886 F2d 1319 Hellmers v. United States

886 F.2d 1319

Unpublished Disposition

NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.

Theodore HELLMERS; Sherry Hellmers, Plaintiffs,
UNITED STATES of America; Arizona Helicopters; Air
Services International; Robert Thyden, et al.,
County of Los Angeles, Intervenor-Appellants.

No. 88-6229.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Aug. 9, 1989.
Decided Sept. 28, 1989.

Before JAMES R. BROWNING, FARRIS and CANBY, Circuit Judges.




The County of Los Angeles appeals from an order of the district court vacating a prior order and denying the County leave to intervene pursuant to Fed.R.Civ.P. 24(a). We have jurisdiction over an order denying intervention as a matter of right. United States v. Stringfellow, 783 F.2d 821, 825 (9th Cir.1986), vacated on other grounds sub nom. Stringfellow v. Concerned Neighbors in Action, 480 U.S. 370 (1987). Although we are mindful that Fed.R.Civ.P. 24 is to be broadly construed in favor of intervention, Stringfellow, 783 F.2d at 826, we conclude that the district court did not abuse its discretion in denying intervention. We therefore affirm its order.



This action arises from a mid-air collision which occurred in 1977 when a helicopter owned and operated by Air Services International, Inc. and Arizona Helicopters, Inc. (collectively Arizona Helicopters) was struck by a second helicopter owned and operated by the County. At the time of the crash, both helicopters were involved in night firefighting activities under contract with the United States Forest Service. The County helicopter was piloted by Thomas Grady and Theodore Hellmers, both employees of the Los Angeles Fire Department. Grady was killed in the collision and Hellmers suffered severe injuries.


The accident generated a number of legal actions. In May of 1978, Hellmers and his wife Sherry Hellmers filed a complaint for damages for personal injuries resulting from the accident, naming the United States, Arizona Helicopters and the two pilots of the Arizona Helicopters aircraft as defendants. Arizona Helicopters brought a companion action the following month for property damage against the County (later amended to add the United States as a defendant). These two actions were consolidated to form the lawsuit underlying this appeal.


In the meantime, Hellmers received worker's compensation benefits of over $100,000 from the County. In 1979, the County filed an administrative claim against the United States to recover damages for the loss of the County's helicopter and reimbursement of Hellmers' worker's compensation benefits. This action was settled in 1980 for $467,625.16, the amount of the property damage.1 The terms of the settlement required the County to waive all other claims against the United States arising from the crash and to assign any rights to reimbursement for property damage to the United States for further legal action.


The consolidated personal injury and property damage case, after numerous continuances, was bifurcated into separate liability and damage trials. The liability trial was then set for October 8, 1985. On September 27, 1985, two weeks prior to trial, the County agreed to settle with Arizona Helicopters, leaving the United States as the sole defendant in the property damage action.2 The liability portion of the bifurcated trial therefore proceeded without the presence of the County. After trial, on November 5, 1986, the district court issued a memorandum decision, holding, in relevant part, that in the personal injury action, "Hellmers' comparative negligence is quantified at twenty percent (20%) and the joint and several liability of [Arizona Helicopters] and the Government is found to be eighty percent (80%)." In the property damage action, the court set the United States' liability at eighty percent and Arizona Helicopters' comparative fault at twenty percent. The percentage of the County's liability, if any, was not determined, although the district court's memorandum did discuss the County's involvement in the collision.3


After a decision was reached in the liability phase, a trial date of November 3, 1987 was set for the damages portion of the case. Due to several continuances, this date was pushed back to March 8, 1988. On February 24, 1988, two weeks before the scheduled trial date, the County filed the motion to intervene at issue in this appeal, seeking to intervene to recover reimbursement for worker's compensation benefits which the County paid to Hellmers as provided under California law. On March 8, over the opposition of the Hellmers, the United States and Arizona Helicopters, the motion was denied as to defendant-in-intervention United States, but granted as to defendant-in-intervention Arizona Helicopters. The trial date was later continued to June 13, 1988.


The County filed its Complaint-in-Intervention on March 25, 1988. Arizona Helicopters answered on April 1, and on April 10 filed a trial memorandum regarding the status of the intervenor and a motion to amend its answer to the Complaint-in-Intervention to raise two affirmative defenses based on the comparative negligence of the County. Arizona Helicopters claimed that:


[a]s a result of their comparative negligence, any recovery by plaintiffs ... or intervenor COUNTY OF LOS ANGELES should be reduced pursuant to Witt v. Jackson (1961) 57 Cal.2d 57, 17 Cal.Rptr. 369, 366 P.2d 641, as modified by the principles of comparative negligence prescribed in Li v. Yellow Cab (1975) 13 Cal.3d 804, 119 Cal.Rptr. 858, 532 P.2d 1226.


