ELFVIN, S.U.S.D.J.
Plaintiffs bought this action under diversity jurisdiction, 28 U.S.C. § 1332(a)(1), April 18, 1997 raising claims for medical malpractice and loss of consortium. An Amended Complaint was filed May 7, 1998. Discovery ended October 1, 1998 and this case is currently scheduled for trial beginning June 25, 2001. HealthNow New York, Inc. d/b/a Blue Cross and Blue Shield of Western New York, Inc. ("Blue Cross") filed a motion January 18, 2001 to intervene as of right under Rule 24(a)(2) of the Federal Rules of Civil Procedure ("FRCvP") or, in the alternative, by permission under FRCvP 24(b)(2). Both plaintiffs and defendant oppose Blue Cross's motion to intervene. Presently before this Court is Blue Cross's motion to intervene.
Plaintiffs originally did not oppose the motion to intervene because they believed that the insurance policy contained a subrogation clause. However, upon reviewing defendant Richter's opposition, plaintiffs came to the conclusion that the policy did not contain a subrogation clause and accordingly opposed the motion. Nichols February 28, 2001 Aff. ¶¶ 2-6.
Defendant performed a hysterectomy on plaintiff Nancy Jones April 17, 1996. Plaintiffs allege that defendant committed medical malpractice both in the performance of the hysterectomy itself and by failing to properly diagnose and treat her post-surgical complications April 22-23, 1996. At the time of her hysterectomy and thereafter, Nancy was covered by health insurance through Blue Cross. Nancy incurred $106,621.58 in medical expenses during the period from April 17, 1996 through February 16, 2000 which were covered by Blue Cross. Blue Cross asserts that these medical expenses were caused by the alleged malpractice of defendant and that it therefore has the right to recover these amounts from defendant through subrogation if plaintiffs are successful in establishing that defendant committed medical malpractice. Blue Cross asserts that it has a legal right to subrogation based upon a purported clause in the medical insurance contract which states:
An Employee Welfare Benefit Plan offered by her employer, Olean Wholesale Grocery, and administered by Blue Cross. Mot. to Intervene by Blue Cross at 2.
"In some cases we may have made payment even though you had coverage under another policy. Under these circumstances, it will be necessary for you to refund to us the amount by which we should have reduced the payment we made. We also have the right to recover the overpayment from the other health benefits program if we have not already received payment from that other program. You must sign any document which we feel is needed to help us recover any overpayment." Mem. of Law in Supp. of Mot. to Intervene by Blue Cross at 3.
In the alternative, Blue Cross argues that it has the right to equitable subrogation.
"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." FRCvP 24(a)(2).
In order to qualify for intervention as of right pursuant to FRCvP 24(a)(2) a proposed intervener must satisfy four requirements — viz. (1) that its motion to intervene is timely, (2) that it claims an interest relating to the subject matter of the action, (3) that its interest may be impaired by the disposition of the action and (4) that its interest is not adequately protected by an existing party. Restor-A-Dent Dental Laboratories, Inc. v. Certified Alloy Products, Inc., 725 F.2d 871, 874 (2d Cir. 1984). An application to intervene will be denied if the proposed intervenor fails to satisfy any one of the above requirements. United States v. State of New York, 820 F.2d 554, 556 (2d Cir. 1987).
The first requirement to intervene as of right is the filing of a timely motion to do so. Determining whether a motion to intervene is timely is determined from the totality of the circumstances and is within the sound discretion of the trial judge. United States v. Pitney Bowes Inc., 25 F.3d 66, 70 (2d Cir. 1994).
"Timeliness defies precise definition, although it certainly is not confined strictly to chronology. Among the circumstances generally considered are: (1) how long the applicant had notice of the interest before it made the motion to intervene; (2) prejudice to existing parties resulting from any delay; (3) prejudice to the applicant if the motion is denied; and (4) any unusual circumstances militating for or against a finding of timeliness." Ibid.
