, Esq.
Holland & Knight LLP
31 West 52nd Street
New York, New York 10019
Kathleen Moreno & Jason H. Baruch, Esq.
Raul Moreno Noel Boeke, Esq.
Paul Punzone, Esq.
Sarah Gogal Passeri, Esq.
Holland & Knight LLP
100 North Tampa Street, Suite 4100
Tampa, Florida 33602
For Proposed Defendant Jason H. Baruch, Esq.
Tampa Bay Marine & Towing, Noel Boeke, Esq.
Inc.: Paul Punzone, Esq.
Sarah Gogal Passeri, Esq.
Holland & Knight LLP
100 North Tampa Street, Suite 4100
Tampa, Florida 33602
SEYBERT, District Judge:
Before the Court is Proposed Defendant Tampa Bay Marine
Towing & Services, Inc.’s (“TBMT”) Motion to Intervene (“Motion”)
(Mot., ECF No. 48) and accompanying memoranda of law in support
thereof (TMBT Br., ECF No. 49; Reply, ECF No. 68). Defendants
Kathleen Moreno, Raul Moreno (the “Moreno Defendants”), Erich A.
Jaeger, Abby Jaeger and Tampa Bay Marine Recovery Inc. (“TBMR,”
and together with Erich A. and Abby Jaeger, the “Jaeger
Defendants”) do not oppose the Motion to Intervene. Plaintiff Sea
Tow Services, International, Inc. (“Plaintiff” or “Sea Tow”)
opposes intervention. (Opp., ECF No. 52.) For the reasons that
follow, the Motion is GRANTED.
BACKGROUND1
I. The Breakdown of Sea Tow and TBMT’s Relationship
Sea Tow is an international marine assistance provider
and franchisor of “Sea Tow” trademarks. Sea Tow provides
assistance for boaters on the water, including mechanical
assistance, towing and other services on a member and non-member
basis. In order to offer its service across the globe, Sea Tow
enters into franchise agreements like the one underpinning the
present dispute.
On January 29, 2015, the Moreno Defendants purchased
100% of Proposed Defendant TBMT, a Sea Tow franchisee for the Tampa
Bay Area of Responsibility (“AOR”), from Eugene N. Shute, IV
(“Shute”). (Am. Compl. ¶ 26.) The Moreno Defendants paid a
portion of the purchase price with a promissory note, payable by
TBMT and the Moreno Defendants to Shute (hereafter, the “Shute
Note”). (Id. ¶ 41.) The Moreno Defendants also secured three
separate loans from Synovus Bank to finance the acquisition of
TBMT and provide working capital for their investment (hereafter,
the “Synovus Loans”). (Id. ¶ 53.) On April 23, 2015, Sea Tow and
TBMT entered into a Franchise Agreement to govern TBMT’s
operations. (Id. ¶ 22; Franchise Agreement, Frohnhoefer Decl.,
Ex. C, ECF No. 15-2.)
1 The facts are drawn from the Amended Complaint (Am. Compl., ECF
No. 73) and the parties’ briefs.
The Franchise Agreement includes certain requirements
and provisions relevant to the present Motion. First, the Moreno
Defendants were required to personally guarantee TBMT’s
obligations under the Franchise Agreement. (Am. Compl. ¶ 28-29;
Franchise Agreement § 9.18) Second, the Franchise Agreement
provided that the franchisee would be deemed in default and the
agreement would terminate automatically in the event the
franchisee was subject to a suit to foreclose any lien or mortgage
against the franchisee or its franchised business and such suit
was not dismissed within thirty days. (Am. Compl. ¶ 32; Franchise
Agreement § 16.1.) Third, the Franchise Agreement further provided
that, upon termination of the agreement, TBMT would be required to
reimburse Sea Tow the pro rata portion of any membership fees
received.2 (Am. Compl. ¶ 33; Franchise Agreement § 17.11.)