On June 14, relying on the new defenses raised in its proposed amended answer, Arizona Helicopters filed a motion to dismiss the Complaint-in-Intervention. On June 21, 1988, the district court granted Arizona Helicopters' motion to amend its answer to the Complaint-in-Intervention and directed that the prior order granting leave to intervene be vacated and the motion to intervene denied. The order stated "the County's negligence, if any, is a proper defense to the County's claim, [and] if the County intended to have its claim concerning workers' compensation litigated herein by way of intervention, the County should have intervened before the liability trial was conducted."4


The County timely appealed from the district court's order. In the meantime, the damages portion of the trial was concluded on September 2, 1988. The parties were still awaiting the judgment of the district court at the time briefs were filed.



Intervention as a matter of right in a federal court action is governed by Fed.R.Civ.P. 24(a).5 A district court's denial of a motion to intervene as a matter of right is reviewed de novo, except for the issue of timeliness, which is reviewed for abuse of discretion. NAACP v. New York, 413 U.S. 345, 365-66 (1973); Orange County v. Air California, 799 F.2d 535, 537 (9th Cir.1986), cert. denied sub nom. City of Irvine v. Orange County, 480 U.S. 946 (1987). "[T]he timeliness requirement for intervention as of right should be treated more leniently than for permissive intervention because of the likelihood of more serious harm." United States v. State of Oregon, 745 F.2d 550, 552 (9th Cir.1984). See also Alaniz v. Tillie Lewis Foods, 572 F.2d 657, 659 (9th Cir.), cert. denied, 439 U.S. 837 (1978).



This court has developed a four-part test for determining whether applications for intervention brought pursuant to Fed.R.Civ.P. 24(a)(2) should be granted:6


An order granting intervention as of right is appropriate if (1) the applicant's motion is timely; (2) the applicant has asserted an interest relating to the property or transaction which is the subject of the action; (3) the applicant is so situated that without intervention the disposition may, as a practical matter, impair or impede its ability to protect that interest; and (4) the applicant's interest is not adequately represented by the existing parties.


Orange County, 799 F.2d at 537 (quoting Stringfellow, 783 F.2d at 826; see Fresno County v. Andrus, 622 F.2d 436, 438 (9th Cir.1980)).7 Therefore, we must first address whether the district court abused its discretion in holding that the County's motion to intervene was untimely filed.


To determine timeliness, we weigh three factors: "(1) the stage of the proceeding at which an applicant seeks to intervene; (2) the prejudice to other parties; and (3) the reason for and length of the delay." Orange County, 799 F.2d at 537 (citing United States v. State of Oregon, 745 F.2d at 552). "Mere lapse of time alone is not determinative." Id. However, the burden is on the applicant to demonstrate that the conditions for intervention, including timeliness, are met. Petrol Stops Northwest v. Continental Oil Co., 647 F.2d 1005, 1010 n. 5 (9th Cir.), cert. denied, 454 U.S. 1098 (1981). We will examine each of the relevant factors in turn.

1. Stage of the Proceedings


It is well-established under California law that an employer whose employee suffers an injury in the course of employment by the negligence of a third party is entitled to recover worker's compensation benefits from the third party. Cal.Labor Code Sec. 3852. See Emmer, California Workers' Compensation and Third Party Litigation: A Survey of Recent Developments, 15 U.West.L.A.L.Rev. 1 (1973). The employer may recapture such benefits by bringing an action directly against the third party tortfeasor, by joining or intervening in the injured employee's action for damages against the third party tortfeasor, or by allowing the employee to prosecute the action alone and then applying for a lien against the judgment. Cal.Labor Code Secs. 3852, 3853, 3856(b); Witt v. Jackson, 57 Cal.2d 57, 17 Cal.Rptr. 369, 376 (1961).


It is equally settled, however, that the amount of reimbursement of worker's compensation obtained by an employer should be reduced in proportion to the employer's share of responsibility, if any, for the employee's injury, with apportionment of damages based on a system of comparative negligence. Arbaugh v. Proctor & Gamble Mfg. Co., 80 Cal.App.3d 500, 145 Cal.Rptr. 608, 614-15 (1978); Associated Const. & Eng'g Co. v. Workers' Compensation Appeals Bd., 22 Cal.3d 829, 150 Cal.Rptr. 888, 896 (1978). The County, a self-insured employer, should have known (and has never denied knowing) about its right to intervene in the personal injury action to seek reimbursement of worker's compensation payments. And Arizona Helicopters has properly and foreseeably raised as a defense the issue of the County's comparative negligence and potential proportionate liability for Hellmers' personal injury.


