This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
STATE OF MINNESOTA
IN COURT OF APPEALS
Craig A. Swanson,
Upper Midwest Industries, Inc., et al.
Brian C. Beich, et al.,
Filed March 27, 2001
Hennepin County District Court
File No. CT-97-006651
Cary B. Johnson, Jerome A. Miranowski, Michael F. Cockson, Oppenheimer Wolff & Donnelly, Suite 3400, Plaza VII Office Tower, 45 South Seventh Street, Minneapolis, MN 55402 (for respondent)
Richard T. Ostlund, Randy G. Gullickson, Lindquist & Vennum, P.L.L.P., 4200 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402-2205 (for appellants)
Considered and decided by Toussaint, Chief Judge, Klaphake, Judge, and Foley, Judge.*
Appellants Brian C. Beich, Mark R. Engel, Mark J. Olson, Dave Schusterich, and Daniel C. Carlsen challenge an order denying their motion to intervene as a matter of right in this minority shareholder case brought by respondent Craig A. Swanson against Upper Midwest Industries (UMI) and its majority shareholder, David Carlsen. See Minn. R. Civ. P. 24.01 (intervention of right); Minn. Stat. § 302A.751 (2000) (authorizing court to grant equitable relief in shareholder litigation). The trial court denied appellants’ motion to intervene because it was untimely. The court also concluded that any issues appellants “might wish to advance have been and will continue to be adequately presented by able counsel for defendant corporation and its president, David Carlsen.”
Appellants argue that the trial court erred in denying their motion to intervene without granting them the right to submit a brief and affidavits, as required by Minn. R. Gen. Pract. 115. Appellants also argue that the trial court erred in denying their motion as untimely, given the requirement under Minn. Stat. § 302A.751 that their expectations and interests as minority shareholders be considered when determining a remedy.
Because appellants’ motion was untimely and because appellants’ interests are adequately represented by the existing parties, we affirm.
Appellants argue that the trial court erred by denying them an opportunity to file a brief and affidavits, and conduct a hearing as required by Minn. R. Gen. Pract. 115.04. This rule deals with non-dispositive motions and requires a moving party to serve its documents 14 days prior to the scheduled hearing date. Id. The time limits of rule 115 are intended to give adequate notice to parties and to provide the court with the opportunity to prepare for and promptly rule on the motion. Minn. R. Gen. Pract. 115.01(b). The court “may” modify the time limits “if the interests of justice * * * require.” Minn. R. Gen. Pract. 115.07.
Even if the trial court erred by failing to strictly follow the time limits of rule 115, the error was harmless. Appellants were given an opportunity to be heard, and the court actually considered their arguments and affidavits, ruled on their motion, and issued an order from which they were able to perfect an appeal. Under these circumstances, any error made by the trial court in failing to schedule a formal hearing on appellants’ motion was harmless. See Minn. R. Civ. P. 61 (court must “disregard any error or defect in the proceeding which does not affect the substantial rights of the parties”).
An order denying intervention of right is appealable, and this court will “independently assess the appropriateness” of such an order. Norman v. Refsland, 383 N.W.2d 673, 675-76 (Minn. 1986).
Minn. R. Civ. P. 24.01 provides:
Upon timely application anyone shall be permitted to intervene in an action 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.
The rule requires a party seeking intervention to (1) timely apply for intervention; (2) possess an interest relating to the transaction which is the subject of the action; (3) demonstrate that disposition of the action may impair or impede the party’s ability to protect that interest; and (4) show that the party is not adequately represented by the existing parties. Minneapolis Star & Tribune Co. v. Schumacher, 392 N.W.2d 197, 207 (Minn. 1986). The trial court here found that appellants failed to satisfy the first and last of these criteria, because their application was untimely and because their interests were adequately represented by counsel for UMI and Carlsen.
In determining whether a motion to intervene is timely, a court may consider any prejudice to the parties already in the lawsuit. Engelrup v. Potter, 302 Minn. 157, 165-66, 224 N.W.2d 484, 488-89 (1974) (intervention allowed 10 months after action commenced, where no substantive rights of any party yet decided and intervention would raise no new issues); BE & K Constr. Co. v. Peterson, 464 N.W.2d 756, 758 (Minn. App. 1991) (intervention timely where no rights yet adjudicated and no new issues sought to be introduced which would prejudice existing parties). Prejudice may exist, however, where a nonparty seeks to intervene in the later stages of a proceeding. SST, Inc. v. City of Minneapolis, 288 N.W.2d 225, 230 (Minn. 1979) (intervention untimely where party was personally involved in trial preparations, physically present every day at trial, but delayed until unfavorable decision rendered); State Auto. & Cas. Underwriters v. Lee, 257 N.W.2d 573, 576 (Minn. 1977) (post-trial intervention untimely where party knew about action but merely waited to see if decision would be favorable).
A late intervention may be excusable if the potential intervenor was unaware of the proceedings and if justice favors allowing intervention. Erickson v. Bennett, 409 N.W.2d 884, 886-87 (Minn. App. 1987) (motion to intervene timely even if brought after default hearing and judgment is entered, where potential intervenor had insufficient notice of proceedings and brought motion immediately after learning of default); Blue Cross/Blue Shield of Rhode Island v. Flam, 509 N.W.2d 393, 396 (Minn. App. 1993), review denied (Minn. Feb. 24, 1994) (court improperly refused to grant intervention where would-be intervenor treated as though it were party, allowed would-be intervenor to participate in settlement, addressed claim on merits, and entered judgment denying claim).
Here, the court concluded that intervention was untimely because at no time during the 36-month pendency of this litigation did appellants indicate a desire to intervene, even though several of them testified during the two-week trial, were on UMI’s board of directors at that time, and remain UMI directors, employees, and minority shareholders. The court further emphasized that appellants did not seek to intervene until the jury returned an adverse verdict against UMI and Carlsen. We agree with the trial court that appellants’ request to intervene was untimely.
The trial court also determined that intervention was unnecessary because appellants’ interests are fully represented by the existing defendants, UMI and Carlsen. When one of the parties currently participating in the action is already vigorously pursuing the claim or defense sought to be advanced by a potential intervenor, intervention may be denied on the grounds that a present party is able to protect the interest. State ex rel. Donnell v. Jourdain, 374 N.W.2d 204, 206 (Minn. App. 1985) (where interests of intervenor adequately represented by existing party, who had real stake in litigation and vigorously defended rights, intervention properly denied). A party must establish specific facts or reasons why rights will be impaired or why the existing parties do not adequately represent the party. Husfeldt v. Willmsen, 434 N.W.2d 480, 482-83 (Minn. App. 1989).
In this case, appellants complain that an adverse judgment will harm them financially and imperil UMI’s and their own bank loan agreements. Carlsen owns approximately 65 percent of the UMI stock; although his financial interests are greater than appellants’ are, he makes identical arguments. As a fellow shareholder, his interests in ensuring the continuing viability of the corporation and minimizing its damages are co-extensive with those of appellants. The trial court thus did not err in assuming that the existing parties will adequately represent appellants’ interests.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.