Notwithstanding the apparent success of Proposed
Defendant TBMT as an enterprise, the Moreno Defendants struggled
to meet their financial obligations. First, sometime in 2017, the
Moreno Defendants and TBMT defaulted on the Shute Note, prompting
Shute to file a lawsuit to collect on it. (Am. Compl. ¶ 42.) To
settle the lawsuit, TBMT and the Moreno Defendants entered into a
2 Customers pay to be members of Sea Tow and to receive covered
services from Sea Tow franchisees. The membership fees are paid
to Sea Tow, which apportions the fees to the appropriate
franchisee, provided the franchisee is in good standing and not in
default under the franchise agreement. (Am. Compl. ¶¶ 30-31.)
new promissory note, with Sea Tow guaranteeing performance
thereunder (hereafter, the “New Note”). (Id.) In its Amended
Complaint, Sea Tow alleges that at the time it guaranteed the New
Note, it relied on “false representations made by TBMT and the
Moreno Defendants.” (Id. ¶ 114.) Second, the Moreno Defendants
defaulted on the Synovus Loans, prompting Synovus Bank to commence
a collection action on April 10, 2019 against the Moreno Defendants
and TBMT (the “Synovus Action”). (Id. ¶ 55.) The Synovus Action
was not dismissed within thirty days, which Sea Tow contends
triggered the automatic termination clause under the Franchise
Agreement. (Id. ¶¶ 57-58.) The Moreno Defendants dispute the
application and enforceability of the termination clause,
including in their motion to dismiss. (See, e.g., Moreno Defs.
Br., ECF No. 58 at 11-21.)
On October 31, 2019, Sea Tow, TBMT and the Moreno
Defendants executed a Termination and Relinquishment Agreement
(“TARA”) that provided Sea Tow would appoint a manager to oversee
the Tampa Bay AOR. (Am. Compl. ¶ 60.) On November 11, 2019, Sea
Tow appointed Tampa Bay Marine Recovery, Inc. (“TBMR”), owned and
operated by Kathleen Moreno’s son, Erich Jaeger, to provide
services to Sea Tow customers within the Tampa Bay AOR pursuant to
a Manager Delegation Agreement. (Id. ¶ 65.) By entering into the
Manager Delegation Agreement, Sea Tow believes it passed on the
opportunity to sell TBMT on the open market. (Id. ¶¶ 116-19.)
Shortly thereafter, on February 19, 2020, Proposed
Defendant TBMT filed for bankruptcy protection in the United States
Bankruptcy Court for the Middle District of Florida. (“Main
Bankruptcy Case,” No. 20-BK-1418.) In the Main Bankruptcy Case,
TBMT commenced an adversary proceeding against Sea Tow, disputing
Sea Tow’s termination of the Franchise Agreement, among other
actions. (“Florida AP,” No. 20-AP-390.) On December 7, 2020, the
Main Bankruptcy Case was dismissed, and the Florida AP was
dismissed without prejudice. (Main Bankruptcy Case, No. 20-BK-
1418, Order, ECF No. 155.)
II. Sea Tow Files Suit
On June 29, 2020, Sea Tow initiated this action against
the Moreno and Jaeger Defendants. Sea Tow alleges three counts
against the Moreno Defendants for (1) fraud, (2) breach of the
guaranty, and (3) breach of the implied covenant of good faith and
fair dealing. On September 4, 2020, the Moreno Defendants filed
a motion to stay these proceedings pending the Main Bankruptcy
Case (Mot. to Stay, ECF No. 32), but Magistrate Judge Locke denied
the motion shortly after the Main Bankruptcy Case was dismissed
(Min. Entry, ECF No. 46). Accordingly, Defendants sought leave to
file their motions to dismiss and answers to Sea Tow’s complaint,
and the Court set a briefing schedule. (See Dec. 23, 2020 Elec.
Order.)3 Shortly after Defendants requested leave to file motions
to dismiss, Proposed Defendant TBMT filed the present Motion to
Intervene, which Plaintiff, unsurprisingly, opposes. Further,
after TBMT filed its Motion to Intervene and the Defendants filed
their respective motions to dismiss, Plaintiff exercised its right
to amend its complaint. (ECF No. 74.)4
DISCUSSION
As each side delights in pointing out, the present
dispute has the parties disavowing earlier litigation positions.
In its motion to dismiss the Florida AP, for example, Sea Tow
argued that TBMT could and perhaps should raise the claims it
brought in the adversary proceeding in the instant lawsuit, through
intervention or otherwise. (See TBMT Br. at 4-5 (quoting Sea Tow’s
Reply in support of its motion to dismiss the Florida AP).) For
its part, TBMT declined to intervene in this action during the
3 The parties are also litigating a protective order. (E.g., Jan.
21, 2021 Elec. Order.)
