SPRING CREEK HOLDING COMPANY, INC. v. SHINNIHON U.S.A. CO., LTD., et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0318-04T30318-04T3

SPRING CREEK HOLDING COMPANY, INC.,

Plaintiff-Respondent,

v.

SHINNIHON U.S.A. CO., LTD., KIYOSHI

FUJINAMI, SHINNIHON KANKO KOGOYO CO.,

LTD., ATLAS DEVELOPMENT AND CONSTRUCTION

CO., and VERNON a/k/a "KIP" MERRIT,

Defendants-Respondents.

______________________________________________

SHINNIHON U.S.A. CO., LTD.,

Third Party Plaintiff-Respondent,

v.

METAIRIE CORPORATION,

Third Party Defendant-Respondent.

______________________________________________

MARVIN KEITH and NORAMCO (NEW JERSEY), LTD.,

Applicant for Intervention as

Interventors-Appellants.

________________________________________________

 

Argued November 30, 2005 - Decided

Before Judges Wecker and Fuentes.

On appeal from the Superior Court of New

Jersey, Chancery Division, Sussex County,

C-43-03.

Richard D. Gaines argued the cause for

intervenors-appellants Marvin Keith and

Noramco (New Jersey), Ltd. (Richard D.

Gaines & Associates, attorneys; Mr.

Gaines on the brief).

Steven M. Richman argued the cause for

respondent Shinnihon U.S.A. Co., Ltd.

(Duane Morris, attorneys; Mr. Richman, of

counsel; Mr. Richman and Jonathan L. Swichar,

on the brief).

Ramsey Berman, attorneys for respondent

Spring Creek Holding Company, Inc., have

not filed a brief.

PER CURIAM

Appellants Marvin Keith and Noramco (New Jerey), Ltd., appeal from an order denying their motion pursuant to Rule 4:33 to intervene in this Chancery Division action between Spring Creek Holding Company, Inc. and Shinnihon USA Co., Ltd. Judge McKenzie explained his decision as follows:

In the case at bar, both Keith and Noramco meet this threshold test, in the sense that they would have standing to assert claims of their own against the parties to the action. Keith, as a shareholder of Spring Creek, has a financial interest in Spring Creek's ability to reacquire the Remainder Land, which is reportedly its sole significant asset. Thus, he has an interest in making sure Spring Creek does not lose that right by virtue of default. Likewise, Noramco has a financial interest in Spring Creek's ability to reacquire the Remainder Land, so that Spring Creek may fulfill its obligations under the contracts it has with Noramco. However, neither party seeks to assert its own claims, but rather, seeks to assert Spring Creek's claims. Standing requirements prevent Keith and Noramco from asserting Spring Creek's claims. The Court also notes that Spring Creek has already asserted these claims on its own behalf and is represented by counsel.

II. STANDARD FOR INTERVENTION AS OF RIGHT:

Intervention may be granted pursuant to one of two New Jersey Court Rules; intervention as of right or permissive intervention. Intervention as of right is governed by R. 4:33-1, which provides:

Upon timely application anyone shall be permitted to intervene in an action if the applicant claims an interest relating to the property or transaction which is the subject of the action and is so situated that the disposition of the action may as a practical matter impair or impede the ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.

Pursuant to this rule, an applicant must (1) claim an interest relating to the property or transaction which is the subject of the action, (2) show he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, (3) overcome a showing that his interest is adequately represented by existing parties, and (4) make a timely application to intervene.

In the case at bar, both Keith and Noramco have established an interest relating to the property or transaction which is the subject of this action, which the Court referred to in the section regarding standing, and have shown that the disposition of the action by default may, as a practical matter, impair or impede their ability to protect those interests.

Furthermore, the Court finds that their application was timely, even though default has already been entered. Shinnihon argues that Keith should be barred from intervention because, although he has supposedly been monitoring the progress of this action carefully, he has not taken action until this late stage. The Court finds that this argument is without merit, because even though Keith does not seem to be in control of Spring Creek presently, he likely did not consider his interests to be in significant jeopardy until he was notified of the request for default, after which he promptly moved to intervene. Further, in light of the fact that the motion was brought for the purpose of attempting to vacate the default, it was timely because it was brought very soon, within two weeks, after default was entered.[]

As to the third prong of the test for intervention as of right, however, Keith and Noramco cannot meet the standard. To negate a showing by the opponents of the motion to intervene that the applicants are being adequately represented by the existing parties, the applicants must show that the concerns of the parties are "sufficiently different." See Mobil [Admin. Serv. Co. v. Mansfield Tp., 15 N.J. Tax 583, 595 (Tax Ct. 1996), aff'd, 17 N.J. Tax 509 (Tax Ct. 1997)], Vicendese [v. J. FAD, Inc., 160 N.J. Super. 373, 380 (Ch. Div. 1978)]. The interests of Spring Creek and the applicants on the current motion are not sufficiently different. Spring Creek has just as much of an interest in its acquiring the Remainder Land as Keith does, and just as much interest in fulfilling the obligations of its agreements with Naramco, or suffering the consequences of failure to fulfill those obligations, as Naramco does. Although Keith and Noramco attempt to establish they are not being adequately represented by Spring Creek's current management by making allegations of possible collusion between Spring Creek and Shinnihon, they have failed to produce any credible evidence to support such allegations.

