S. Vermont Coll. v. Guevin, No. 62-2-14 Bncv (Wesley, J. Apr. 2, 2014).
[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy of the text and the
accompanying data included in the Vermont trial court opinion database is not guaranteed.]

                                                     STATE OF VERMONT
SUPERIOR COURT                                                                                                  CIVIL DIVISION
Bennington Unit                                                                                         Docket No. 62-2-14 Bncv
Southern Vermont College,
      Plaintiff

           v.
                                                                                       DECISION ON MOTION
Jeffrey P. Guevin,
        Defendant

                Opinion and Order Denying York Street Management’s Motion to Intervene

Background

        Proposed intervenors urgent maneuverings seeking intervention in this matter devolve
to a “race to the res”. That is, upon learning that this Court had scheduled a hearing on
Plaintiff’s motion for attachment as to property held by the Estate of Beckwith, putative
intervenors have scrambled to secure their own more favorable position. For the reasons
explained below, the claim for intervention rests only on the assertion of priority as to pre-
judgment attachment, and that is insufficient to warrant intervention.

       Southern Vermont College (SVC) sues the Estate of Beckwith for fraud and conversion.
In 2012, Beckwith was the acting president of SVC. SVC alleges Beckwith used his position to
make several unauthorized deposits of SVC money into Beckwith’s personal accounts. Beckwith
resigned from SVC and later committed suicide. SVC currently seeks to attach property owned
by the Estate of Beckwith.

         On March 28, 2014, York Street Management, through counsel, wrote a letter to this
Court seeking a stay of these proceedings, including the scheduled hearing on Plaintiff’s motion
for attachment. York is a plaintiff in a case against SVC and Beckwith in the Northern District of
New York. York had an agreement with SVC to develop a new residence hall at SVC. York
alleges it was unable to fulfill the terms of its agreement because SVC and Beckwith interfered
with the development. Among other claims, York alleges the reason SVC did not follow through
with its obligations was because of difficulty in securing funds. Further, the reason SVC had
difficulty with funding was Beckwith’s misappropriation of money from SVC.

        On March 31, 2014, SVC responded to York’s letter, arguing it did not comply with the
requirements of V.R.C.P. 24. SVC also argued the New York case is not sufficiently related to
this case to allow intervention. Also on March 31, 2014, York filed a motion to intervene under
V.R.C.P. 24. York argued it has a right to intervene because the property at issue in this case is
necessary to secure its likely judgment against SVC and Beckwith. Alternatively, York seeks
permission to intervene because the cases have related questions of fact and law. On April 2,
2014, SVC opposed the motion to intervene. SVC argued York has no property interest in
property SVC seeks to attach. Further, the cases are not intertwined enough to justify
permissive intervention.
Intervention as Matter of Right

        Upon timely application a party shall be permitted to intervene in an action: (1) when a
statute 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. V.R.C.P. 24(a). The Vermont rule is similar to the federal rule.
Reporter’s Notes to V.R.C.P. 24. York acknowledges it is not entitled to intervene by statute.

         Wright and Miller help to explain when a party may intervene as a matter of right.
“There is not any clear definition of the nature of the ‘interest relating to the property or
transaction that is the subject of action’ that is required for intervention of right… Thus, many
of the cases in which a sufficient interest has been found under amended Rule 24(a)(2) have
been cases in which there is a readily identifiable interest in land, or some other form of
property such as intellectual property or personal property. A sufficient interest also has been
found when the intervenor claims an identifiable interest in funds that are the subject of
litigation. For example, insurers have been allowed to intervene as of right in lawsuits between
their insured and third parties who either are filing claims against the insured or who are being
sued by the insured. ” 7C Fed. Prac. & Proc. Civ. § 1908.1 (3d ed.)

        Vermont case law on the issue is limited, but generally follows Wright and Miller’s
reasoning. For example, in Helm v. Helm, the Vermont Supreme Court determined a former
husband did not have the right to intervene in the annulment action of his former wife with her
second husband. 139 Vt. 225, 225, 227 (1981). The annulment was relevant to the first husband
because it could influence his child support obligations. See id. at 226. The Court noted, to
intervene a party “must establish (1) an interest relating to the property or transaction, (2) that
the disposition may impair that interest and (3) that his interest is inadequately represented by
the existing parties.” Id. The Court held a potential interest in child support obligations was not
enough to justify intervention. Id. at 227.

