State Ex Rel. Long v. Interstate Casualty Insurance

417 S.E.2d 296 (1992) 106 N.C. App. 470

STATE of North Carolina, on Relation of James E. LONG, Commissioner of Insurance of North Carolina, Plaintiff,
v.
INTERSTATE CASUALTY INSURANCE COMPANY, Defendant,
v.
NORTH CAROLINA INSURANCE GUARANTY ASSOCIATION, Defendant-Intervenor,
v.
IFCO, INC., Finco, Inc., and Shivar and Son Premium Finance Company, Inc., Defendants-Intervenors.

No. 9110SC777.

Court of Appeals of North Carolina.

June 16, 1992.

Atty. Gen. Lacy H. Thornburg by Associate Atty. Gen. William W. Finlator, Jr., Raleigh, for plaintiff-appellee.

Moore & Brown by Beverly C. Moore, Jr., Washington, D.C., and Moore & Brown by B. Ervin Brown, II, Winston-Salem, for plaintiff-intervenor-appellant G. Harrison Hamil.

Moore & Van Allen by Joseph W. Eason, A. Bailey Nager, and Christopher J. Blake, Raleigh, for defendant-appellee North Carolina Ins. Guar. Ass'n.

WALKER, Judge.

Appellants contend the trial court should have granted their motion to intervene both as a matter of right pursuant to Rule 24(a)(2), N.C. Rules of Civil Procedure and permissively pursuant to Rule 24(b), N.C. Rules of Civil Procedure. We now examine each of these contentions separately.

Appellants argue that they should be allowed to intervene as a matter of right in order to obtain copies of all the Winners Circle contracts. They assert this information is needed so that other Winner's Circle purchasers can be informed of their rights. In particular, appellants contend that unless they are allowed to intervene, Winners Circle purchasers in Georgia will not be informed of a $25,000 Interstate deposit available in that state. We find no merit in appellants' contentions.

Rule 24(a)(2) provides:

(a) Intervention of right.—Upon timely application anyone shall be permitted to intervene in an action:

....

(2) When the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.

Rule 24(a)(2) requires three prerequisites before intervention is granted as a matter of right: (1) an interest relating to the property or transaction; (2) practical impairment of the protection of that interest; and (3) inadequate representation of that interest by existing parties. Ellis v. Ellis, 38 N.C.App. 81, 247 S.E.2d 274 (1978).

We recognize that appellants have met the first requirement for intervention as a matter of right. As purchasers of the terminated Winners Circle contracts (which were guaranteed by Interstate), they have an interest in the subject matter of this liquidation proceeding. However, appellants have failed to establish the other requirements which must be met before intervention as a matter of right is allowed.

In order to adequately protect their interests, appellants assert that intervention is required. However, they may protect their interests by filing a Proof of Claim pursuant to G.S. XX-XX-XXX, which from the record it appears they have already done. If the liquidator denies their Proof of Claim, appellants may thereafter obtain judicial review of the matter under G.S. XX-XX-XXX. Furthermore, we fail to see how their interest will not be adequately represented by the liquidator. In his capacity as Liquidator, the Commissioner of Insurance is bound by law to protect the interests of policyholders, claimants and creditors. G.S. 58-30-1; G.S. XX-XX-XXX; G.S. XX-XX-XXX.

Pursuant to Article 30 of Chapter 58, the proper mechanism for asserting a claim against an insurer in liquidation is by means of filing a Proof of Claim and the purpose of this procedure is in part to enhance "efficiency and economy of liquidation." G.S. 58-30-1(c)(3). Allowing intervention as an alternative to the established procedures of Article 30 could only increase the costs of liquidation and therefore decrease the assets available to all claimants (including appellants). Accordingly, we hold the trial court did not err in denying appellants' motion to intervene as a matter of right.

Appellants next contend the trial court erroneously denied their motion to intervene under Rule 24(b)(2), N.C. Rules of Civil Procedure. Permissive intervention under Rule 24(b)(2) rests within the discretion of the trial court and will not be disturbed on appeal absent an abuse of discretion. Ellis v. Ellis, 38 N.C.App. 81, 247 S.E.2d 274 (1978). In the present case, under Rule 24(b)(2) "because such intervention will unduly delay and prejudice the adjudication of the rights of the original parties." The record before us supports this conclusion and does not reveal any abuse of discretion.

For the aforementioned reasons, the decision of the trial court is

Affirmed.

LEWIS and WYNN, JJ., concur.