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Glovis Alabama, LLC v. Richway Transportation Services, Inc.

United States District Court, S.D. Alabama, Southern Division

June 5, 2019

GLOVIS ALABAMA, LLC, Plaintiff/Counter-defendant,
v.
RICHWAY TRANSPORTATION SERVICES INC., Defendant/Counter-claimant.

          ORDER

          KRISTI K. DUBOSE, CHIEF UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on non-party Richardson Alabama Equipment Leasing, Inc.'s Rule 24(a) Motion to Intervene (Doc. 35) and Plaintiff's opposition thereto (Doc. 40).

         I. Background

         On November 12, 2018, Glovis initiated this action against Richway in the Circuit Court of Mobile County, Alabama (Glovis Alabama, LLC v. Richway Transp. Servs., Inc., 02-CV-2018-902866). (Doc. 1-1). Based on Richway's alleged indebtedness related to a contract regarding certain leased equipment, Glovis alleged breach of lease, replevin and unjust enrichment, and seeks an order for the release of property and for monetary damages ($370, 506), pre and post judgment interest, attorney's fees, and costs. On December 14, 2018, Richway removed this case to this Court on the basis of federal diversity subject matter jurisdiction. (Doc. 1). On December 21, 2018, Richway answered and counterclaimed against Glovis for "suit on sworn account pursuant to Ala. Code § 12-21-111," breach of contract, promissory estoppel, and fraud. (Doc. 2). Richway seeks $474, 524.65 in actual and liquidated damages, pre/post judgment interest, attorney's fees, and costs. (Id.) Richway denies that it is in default and/or that it owes any payments to Glovis, "because such amounts were deducted" from Glovis' "outstanding payables owed to Richway."

         On April 30, 2019, Richway moved to amend its answer/counterclaim because it discovered that the equipment at issue is not owned by Glovis: "[r]eview of State of Alabama Certificates of Title confirm the majority __ and likely all __of the Equipment is owned by Richardson Alabama Equipment Leasing, Inc….which is not a party to the Lease Agreement…Alabama Department of Revenue license and registration receipts similarly identify RAEL as the owner…." (Doc. 33 at 3). Richway also added a counterclaim for quantum meruit. While given the opportunity to file a response to Richway's motion for leave to amend (Doc. 34), none was filed by Glovis. On May 24, 2019, Richway's motion was granted, and on May 28, 2019, Richway filed its amended answer/counterclaims. (Doc. 37).

         On May 24, 2019, Richardson Alabama Equipment Leasing, Inc. (RAEL) filed a Rule 24(a)(2) motion to intervene.[1] (Doc. 35). In so doing, RAEL asserts that it, not Glovis, is the true owner of the leased equipment, and so seeks to intervene to protect its ownership and possessory rights. Specifically, per RAEL:

….Plaintiff…neither owns nor maintains any possessory interest in the Equipment…. The Equipment was acquired by Intervenor directly from Transcraft Corporation in June and July of 2016, and thereafter registered and titled in Intervenor's name. [ ] The Equipment has remained under Intervenor's ownership and control since it was acquired. [ ]
…Plaintiff does not maintain any legal ownership, possessory, or security interest in any of the Equipment at issue. Intervenor has not transferred, granted, or otherwise conferred any ownership, possessory, or security interest in the Equipment to Plaintiff. [ ] Intervenor and Plaintiff have not entered into any agreements with respect to the Equipment. [ ] Plaintiff….has never even been in possession of the Equipment…
…Plaintiff contends that is it has contractual and legal rights to immediate possession of the Equipment…despite a complete and utter absence of same. Plaintiff contends it may repossess, sell, or release the Equipment, despite not having any legal ownership or possessory interest in any of the Equipment in issue….Plaintiff may not “repossess” property that it never possessed to begin with, and cannot “sell” what it does not own.
….Intervenor…maintains the only legal ownership and possessory interest in the Equipment…not Plaintiff. Intervenor claims that right pursuant to State of Alabama Certificates of Title and Alabama Department of Revenue license and registration receipts…..

(Doc. 35 at 3-4 (footnotes omitted, emphasis in original)).

         On May 31, 2019, Glovis filed its opposition, contending that Richway is acting "surreptitious[ly]" and in bad faith with RAEL, to take Glovis' equipment without payment, when RAEL is not a necessary party. (Doc. 40). Glovis argues that the motion is untimely, RAEL is not necessary because it is not a party to the Glovis-Richway equipment lease agreement, "it could not logically be the owner" of the equipment per Richway's answers, and RAEL and Richway are related entities simply working together to avoid payment to Glovis.

         II. ...


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