       In an unpublished entry order, to which this Court makes reference as persuasive
authority, the Vermont Supreme Court also emphasized the type of property interest
contemplated is an actual ownership interest. See Bank of New York v. Lenge, No. 2003-513,
2004 WL 5582268 (Vt. May 2004). “The record demonstrates, however, that appellant does not
have any interest in the real property that was the subject of the underlying proceedings and
he thus had no basis to intervene as a matter of right.” Id. In Ernst v. Rocky Road, Inc., the
Vermont Supreme Court rejected minority investors’ motion to intervene on a majority
investors attempt to liquidate a corporation. See 141 Vt. 637, 638 (1982). The Court found the
application was untimely. See id. at 640.

       On the other hand, the Court allowed intervention for a creditor. See Herbert v. Pico Ski
Area Mgmt. Co., 2006 VT 74, ¶ 16, 180 Vt. 141. In Herbert, a ski mountain declared bankruptcy
and a creditor sought to recover its debts in superior court. Id. ¶ 1. The bankruptcy order did
not prohibit the suit in superior court. Id. ¶ 16. The superior court allowed a utility company to
intervene. Id. ¶ 5. The Supreme Court found the intervention was proper because the utility
company was a creditor and the superior court determined the original plaintiff did not own
money in an escrow account. Id. ¶ 16.
        In this case, York cannot intervene as a matter of right. V.R.C.P. 24(a)(2) contemplates a
party intervening when that party has an existing property interest in the disputed property.
See Helm, 139 Vt. at 227; Lenge, 2004 WL 5582268;7C Fed. Prac. & Proc. Civ. § 1908.1. York
does not claim any right to the property, it does not hold a lien and is not a co-owner of the
property in Beckwith’s estate. Moreover, York is not yet a creditor because it does not have a
judgment against SVC or Beckwith. See Herbert, 2006 VT 74, ¶ 16. Therefore, York is not
entitled to intervene as a matter of right.

Permissive Intervention

        The Court next considers whether to allow intervention by permission. “Upon timely
application anyone may be permitted to intervene in an action: (1) when a statute confers a
conditional right to intervene; or (2) when an applicant's claim or defense and the main action
have a question of law or fact in common.” V.R.C.P. 26(b). Again, York cannot point to a statute
that allows a conditional right to intervene and must therefore rely on V.R.C.P. 26(b)(2). York’s
argument depends on the overlapping issues in the cases.

        The Court has discretion in allowing intervention by permission. See V.R.C.P. 26(b) (“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.”); see also 7C Fed. Prac. & Proc.
Civ. § 1911 (3d ed.) (indicating permissive interventions are discretionary). Most of the Vermont
cases that consider intervention by right also consider permissive intervention. See, e.g., Helm,
139 Vt. at 227. The trial court must evaluate whether the cases are sufficiently intertwined to
allow intervention. See id.

        The Court concludes York should not be allowed to intervene. In this case, SVC sues
Beckwith for fraud and conversion. In the New York case, York sues SVC and Beckwith for
breach of contract. Although both cases touch on Beckwith’s fraudulent activities, the two
cases are not dependent on each other. This Court may decide whether Beckwith stole from
SVC without deciding any of the issues of SVC’s agreement with York. Similarly, the Northern
District of New York may decide whether a breach occurred without determining the issues in
this case.

        As noted at the outset, the property sought to be attached by Plaintiff, and coveted as
well by proposed intervenors, may conceivably be subject to execution to satisfy the damages
claimed by both SVC and York in the event of judgments in favor of either, but it is otherwise
unrelated to the claims in the New York case. Furthermore, as argued by Plaintiff, proposed
intervenors have established no procedural basis for an assertion in this Court of their own
claim for attachment, most importantly because the claim is unconnected to any pending
complaint here. V.R.C.P. 4.1(b)(2). Indeed, while Plaintiff’s have accurately characterized the
claim as bold, the Court is compelled to a harsher conclusion: having established no legal basis
for their request for an attachment, proposed intervenors’ requested relief must be seen as
frivolous.



       WHEREFORE, it is hereby ORDERED :
       The Court DENIES York Street Management’s Motion to Intervene.

Electronically signed on April 02, 2014 at 03:40 PM pursuant to V.R.E.F. 7(d).


______________________________________
John P. Wesley
Superior Court Judge