4 The Court recognizes that Federal Rule of Civil Procedure 24(c)
requires “a pleading setting forth the claim or defense for which
intervention is sought,” and that, because Plaintiff filed its
Amended Complaint while the Motion to Intervene was pending, TBMT’s
accompanying pleading, filed with its Motion, does not address the
Amended Complaint. (See TBMT’s Proposed Answer, Affirmative
Defenses, and Counterclaims, ECF No. 49-1.) However, “nothing in
Rule 24(c) . . . obligates an applicant for intervention to amend
his proposed defenses and counterclaims while the motion to
intervene is still pending,” especially where, as here, the
accompanying pleading fulfills the purpose of Rule 24(c) by
informing the Court and the parties of the position the proposed
defendant intends to assert. Piedmont Paper Products, Inc. v.
American Financial Corp., 89 F.R.D. 41, 42-43 (S.D. Ohio 1980).
pendency of the Main Bankruptcy Case, preferring to raise its
claims in the bankruptcy case and related adversary proceedings.
Now the shoe is on the other foot, as it were, with TBMT seeking
to intervene as a defendant in this lawsuit and Sea Tow opposing
its request. The Court looks past the parties’ strategic
statements and to the substance of Federal Rule of Civil Procedure
24 (“Rule 24”) to resolve the present dispute.
I. Intervention as of Right
“The purpose of the rule allowing intervention is to
prevent a multiplicity of suits where common questions of law or
fact are involved. However, the rule is not intended to allow for
the creation of whole new suits by intervenors.” Washington Elec.
Coop., Inc. v. Mass. Mun. Wholesale Elec. Co., 922 F.2d 92, 97 (2d
Cir. 1990). There are two types of intervention under Rule 24:
(1) intervention as of right under Rule 24(a)(2), and
(2) permissive intervention under Rule 24(b). Rule 24(a)(2)
provides:
On timely motion, the court must permit anyone
to intervene who . . . claims an interest
relating to the property or transaction that
is subject to 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 that
interest.
Therefore, an applicant must establish the following to
intervene as a matter of right: “(1) a timely motion; (2) an
interest relating to the property or transaction that is the
subject of the action; (3) an impairment of that interest without
intervention; and (4) the movants’ interest is not adequately
represented by the other parties in the litigation.” Nu-Chem
Labs., Inc. v. Dynamic Labs., Inc., No. 96-CV-5886, 1998 WL
35180780, at *2 (E.D.N.Y. 1998) (Seybert, J.) (citing United States
v. Pitney Bowes, Inc., 25 F.3d 66, 70 (2d Cir. 1994)). The test
is “flexible,” and courts “generally look at all the factors
together rather than focus narrowly on a single one.” Basciani
Foods, Inc. v. Mid Island Wholesale Fruit & Produce, Inc., No. 09-
CV-4585, 2011 WL 17524, at *3 (E.D.N.Y. 2011) (Seybert, J.).
Nevertheless, “[f]ailure to satisfy any one of these requirements
is sufficient ground to deny the application.” Friends of E.
Hampton Airport, Inc. v. Fed. Aviation Admin., No. 15-CV-0441,
2016 WL 792411, at *4 (E.D.N.Y. 2016) (Seybert, J.) (quoting In re
Pandora Media, Inc., No. 12-CV-8035, 2013 WL 6569872, at *5
(S.D.N.Y. Dec. 13, 2013) (emphasis in original) (citation
omitted)). District courts have considerable discretion in
deciding motions to intervene under Rule 24(a)(2). See Basciani,
2011 WL 17524, at *3.
The parties dispute each requirement for intervention as
of right. The Court addresses their arguments in turn.
A. Whether TBMT’s Motion Is Timely
Courts have the “discretion to evaluate the timeliness
of a motion to intervene based on all the circumstances including,
‘(1) how long the applicant had notice of the interest before it
made a motion to intervene; (2) prejudice to existing parties
resulting from the delay; (3) prejudice to the applicant if the
motion is denied; and (4) any unusual circumstances militating for
or against a finding of timeliness.’” Keybank, Nat’l Ass’n v.
Quality Payroll Sys., Inc., No. 06-CV-3013, 2007 WL 9710295, at *5
(E.D.N.Y. 2007) (Seybert, J.) (quoting Pitney Bowes, Inc., 25 F.3d
at 70).
Having evaluated the foregoing factors, the Court finds
TBMT’s motion is timely. First, this case is in its early stages
-- Plaintiff recently filed its first amended complaint, mooting
the pending motions to dismiss, and discovery has not yet commenced
-- so “neither the existing parties nor the progress of this case
would be prejudiced by [TBMT’s] intervention.” First Data Merch.