Nonetheless, the County waited to file its motion to intervene until eleven years after the helicopter crash, ten years after the property damage and personal injury suits were filed and consolidated, two and one half years after the County settled out of the property damage case, more than one year after the district court's decision in the liability portion of the trial and only two weeks before the damages portion of the bifurcated trial was to begin (after numerous continuances). Because liability has already been adjudicated and because the County waited until the eve of the damages trial before filing its motion to intervene, when the County knew or reasonably should have known that its concurrent negligence might be an issue, the stage of the proceedings militates against a finding of timeliness.8

2. Prejudice to Other Parties


Similarly, the fact that liability has already been adjudicated demonstrates that there would be substantial prejudice to the existing parties if the County were permitted to intervene at this late date. Requiring the parties to retry the liability portion of the trial, or some part thereof, to determine the existence and extent of the County's negligence would obviously delay and disrupt the court's orderly proceedings, and waste the court's and the existing parties' time and money.9 In addition, reconsideration of liability would further delay the Hellmers' recovery for damages suffered over ten years ago for which the existing defendants have already been adjudicated at least partially responsible. Cf. Orange County, 799 F.2d at 538; Alaniz, 572 F.2d at 659. Prejudice to the existing parties "has been termed 'the most important consideration in deciding whether a motion for intervention is untimely.' " United States v. State of Oregon, 745 F.2d at 552 (quoting 7A C. Wright & A. Miller, Federal Practice & Procedure Sec. 1916 (1972)).


The County contends that Arizona Helicopters has failed to show prejudice because "[w]hat difference does it make to them whether they pay the money directly to Mr. Hellmers or to the [County]?" Presumably, if the County were permitted to intervene and the issue of the County's comparative fault were adjudicated, the total amount of Arizona Helicopters' liability would either remain the same or even decrease if the County were found to be negligent. See Witt v. Jackson, 17 Cal.Rptr. at 378 ("the injured employee may not be allowed double recovery, [and] his damages must be reduced by the amount of workmen's compensation he received"); Jarvis v. Southern Pac. Transp. Co., 142 Cal.App.3d 246, 191 Cal.Rptr. 29, 36 (1983) (same). However, the County ignores the delay and the increased litigation costs imposed on all parties. These costs are presumably the reason that all three parties to the personal injury action joined in opposing the County's motion to intervene. Arizona Helicopters has made a sufficient showing of prejudice.

3. Reason for and Length of Delay


Finally, the County has not presented any explanation for its prolonged delay in moving to intervene to protect its well-established right to reimbursement of the amounts paid to Hellmers in worker's compensation benefits. The County clearly had knowledge of the suit, because the County fully participated in the consolidated litigation as a defendant in the property damage action until two weeks before the commencement of the liability trial.10 The County's failure to explain why it did not seek to intervene at an earlier date supports a finding of untimeliness.11


Our analysis of these three factors, even with due regard for leniency in the timeliness requirement for intervention as of right, leads us to conclude that the district court did not abuse its discretion by denying the County's motion to intervene as untimely. Although this decision may cause the County some difficulty, "any prejudice to [the County] resulting from the denial of intervention may be attributed to [its] own failure to seek intervention when [it] first had reason to become aware" of its interest in the personal injury law suit. United States v. Yonkers Bd. of Educ., 801 F.2d 593, 595 (2d Cir.1986). Because the County's motion to intervene was untimely, we do not reach the three other factors used to determine whether intervention should be granted.



We AFFIRM the district court's decision vacating its prior order and denying the County's motion to intervene. We express no opinion as to the County's ability to pursue any available state law remedies in state court to prevent Hellmers from receiving double recovery; our disposition of this matter should not reflect upon the merits of such an action.




This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Cir.R. 36-3


Apparently, the government took the position that the claim for worker's compensation benefits was not within the scope of claims authorized to be paid pursuant to 45 C.F.R. Sec. 2010.03(b)


The two pilots of the Arizona Helicopters' aircraft were also dismissed as defendants prior to trial


For example, the district court found "County Helicopter guilty of comparative fault in its failure to respond to or acknowledge the VHF radio communication from Arizona Helicopter on final approach made prior to the County Helicopter announcement. This failure to take reasonable actions to communicate and avoid danger of a helicopter which makes a prior announcement of turning on the final approach constitutes a breach of due care owed to itself. It was also a proximate cause of his [presumably Hellmers'] injuries." It is not clear, however, from the context, whether the memorandum was discussing liability which may be imputed to the County or of employees Grady and Hellmers individually


The district court also found (1) that the "fact that the liability trial has already concluded herein does not eliminate the defense of the County's negligence to the County's claims" and (2) "[w]hen the court granted the motion by the County for leave to intervene, the court was relying on the County's representation that its intervention would not 'raise any new issues of law or fact ...', because the liability phase had already concluded and only the trial on damages remained."


