Guideone Elite Insurance Company v. Mount Carmel Ministries, 2:17-cv-00037

GuideOne paid a judgment fund into the court registry in an interpleader action after a prior judgment required it to pay Mount Carmel Ministries and Seaway Bank (later State Bank of Texas) for tornado damage to church property.
Mount Carmel and the mortgagee successor each claimed the judgment proceeds and disagreed on allocation.
Jernigan Copeland Attorneys, PLLC (discharged contingency counsel for Mount Carmel) moved to intervene to protect its claim for contingent attorneys’ fees and expenses.
Jernigan Copeland sought intervention as of right under Fed. R. Civ. P. 24(a)(2) and alternatively sought permissive intervention under Rule 24(b); Mount Carmel opposed intervention but did not contest timeliness.
The district court found Jernigan Copeland has an interest in the proceeds, that resolution of the interpleader could impair that interest, and that existing parties do not adequately represent the firm’s interest.
The court granted intervention as of right and, alternatively, permissive intervention, addressing and rejecting Mount Carmel’s Article III standing concerns based on Fifth Circuit precedent.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether discharged contingency counsel may intervene as of right under Rule 24(a)(2) to protect fee interest	Jernigan Copeland: has a legal interest in judgment proceeds under its contingency agreement; disposition could impair its ability to collect; existing parties won’t protect its interest	Mount Carmel: opposed intervention (argued lack of standing later via Town of Chester)	Granted: intervention as of right; firm satisfies Rule 24(a) factors under Gaines and Fifth Circuit law
Whether permissive intervention under Rule 24(b) is appropriate if Rule 24(a) fails	Jernigan Copeland: claims/issues share common questions with the interpleader; intervention promotes judicial economy and won’t unduly delay	Mount Carmel: opposed (generally)	Granted alternatively: court would permit intervention; issues sufficiently related and no undue delay or prejudice
Whether intervenor must independently satisfy Article III standing post-Town of Chester	Mount Carmel: cited Town of Chester to argue Jernigan Copeland lacks Article III standing to intervene	Jernigan Copeland & court: intervention seeks same relief (proceeds) as existing parties with standing; Fifth Circuit precedent allows intervention without independent Article III standing in such circumstances	Held: no independent Article III standing required because intervenor seeks relief already claimed by a party with standing (citing Ruiz and Town of Chester distinction)

Gaines v. Dixie Carriers, Inc., 434 F.2d 52 (5th Cir. 1970) (discharged contingency counsel may intervene to protect fee interest)
New Orleans Pub. Serv., Inc. v. United Gas Pipe Line Co., 732 F.2d 452 (5th Cir. 1984) (permissive intervention discretionary; consider delay and prejudice)
Taylor v. Commc’ns Grp., Inc. v. Southwestern Bell Tel. Co., 172 F.3d 385 (5th Cir. 1999) (four-factor test for intervention as of right under Rule 24(a)(2))
Ruiz v. Estelle, 161 F.3d 814 (5th Cir. 1998) (intervenor need not independently satisfy Article III where relief sought is same as an existing party with standing)
Town of Chester v. LaRoe Estates, Inc., 137 S. Ct. 1645 (2017) (clarifies Article III standing requirements for intervenors seeking relief not requested by a party with standing)