On October 1, 2021, Justice Karalunas of the Onondaga County Commercial Division issued a decision in Inner Harbor Phase I, L.P. v. COR Inner Harbor Co., LLC, 2021 NY Slip Op. 51083(U), denying a motion to intervene by a limited partner in a suit by the partnership when the limited partner’s claims were the same as the partnership’s, explaining:
Zhiyao Ding (“proposed intervenor”), a limited partner in plaintiff Inner Harbor, seeks permission to intervene pursuant to CPLR §§ 1012 and 1013 or, in the alternative, permission to obtain amicus curiae status to oppose COR LLC’s motion to dismiss the second, third, fourth and fifth causes of action.
CPLR § 1012 provides in pertinent part:
(a) Intervention as of right. Upon timely motion, any person shall be permitted to intervene in any action:
. . .When the representation of the person’s interests by the parties is or may be inadequate and the person is or may be bound by the judgment.
CPLR § 1012(a).
CPLR § 1013 governs permissive intervention and provides in pertinent part:Upon timely motion, any person may be permitted to intervene in any action when a statute confers a right to intervene in the discretion of the court, or when the person’s claim or defense and the main action have a common question of law or fact.
CPLR § 1013.
“Whether intervention is sought as a matter of right under CPLR 1012(a), or as a matter of discretion under CPLR 1013, is of little practical significance since a timely motion for leave to intervene should be granted, in either event, where the intervenor has a real and substantial interest in the outcome of the proceedings.
A real and substantial interest in the outcome of the proceedings requires more than “mere interest in the success of one of the parties. The fact that an individual in some manner may be affected by the outcome of the proceeding is insufficient to form the basis for intervention. A third party will be permitted to intervene only when the third party will be bound by the judgment to the extent that the judgment will adjudicate the legal rights, duties and or obligations of the third party. In other words, the proposed intervenor must have an actual and ultimate interest in the results of the litigation. This interest has been defined as a property interest or some duty or right devolving upon or belonging to the person seeking the right to intervene. A proposed intervenor must establish that the interest which he seeks to protect is sufficient to provide the necessary standing.
To have standing, a party must have an injury in fact, i.e., an actual legal stake in the matter being adjudicated. Thus, a plaintiff generally has standing only to assert claims on behalf of itself.
Noticeably absent from the complaint proposed by Ding are any allegations that differ from those in the Inner Harbor complaint. Indeed, the complaint and proposed intervenor’s complaint are virtually identical: they contain the same causes of action and factual allegations. Nowhere in the proposed intervenor’s complaint does Ding allege a direct injury independent of the injury claimed by Inner Harbor. The proposed intervenors do not allege (nor could they) privity with COR LLC or third-party beneficiary status, and they do not allege that COR LLC owed to them any direct duty.
While the proposed intervenors may suffer financial loss by an adverse result in the present litigation, any loss is indirect; any debt owed by COR LLC is to Inner Harbor, not to the individuals who invested in Inner Harbor. Under these facts, the proposed intervenors lack standing to assert a claim against COR LLC. Accordingly, the motion to intervene is DENIED.
(Internal quotations and citations omitted).