The U.S. District Court for the Northern District of California recently granted an insurer’s motion to intervene in an indemnity dispute between another insurer and an asbestos product supplier. Utica Mutual Insurance Co. v. Hamilton Supply Co., No. C 06-07846 SI (November 5, 2007).

In the case, the plaintiff insurance company sought a reformation of certain general liability insurance policies and a declaration that it had no duty to defend or indemnify the insured in asbestos-related personal injury lawsuits. The non-party insurance company, which had issued general liability insurance policies to the insured for different policy periods than the plaintiff, sought to intervene on the ground that a judgment in favor of the plaintiff insurer would impact the second insurer’s allocated level of liability.

The court identified the primary factors in its decision whether to allow intervention to be the guideposts set forth by Rule 24 of the Federal Rules of Civil Procedure: (1) the timeliness of the application to intervene; (2) the applicant’s interest in the matter; and (3) whether the disposition of the underlying action would affect the applicant’s interest. The court then ordered that the non-party insurer would be permitted to intervene, finding that its absence from the case would cause a “practical impairment of its interests as a result of the pending litigation” and that its intervention could result in a different disposition of the case.

A full copy of the court’s decision is available here.