Servs. LLC v. MM Dev. Co., No. 19-CV-10964, 2020 WL 2215457, at *2
(S.D.N.Y. May 6, 2020); see also Nu-Chem Labs., Inc., 1998 WL
35180780 at *3. It is true, as Sea Tow points out, that TBMT knew
about the present action since it was filed on June 29, 2020. Yet
at that time, TBMT was pursuing reorganization through bankruptcy,
and the Court is disinclined to hold against TBMT its decision to
preserve the automatic stay and its belief, which proved incorrect,
that the Florida AP was the proper forum for this dispute. Rather,
the Court notes that as soon as the Main Bankruptcy Case was
dismissed, TBMT quickly moved to intervene, filing its motion less
than two weeks later.
Moreover, intervention will not prejudice Sea Tow by
unnecessarily complicating the case or generating costly or
duplicative discovery. (See Opp. at 8-9.) Any complexity brought
about by TBMT’s intervention here pales in comparison to the
complexity identified in Washington Electric Cooperative, which
Sea Tow cites, where the Second Circuit affirmed the denial of a
motion to intervene brought by a state agency because it would
have transformed a “conventional contractual dispute between two
parties” for under one million dollars in damages into one in which
two plaintiffs, one purporting to represent the interests of six
interested non-parties, sought over six million dollars in
damages. 922 F.2d at 97 (discussing one of several reasons that
the district court did not abuse its discretion in denying the
motion). The Court also anticipates that intervention will
streamline, not duplicate, discovery, because TBMT has
discoverable information related to several agreements and issues
relevant here. With TBMT as a party-defendant, there will be no
issue as to whether the Moreno Defendants have possession over
certain TBMT documents such that they are obligated to disclose
them in the course of discovery.
Last, and as discussed infra, because TBMT has
significant contractual interests in this litigation, the Court
concludes that TBMT is likely to be prejudiced if it cannot
intervene. Accordingly, TBMT’s motion is timely.
B. Whether TBMT Has a Legal Interest in the Litigation
To intervene as of right, the proposed intervenor must
have more than a “remote or contingent” interest in the transaction
that is subject of the action; rather, it must establish an
interest that is “direct, substantial, and legally protectable.”
Nu-Chem Labs., Inc., 1998 WL 35180780, at *3 (citing New York News,
Inc. v. Kheel, 973 F.2d 484, 486 (2d Cir. 1992)).
The Court finds that Proposed Defendant TBMT has an
interest in this litigation that is direct, substantial and legally
protectable, because the Court must adjudicate the validity of the
termination of TBMT’s Franchise Agreement to determine whether the
Moreno Defendants (and TBMT) are liable for the pro rata share of
membership fees TBMT received after the Franchise Agreement was
terminated but before the parties entered into the TARA. Simply
put, according to Sea Tow’s allegations, TBMT is a party to several
of the at-issue agreements, including the original sales agreement
for TBMT (Am. Compl. ¶ 26); Franchise Agreement; Guaranty
(Guaranty, Kessler Decl., Ex. A, ECF No. 34-1); the Shute Note and
New Note (Am. Compl. ¶¶ 41-42); and the TARA (Am. Compl. ¶ 60);
among other potentially relevant agreements that may be disclosed
through discovery. Thus, this case is unlike Mastercard
International Inc. v. Visa International Services Ass’n, where the
Second Circuit affirmed the district court’s denial of Visa’s
motion to intervene because Visa was “a stranger to the contractual
dispute between MasterCard and FIFA.” 471 F.3d 377, 390 (2d Cir.
2006). TBMT is anything but a stranger here, and Sea Tow’s
allegations will require the Court to interpret and adjudicate its
rights under several agreements to which it is a party.
Moreover, Plaintiff alleges that TBMT -- not just the
Moreno Defendants -- made false representations to Sea Tow when it
guaranteed the New Note. (Am. Compl. ¶¶ 114-15.) This is not
surprising, since TBMT is a central actor in the alleged fraud
scheme, the object of which was to free TBMT of its raft of
liabilities and return the Tampa Bay AOR to TBMT’s control. (Id.
¶¶ 110-21.) For example, to further the alleged scheme, Sea Tow
alleges TBMT abused the bankruptcy process by disclosing certain
confidential financial information in the Main Bankruptcy Case.
(Id. ¶¶ 87-92.)
Based on Sea Tow’s allegations against TBMT, as well as
TBMT’s contractual interests, the Court concludes that TBMT has an
interest in the present litigation.