The first consideration in determining whether a motion to intervene is timely is how long the proposed intervenor had notice of its interest before moving to intervene. From April 17, 1996 through February 16, 2000 — a period of less than four years — Nancy submitted claims totaling $106,621.58. Blue Cross apparently never inquired into these claims until April 17, 2000 when it sent a form to plaintiffs requesting further information on an inpatient procedure Nancy underwent in January 19-21, 2000. Reply Decl. in Further Supp. of Mot. to Intervene ¶ 4, Ex. A. Plaintiffs returned this form May 3, 2000 stating that Nancy "had reconstructive surgery + repaired hernia due to problems of hysterectomy in 5/96" and that an attorney was involved in the matter. Id. ¶ 5, Ex. A. Blue Cross has submitted a printout of Nancy's claim information from April 17, 1996 through February 16, 2000 totaling $106,621.58 which states that it is in relation to "Accident Date 4/17/96 Type of Accident Possible Malpractice" and was "Issued [to] M. Brown 6/1/00." Id. Ex. D. On June 7, 2000 Blue Cross wrote plaintiffs' attorney requesting that he protect its subrogation interest in the case in return for a percentage thereof. Id. ¶ 6, Ex. B. Plaintiffs' counsel never responded and Blue Cross wrote him again August 24, 2000 requesting a response. Id. ¶¶ 6-7, Ex. C. Blue Cross filed its motion to intervene January 18, 2001, having received no response to its August 24, 2000 letter. Accordingly and as admitted by Blue Cross, it had actual knowledge of its subrogation rights for more than eight months before filing its motion to intervene. Reply Decl. in Further Supp. of Mot. to Intervene ¶ 9.
Blue Cross argues that, although it had notice of a subrogation claim, it did not have notice of the need to intervene until January 18, 2001, when it claims to have first learned that plaintiffs' counsel would not represent its interest as a result of his failure to respond to its letters requesting such representation. However, Blue Cross has admitted that the interests of the existing parties to this action are "adverse to those of Intervenor Plaintiff" — Mem. of Law in Supp. of Mot. to Intervene at 2 — and that "the right of Blue Cross to reimbursement from Plaintiffs creates a potential conflict of interest." Id. at 13. In light of Blue Cross's own statements that there is a potential conflict of interest between it and plaintiffs and that its interests are adverse to those of plaintiffs, it was unreasonable for Blue Cross to believe that plaintiffs' attorney would agree to represent its interests — to the detriment of his own clients — and to delay making a motion to intervene on such basis. Accordingly, even assuming that Nancy's claims in excess of $100,000 in less than four years did not put Blue Cross on notice of a possible claim for subrogation, by its own admission it had actual knowledge of its claim more than eight months before it moved to intervene.
This Court is aware that plaintiffs' counsel did agree to represent Blue Cross after it filed its motion to intervene; however he states that he did so upon the belief that Blue Cross had a contractual right to subrogation and that he withdrew this agreement when he learned that it did not. Nichols February 28, 2001 Aff. ¶¶ 3-4; Reply Decl. in Further Supp. of Mot. to Intervene Ex. A (McClaren February 15, 2001 Letter/Representation Agreement).
The second and most important consideration in determining whether a motion to intervene is timely is any prejudice to the existing parties resulting from the delay. United States v. International Business Corporation, 62 F.R.D. 530, 541-542 (S.D.N.Y. 1974). Blue Cross claims that "it is inconceivable how either Plaintiff or Defendant could establish prejudice if this intervention motion is granted." Mem. of Law in Supp. of Mot. to Intervene at 8. Discovery had closed in this case and it had already been scheduled for trial before Blue Cross sought to intervene. Were this Court to allow Blue Cross to intervene and file its complaint in intervention, this case would be removed from the trial calender and a new FRCvP 16(b) conference scheduled. This would postpone the trial in this case for at least another year. Furthermore, allowing Blue Cross to intervene would frustrate attempts between the present parties to settle this case because Blue Cross has stated that, if allowed to intervene, it will seek "to avoid settlement in this action whereby the settlement proceeds are arbitrarily characterized as recovery of only "pain and suffering" thereby abolishing the Blue Cross right to reimbursement." Mem. of Law in Supp. of Mot. to Intervene at 8.
Accordingly, allowing Blue Cross to intervene would result in substantial prejudice to the existing parties by postponing the already scheduled trial by at least a year and frustrating the efforts of the parties to settle this case.