Fed.R.Civ.P. 24(a) provides:

Upon timely application anyone shall be permitted to intervene in an action: (1) when a statute of the United States confers an unconditional right to intervene; or (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.


No statute of the United States confers on the County an unconditional right to intervene in this case; therefore, Fed.R.Civ.P. 24(a)(1) is inapplicable


The County devotes a considerable portion of its briefs to the contention that in this diversity action the court should apply California law to determine whether intervention is permitted under Fed.R.Civ.P. 24(a). The County apparently believes that because California law provides a right of intervention the County should be permitted to intervene in a federal court action. However, "[i]t is wholly clear that the right to intervene in a civil action pending in a United States District Court is governed by Rule 24 and not by state law." 7C C. Wright, A. Miller & M. Kane, Federal Practice & Procedure Sec. 1905 (2d ed. 1986). Although state law is relevant to the extent that it determines whether the County has a substantive right to reimbursement of the amounts paid out as worker's compensation, "[i]f the substantive right ... exists, the mode, time, and manner of its assertion is a procedural matter to be determined by the federal rules rather than by state law." Id. The County has cited no cases, and we have found none, which apply state procedural law in this context. See McDonald v. E.J. Lavino Co., 430 F.2d 1065, 1070 (5th Cir.1970) (applying Mississippi law to determine the existence of a substantive subrogation right and federal law to analyze the procedural question regarding the presentation of the motion to intervene)


We also note that, under California law, intervention as of right is available "at any time before trial on the facts." Cal.Labor Code Sec. 3853 (as quoted in Carden v. Otto, 37 Cal.App.3d 887, 112 Cal.Rptr. 749, 754 (1974)). In this instance the County waited to intervene until well after the bifurcated trial commenced


The County contends that because the district court's memorandum decision apportioning liability did not hold the County responsible for a percentage of liability that "[l]ogically, the deduction from this is that there was an assessment of comparative negligence of the County, and that none existed." There is nothing logical about this contention. The County's negligence was directly raised in Arizona Helicopters' original complaint in the property damage action, but this issue was dropped because the County settled this claim prior to trial. The County's negligence was likewise not directly at issue in the personal injury action because the County was never a party to that action. Although the County contends that Arizona Helicopters raised the defense of the County's negligence in the personal injury action, this is not clear from the district court's memorandum decision, which made no findings regarding the County's concurrent negligence. In fact, in the order appealed from here, the district court intimated that the County's negligence had not been determined when it stated that the conclusion of the liability trial did not eliminate the defense of the County's negligence. Because the issue of the County's negligence was not litigated, decided, or necessary to a decision after the liability portion of the trial and the County was not a party, neither issue nor claim preclusion is applicable in this case. See Montana v. United States, 440 U.S. 147, 153 (1979)


The County contends that although it may have had actual notice of the suit, the Hellmers did not provide it with the formal written notice required under Cal. Labor Code Sec. 3853. Carden v. Otto, 112 Cal.Rptr. at 755. Section 3853 provides, in relevant part:

If either the employee or the employer brings an action against such third person, he shall forthwith give to the other a copy of the complaint by personal service or certified mail.

However, regardless of whether the Hellmers provided the notice required in an action governed by California state law, the County had sufficient notice of the personal injury suit to permit it to intervene at an earlier date to protect its reimbursement right. This actual notice is sufficient to trigger the need for an explanation for the County's delay in seeking to intervene to establish whether its application for intervention is timely filed under federal law.


The County attempts to place the burden of raising the issue of the County's negligence on Arizona Helicopters. Specifically, the County claims that it should not have been required to enter into the action early on to defend itself when Arizona Helicopters had not raised a claim or affirmative defense against it (or, as the case may be, had raised the issue of the County's negligence but failed to pursue it). Although another district court might properly find such an argument persuasive, the district court in this case acted well within its discretion in deciding that the County should bear the burden. In addition, we have found no California law which would require a third party tortfeasor to raise the issue of the employer's comparative fault at trial or else risk waiving the Witt v. Jackson defense when the employer later seeks to recover reimbursement for worker's compensation benefits