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Discount Payment Processing, Inc v. Applied Card Systems

July 21, 2011

DISCOUNT PAYMENT PROCESSING, INC., PLAINTIFF,
v.
APPLIED CARD SYSTEMS, INC., DEFENDANT.



The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge

MEMORANDUM OPINION AND ORDER OF COURT

Presently before the Court is the MOTION TO INTERVENE OF PORTFOLIO SPECIALTIES LLC, with brief in support (Document No. 35), the OPPOSITION TO PORTFOLIO SPECIALTIES, LLCS MOTION TO INTERVENE filed by Defendant Applied Card Systems, Inc. (Document No. 39), and the RESPONSE TO PORTFOLIO SPECIALTIES, LLCS MOTION TO INTERVENE filed by Plaintiff Discount Payment Processing, Inc. (Document No. 41), in which Plaintiff states that it does not oppose the Motion to Intervene.

Factual and Procedural History

On September 17, 2010, Plaintiff, Discount Payment Processing, Inc., filed the instant lawsuit in which it alleges that the decision of Defendant, Applied Card Systems ("Applied Card"), not to got forward with an asset purchase was a breach of a Letter of Intent entered into between the parties. Plaintiff contends that the Letter of Intent constitutes a binding contract between the parties. Plaintiff requests an order of specific performance which would require Applied Card to proceed forward with the transaction or, in the alternative, Plaintiff seeks damages for Applied Card‟s alleged breach of the Letter of Intent. Applied Card argues that there was never a binding contract between the parties because the parties never agreed to terms on, inter alia, a final purchase agreement.

Discovery in this matter was scheduled to close on July 8, 2011. A mediation session was held in this matter on June 30, 2011, and the discovery deadline was extended to August 12, 2011. On July 13, 2011, the Court was informed that the mediation was not successful and the case did not settle.

On July 5, 2011, Portfolio Specialties, LLC ("Portfolio Specialties") filed the instant Motion to Intervene. The matter has been fully briefed and is ripe for disposition.

Discussion

Portfolio Specialties moves for both mandatory and permissive intervention under Rule 24. According to the proposed Intervenor Complaint, prior to the "agreement" between Plaintiff and Applied Card, Applied Card "solicited the services of Portfolio Specialties requesting that Portfolio Specialties locate Portfolio Assets suitable for acquisition." Portfolio Specialties alleges that it is entitled to a brokerage fee for its services from Allied Card as it referred to Allied Card a " "ready, willing and able‟ seller in Plaintiff."

Mandatory intervention is governed by Rule 24(a) of the Federal Rules of Civil Procedure, which provides in relevant part:

(a) Intervention of Right. On timely motion, the court must permit anyone to intervene who:

(2) claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant‟s ability to protect its interest, unless existing parties adequately represent that interest.

Fed.R.Civ.P. 24(a)(2). The United States Court of Appeals for the Third Circuit has held that a prospective intervenor must satisfy a four-part test for intervention as of right, showing that (i) the application for leave to intervene was timely, (ii) the prospective intervenor has a sufficient interest in the underlying litigation, (iii) there is a threat that the prospective intervenor‟s interest will be impaired or affected by the disposition of the underlying action, and (iv) the existing parties to the action do not adequately represent the prospective intervenor‟s interests. Liberty Mut. Ins. Co. v. Treesdale, Inc., 419 F.3d 216, 220 (3d Cir. 2005). A prospective intervenor must meet each of the these requirements. Id.

Rule 24 also provides for permissive intervention and permits a court, on timely motion, to allow anyone to intervene who has a claim or defense that shares a common question of law or fact with the main action Fed.R.Civ.P. 24(b)(1)(B). The Rule requires that, "[i]n exercising its discretion, the court must consider whether the intervention will unduly delay or prejudice the adjudication of the original parties‟ rights." Fed.R.Civ.P. 24(b)(3).

Timeliness is a factor for both mandatory and permissive intervention. Delaware Valley Citizens' Council for Clear Air v. Com. of Pa., 674 F.2d 970, 973 (3d Cir. 1982). In determining the timeliness of an intervention motion, a district court considers three factors: (i) how far the proceedings have progressed when the movant seeks to intervene, (ii) the prejudice that delay may cause the parties, ...


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