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Heritage Vill. II Homeowners Ass’n v. Weinberg - 5/21/2019

Arizona Court of Appeals Division One holds that (1) the timeliness of a motion to intervene is measured from when the movant has notice that its interests are not being adequately represented, and (2) the ability to file another lawsuit does not, by itself, preclude intervention.

A homeowners’ association sued a homeowner for alleged violations of the applicable covenants, conditions, and restrictions (“CC&Rs”).  The superior court granted declaratory relief to the homeowners’ association, but litigation continued over the remedial measures.  The board of the homeowners’ association eventually began to disagree on litigation strategy, and the majority voted to settle with the homeowner.  Other members of the association moved to intervene so they could oppose the settlement. 

Arizona Rule of Civil Procedure 24(a)(2) provides that a superior court must permit intervention when four conditions are satisfied: (1) the motion is timely, (2) the movants claim an interest relating to the subject of the action, (3) the movants show that disposition of the action may, as a practical matter, impair or impede their ability to protect their rights; and (4) the movants show that existing parties do not adequately represent their interests.  The superior court found that the movants failed to satisfy conditions one and three.  It therefore denied the motion to intervene and entered judgment approving the settlement and dismissing all claims.  The movants appealed.

As to condition one, the Court of Appeals agreed with the movants that timeliness is measured not from the inception of the case, but from when the movant has notice that its interests are no longer being adequately represented.  The motion to intervene was therefore timely because it was filed five days after the board of the homeowners’ association voted to accept the settlement.

The superior court held that the movants did not satisfy condition three because they could file a separate lawsuit.  The Court of Appeals rejected this interpretation of Rule 24(a)(2).  Because the rule requires only that movants show that the action “may” impair or impede their ability to protect their rights, the Court of Appeals concluded that the availability of an alternative forum does not, by itself, preclude intervention.  Here, the movants could not weigh in on the settlement without intervention, and the Court concluded that this might impair or impede their ability to protect their rights, even if they could bring another lawsuit.

The Court of Appeals therefore reversed the denial of the motion to intervene, vacated the judgment, and remanded.

Judge Morse authored the opinion of the Court, in which Judge Thompson and Vice Chief Judge Swann joined.

Posted by:  Josh Bendor

Posted On: 6/10/2019