. . . .

III. STANDARD FOR PERMISSIVE INTERVENTION:

The other avenue for intervention into an existing action is permissive intervention. The New Jersey Court Rule for permissive intervention, R. 4:33-2, states in pertinent part,

Upon timely application anyone may be permitted to intervene in an action if the claim or defense and the main action have a question of law or fact in common . . . . In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.

Intervention, then, is permitted if there is a common issue of law or fact and the intervention will not unduly delay the action. Permissive intervention should be liberally granted. See State v. Lanza, 39 N.J. 595 (1963) [cert. denied, 375 U.S. 451 (1964)]. Thus, even if an applicant seeking intervention cannot meet the test for intervention as of right, the court may nevertheless, at its discretion, allow them to intervene. The factors to be considered in granting permissive intervention are the promptness of the application, whether granting will result in undue delay, whether granting will eliminate the possibility of further litigation, and the extent to which granting the motion may further complicate litigation which is already complex. See State Farm v. Zurich Am. Ins. Co., 62 N.J. 155 (1973); [Grober] v. Kahn, 88 N.J. Super. 343 (App. Div. 1965), [rev'd on other grds], 47 N.J. 135 (1966).

In the case at bar, although the application to intervene came promptly after entry of default, the Court will not permit Keith and Noramco to intervene. It may seem that on their face, the claims Keith and Noramco seek to assert have an issue of law or fact in common with the main action. This is because the claims they seek to assert are the same claims Spring Creek has already asserted on its own behalf. Keith and Noramco do not seek to assert separate claims for themselves, rather, they seek to assert Spring Creek's existing claims on behalf of Spring Creek. As mentioned above, standing requirements prevent a person or entity from asserting another's claims.

IV. CONCLUSION

In sum, the Court finds that Keith and Noramco meet the requirements for standing, as well as the first two requirements for intervention as of right, by virtue of their interests in ensuring that Spring Creek retains its right to reacquire the Remainder Land. In addition, its application to intervene in this action was timely. The applicants have not, however, establish[ed] that their interests are sufficiently different from Spring Creek's interests such that they should be entitled to intervene and essentially represent Spring Creek on this matter. Whether Keith has the right to control or choose counsel for Spring Creek is currently the subject of the pending Federal Litigation; if this Court were to allow intervention, it would be a de facto ruling on that issue, an issue that is not before it. Finally, the Court will not allow permissive intervention because standing requirements prevent Keith and Noramco from asserting the prosecuting Spring Creek's claims, which Spring Creek has already asserted and is in the process of prosecuting. Thus, Keith's and Noramco's motions for intervention are denied.

We agree with Judge McKenzie's well-reasoned written opinion, which accompanied the July 30, 2004, order appealed from. We therefore affirm, adding only these brief comments.

First, as noted by Judge McKenzie, appellants are presently parties to a suit in federal court involving most if not all of the same parties and issues. Indeed, in that action in the District Court for the District of New Jersey, Judge Linares has denied a motion to dismiss Keith and Noramco's claims concerning the rightful control of Spring Creek. We are disturbed at the apparently duplicative proceedings in this action, and by Keith's and Noramco's attempt to intervene here, in violation of the spirit of the entire controversy doctrine. See Pressler, Current N.J. Court Rules, comment 2 on R. 4:30A (2006). One rationale underlying the entire controversy doctrine is to promote judicial efficiency by requiring "the adjudication of a legal controversy . . . in one litigation in only one court . . . ." and by "the avoidance of 'piecemeal decisions.'" Cogdell v. Hosp. Ctr., 116 N.J. 7, 15 (1989). An obvious corollary is that we do not countenance multiple suits between the same parties on the same issues.

Second, we were informed at oral argument that (a) the federal court has denied the proposed intervenors' application for a preliminary injunction that would prohibit Shinnihon from any change in the status quo with respect to the property in issue, and (b) that denial is presently on appeal to the Third Circuit. This is the same relief appellants have recently sought before us by way of an "emergent" application filed on Monday, November 21, 2005 to stay Judge McKenzie's October 26, 2005 decision granting summary judgment to Shinnihon. As we understand it, that judgment declared that Spring Creek was in breach of an agreement with Shinnihon, and no longer had a valid legal interest in the property in question, thereby effectively freeing Shinnihon to act with respect to the property in which appellants claim an interest through Spring Creek. We reject appellants' attempt to seek the very same relief that was denied by the District Court. For both reasons, we now deny appellants' motion.

 
Having found no basis for appellants to intervene, there is obviously no basis for granting their motion to stay the October 26 judgment.

Affirmed.

Default was subsequently vacated, and that argument is moot.

That action is captioned Spring Creek v. Keith, Docket No. 02-376 in the District of New Jersey. The essential issue in that case appears to be the very issue on which Keith and Noramco seek to intervene here, that is, who controls Spring Creek.

(continued)

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9

A-0318-04T3

December 12, 2005