C. Whether TBMT’s Interest Would Be Impaired without
Intervention_____________________________________
The third requirement is satisfied where prospective
intervenors demonstrate “that the disposition of the action may,
as a practical matter, impair or impede the person’s ability to
protect that interest.” Pitney Bowes, Inc., 25 F.3d at 69-70.
TBMT raises “stare decisis” concerns, but “[b]ecause this is not
a case of first impression involving the resolution of new legal
issues but a conventional contractual dispute, the doctrine of
stare decisis also will not control future, related actions by
[proposed intervenor].” Washington Elec. Coop., Inc., 922 F.2d at
98. TBMT is not facing products liability litigation across
“twenty-two” separate forums, like the proposed intervenor in
Sackman v. Liggett Group, Inc., 167 F.R.D. 6, 21 (E.D.N.Y. 1996),
a case relied on by TBMT in support of its position. (See TBMT
Br. at 10.) The real issue for TBMT is not stare decisis, but
collateral estoppel, also known as issue preclusion.
Specifically, if the Court finds that the Franchise Agreement
terminated by its own terms based on the Synovus Action remaining
pending against TBMT for more than thirty days, and that the
termination clause is valid, then that holding as to the validity
of the termination clause may be binding on TBMT in future actions.
This is the case even though TBMT is not a party here, because it
could be held “in privity” with the Moreno Defendants. Where issue
preclusion “may impair a proposed intervenor’s ability to
vindicate its interests in a separate lawsuit, courts have found
the requisite impairment of interest to satisfy Rule 24(a).” Home
Ins. Co. v. Liberty Mut. Ins. Co., No. 87-CV-0675, 1990 WL 188925,
at *5 (S.D.N.Y. Nov. 20, 1990) (citations omitted); see also New
York v. Gutierrez, No. 08-CV-2503, 2008 WL 5000493, at *6 (E.D.N.Y.
Nov. 20, 2008); Keybank, Nat’l Ass’n, 2007 WL 9710295, at *6.
Moreover, as noted supra, this litigation will adjudicate TBMT’s
rights and obligations under several agreements, including the
Franchise Agreement, Guaranty, and the Shute and New Notes. (See
Am. Compl. ¶¶ 163-169.) Accordingly, TBMT’s interest would be
impaired without intervention.
D. Whether TBMT’s Interest Is Adequately Represented
by the Moreno Defendants__________________________
The intervening party bears the burden of providing that
its interests are not adequately represented by the existing
parties, but that burden is “minimal.” Keybank Nat’l Ass’n, 2007
WL 9710295, at *6. However, the Second Circuit has “demanded a
more rigorous showing of inadequacy in cases where the putative
intervenor and a named party have the same ultimate objective.”
Butler, Fitzgerald & Potter v. Sequa Corp., 250 F.3d 171, 179 (2d
Cir. 2001) (quoting Wash. Elec. Co-op., Inc., 922 F.2d at 98).
Where the court finds there is an identify of interest, the party
seeking intervention must rebut the presumption of adequate
representation, such as by demonstrating “collusion, adversity of
interest, nonfeasance, or incompetence.” Id.
Here, TBMT and the Moreno Defendants, represented by the
same counsel, have the same ultimate objective: dismiss Sea Tow’s
claims and perhaps even revive certain rights under the Franchise
Agreement. Because the Court finds an identity of interest exists,
TBMT must rebut the presumption of adequate representation. To do
so, TBMT argues that, “[a]s principal obligor [under the Franchise
Agreement], TBMT has additional defenses and direct counterclaims
that the Moreno’s cannot effectively raise,” specifically,
counterclaims relating to TBMT’s purported continuing interest and
rights under the Franchise Agreement. (TBMT Br. at 11-12.)
Moreover, TBMT contends there is daylight between its interests
and those of the Moreno Defendants, because in the event the Moreno
Defendants are found liable, they will possess a right of action
against TBMT for indemnification. (Reply at 5.)
Although a close call, based on TBMT’s showing, and in
the interest of fulfilling Rule 24’s purpose of “prevent[ing] a
multiplicity of suits where common questions of law or fact are
involved,” Washington Elec. Coop., Inc., 922 F.2d at 97, the Court
finds that TBMT has rebutted the presumption of adequate
representation here. As the court in Fredericks v. Shapiro
recognized in this context, a guarantor (here, the Moreno
Defendants) does not adequately represent the rights of a principal
obligor (here, TBMT) where the principal obligor seeks to assert
counterclaims that are not available to the guarantor. 160 F.R.D.