The third consideration in determining whether a motion to intervene is timely is any prejudice to the applicant if the motion is denied. The statute of limitations on plaintiffs' medical malpractice claim has expired and Blue Cross is therefore barred from instituting a separate subrogation action seeking reimbursement from defendant for its expenditures relating to such. Blue Cross will therefore be prejudiced if not allowed to intervene because it is barred from seeking to recover from defendant in another action; however the prejudice that Blue Cross will suffer by not being allowed to intervene is reduced by the fact that it had notice of its claim and could have moved to intervene more than eight months before it did so.
The fourth consideration in determining whether a motion to intervene is timely is any unusual circumstances militating for or against a finding of timeliness. These considerations militate in favor of a finding that the motion to intervene is untimely because whether Blue Cross would even be able to recover its expenditures from defendant if allowed to intervene in this case is an issue in light of C.P.L.R. 4545. Due to section 4545 — which prohibits plaintiffs from recovering from defendant medical expenses that had already been compensated by insurance ___, the parties to his action state that they did not engage in discovery relating to Nancy Jones's medical expenses beyond a request by defendant that plaintiffs "[i]dentify the total amounts of special damages for the physician's services as a result of the events complained of, specifically the medical supplies, hospital expenses, physician's charges, nurse's expenses, services and other." Def.'s Interrog. ¶ 10. Plaintiffs responded to such by stating that "plaintiff has not compiled the total amount of special damages, however the plaintiff will forward these calculations to the defendant once ascertained." Pls.' October 7, 1999 Resp. to Def.'s Interrogs. ¶ 10.
"In any action for medical *** malpractice where the plaintiff seeks to recover for the cost of medical care ***, evidence shall be admissible for consideration by the court to establish that any such past or future cost or expense was or will, with reasonable certainty, be replaced or indemnified, in whole or in part, from any collateral source, such as insurance ***. If the court finds that any such cost or expense was or will, with reasonable certainty, be replaced or indemnified from any collateral source, it shall reduce the amount of the award by such finding, minus an amount equal to the premiums paid by the plaintiff for such benefits for the two-year period immediately preceding the accrual of such action and minus an amount equal to the projected future cost to the plaintiff of maintaining such benefits. In order to find that any such future cost or expense will, with reasonable certainty, be replaced or indemnified by the collateral source, the court must find that the plaintiff is legally entitled to the continued receipt of such collateral source, pursuant to a contract or otherwise enforceable agreement, subject only to the continued payment of a premium and such other financial obligations as may be required by such agreement." N.Y. C.P.L.R. 4545(a).
Plaintiffs later supplemented their response to this interrogatory by stating that, "[u]pon information and belief, the plaintiffs have suffered approximately one hundred and six thousand, six hundred and twenty one dollars, and fifty-eight cents ($106,621.58) in medical costs relating to this action. These costs include physician charges, hospital expenses, ambulance costs, radiology charges, medical equipment, and medications. The total amount of medical costs is continuing, and as such, accumulates in an undetermined future amount." Pls.' June 16, 2000 Supp. Resp. to Def.'s Interrogs. ¶ 10. This amount however, correlates exactly to the amount listed by Blue Cross, was made two weeks after Blue Cross had compiled such figure and includes all of Nancy Jones's expenses including those unrelated to the alleged malpractice. Accordingly, were Blue Cross allowed to intervene, additional discovery would be necessary to determine which of Nancy Jones's medical expenses were in fact necessitated by the alleged medical malpractice and whether section 4545 bars an insurer seeking subrogation from recovering such expenses from defendant would also have to be decided by this Court.
Based upon the above considerations this Court finds that the motion of Blue Cross to intervene is untimely and, because the failure to file a timely motion bars a party from intervening as of right, this Court need not address the remaining three requirements. In the alternative to intervention as of right, Blue Cross seeks to intervene by permission pursuant to FRCvP 24(b)(2).
"Upon timely application, anyone shall be permitted to intervene in an action *** when an applicant's 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." FRCvP 24(b)(2).
"The court must consider whether granting permissive intervention will unduly delay or prejudice the adjudication of the rights of the existing parties." In re Holocaust Victim Assets Litigation, 225 F.3d 191, 202 (2d Cir. 2000). This Court denies the application of Blue Cross to intervene by permission because, as discussed above, the motion to intervene was untimely filed, would delay the trial and would result in prejudice to the original parties.
Accordingly, it is hereby ORDERED that the motion of Blue Cross to intervene is denied and that this case shall proceed to trial June 25, 2001 as scheduled.