US District Court holds that insurer with $20,000 limit cannot intervene in case in federal court because of diversity jurisdiction

A vehicle driven by Susan Ingham and owned by William Ingham struck a vehicle driven by Ansley Dunbar.  Dunbar's vehicle was insured by Patriot Insurance Company.  The Inghams' vehicle was insured by Progressive Direct Insurance Company. 

Patriot made payments to Dunbar for her injuries pursuant to her underinsured motorist coverage. 

A digression:  Underinsured motorist coverage provides coverage to the injured insured above the policy limit of the person responsible for the accident. In other words, if you have $300,000 of underinsured motorist coverage on your own car insurance, and you get hit by some idiot texting while driving with a $20,000 policy limit, your own insurance will cover your proven damages up to $300,000. 

Underinsured motorist coverage and its sibling uninsured motorist coverage (which covers you if you are injured by someone with no insurance or in a hit and run) are the most important coverages you can buy.  While most insurance will pay other people injured by your negligence, underinsured and uninsured motorist coverage protects you from other people's negligence. 

If you don't have underinsured and uninsured motorist coverage, call your agent right now and add it to your policy.  If you do have it, call your agent right now to discuss raising your coverage limits.

Back to the case:  After paying Dunbar for her injuries caused (allegedly) by the negligence of the Inghams, Patriot  brought a subrogation action against the Inghams.  (In a subrogation action an insurer who has paid a claim seeks reimbursement from the people responsible for the damages.) 

Progressive moved to intervene in the subrogation action, for the purpose of securing a coverage determination as to the limits available under Progressive's policy. 

In Patriot Ins. Co. v. Ingham, 2019 WL 5394503 (unpublished), the United States District Court for the District of Massachusetts held that Progressive could not intervene as of right because the question of the applicable limit would not arise unless and until the Inghams were found to be liable for the accident.

The court also held that Progressive could not intervene under the permissive intervention rule.  The Patriot claim was in federal court under diversity jurisdiction, which requires the claim to exceed $75,000.  In order to permissively intervene, Progressive's claim would also have to exceed $75,000.  Since its policy had a $20,000 limit (begging the question of why it was asking the court to determine the applicable limit), it did not meet the jurisdictional amount. 

The court held that the denial of intervention would not cause Progressive significant prejudice, as it could bring a separate action for declaratory judgment.  However, the court denied Progressive's motion to stay the lawsuit until Progressive filed its declaratory judgment action.