26, 28 (S.D.N.Y. 1995). Additionally, TBMT’s and the Moreno
Defendants’ interests may “diverge” in the event Sea Tow prevails
on its claims against the Moreno Defendants, at which point the
Moreno Defendants would seek indemnification from TBMT.
Steinhardt v. Shadow, No. 16-CV-4222, 2018 WL 4278334, at *2
(S.D.N.Y. Mar. 6, 2018) (“Under New York law . . . a guarantor is
‘equitably entitled to full indemnity against the consequences of
a principal obligor's default.’”); see also Home Ins. Co., 1990 WL
188925, at *6 (finding no adequate representation where “potential
conflict of interest” could arise between the proposed intervenor
and its insurer in indemnification and contribution context).
Accordingly, for the foregoing reasons, the Court
concludes that TBMT has met the requirements to intervene as of
right.
E. Sea Tow’s Remaining Arguments
Sea Tow makes two additional arguments against
intervention: (1) TBMT filed its motion in the name of “Tampa Bay
Marine & Towing, Inc.,” an entity that does not exist, rather than
“Tampa Bay Marine Towing & Service, Inc.,” the franchisee (Opp. at
14); and (2) TBMT’s motion should be denied because its
counterclaims are futile (id. at 11-13). First, however slipshod,
the Court finds TBMT’s mistake amounts to no more than a
scrivener’s error and is not a basis to deny the motion. And Sea
Tow’s second argument puts the proverbial cart before the horse.
As the Second Circuit explained in Brennan v. New York City Board
of Education:
“[E]xcept for allegations frivolous on their
face, an application to intervene cannot be
resolved by reference to the ultimate merits
of the claims which the intervenor wishes to
assert following intervention, but rather
turns on whether the applicant has
demonstrated that its application is timely,
that it has an interest in the subject of the
action, that disposition of the action might
as a practical matter impair its interest, and
that representation by existing parties would
not adequately protect that interest. . . .
The sufficiency of an interest entitles the
intervenor to contest the merits of his/her
claim based on that interest. An interest
that is otherwise sufficient under Rule
24(a)(2) does not become insufficient because
the court deems the claim to be legally or
factually weak.
260 F.3d 123, 129–30 (2d Cir. 2001) (internal citations omitted).
Accordingly, the Court is not persuaded by Sea Tow’s remaining
arguments.
II. Permissive Intervention
In the alternative, the Court finds that TBMT has met
the requirements for permissive intervention under Rule 24(b).
Permissive intervention “is discretionary with the trial court.”
H.L. Hayden Co. of N.Y. v. Siemens Med. Sys., Inc., 797 F.2d 85,
89 (2d Cir. 1986). “‘In exercising its discretion,’ the court
must ‘consider whether the intervention will unduly delay or
prejudice the adjudication of the rights of the original parties.’”
Citizens Against Casino Gambling in Erie Cnty. v. Hogen, 417 F.
App’x 49, 50 (2d Cir. 2011) (citing H.L. Hayden Co. of N.Y., 797
F.2d at 89 (2d Cir. 1986) (quoting Rule 24(b))). “Additional
relevant factors include the nature and extent of the intervenors'
interests, the degree to which those interests are adequately
represented by other parties, and whether parties seeking
intervention will significantly contribute to full development of
the underlying factual issues in the suit and to the just and
equitable adjudication of the legal questions presented.” H.L.
Hayden Co. of N.Y., 797 F.2d at 89.
As noted supra, the Court finds intervention will not
delay proceedings, which remain in their early stages, or prejudice
Sea Tow. Moreover, TBMT’s involvement will significantly
contribute to the full development of the underlying factual
issues, given its role in the allegedly fraudulent scheme and
connection to the disputed agreements.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
CONCLUSION
Accordingly, for the reasons stated herein, Proposed
Defendant TBMT’s Motion to Intervene is GRANTED. IT IS HEREBY
ORDERED that:
(1) The Clerk of the Court shall add Tampa Bay Marine Towing
& Services, Inc. as a defendant in this action. TBMT
has equal standing with the original parties; however,
TBMT is subject to the proceedings that have occurred
prior to its intervention, such as the Agreed
Preliminary Injunction (ECF No. 25); and
(2) The Defendants shall answer or move to dismiss Sea Tow’s
Amended Complaint within twenty (20) days of receipt of
this Memorandum and Order.
SO ORDERED.
/s/ JOANNA SEYBERT___________
Joanna Seybert, U.S.D.J.
Dated: February _1_, 2021
Central Islip, New York