United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER DENYING SOUTHFIELD VACANT LAND,
LLC'S MOTION TO INTERVENE (ECF NO. 47)
F. Cox United States District Court Judge.
protect its mortgage on vacant land, a lender moves to
intervene in this shareholder dispute. Plaintiff and
Defendants oppose the lender's intervention.
the lender seeks to intervene solely to protect its own
contingent claim on Defendants' alleged asset, it lacks
the substantial legal interest required for intervention as
of right. Moreover, any interest that it does have will be
adequately represented by the Defendants. And, because the
motion was untimely and the circumstances do not support
permissive intervention, that request also fails.
Accordingly, the Court will deny the motion to intervene.
Morteza Katebian alleges that Defendants Arash Missaghi,
Laila Alizadeh, and Troy Wilson (the “Individual
Defendants”) forged documents that purported to
transfer his total ownership interest in Defendant Liberty
& York to Alizadeh. In this lawsuit, Plaintiff seeks a
declaratory ruling on whether he or Alizadeh owns Liberty
& York, and alleges counts for common law conversion,
statutory conversion, and civil conspiracy. In short,
Plaintiff and Defendants are fighting over who actually owns
Liberty & York and whether the Individual Defendants
stole, and conspired to steal, Plaintiff's ownership
& York sits atop a somewhat complicated corporate
structure. It is the sole shareholder of Skymark Properties
Corporation, which in turn is the sole member of a series of
limited liability companies including Skymark Properties II,
LLC. (“Skymark II”). When the Individual
Defendants controlled Liberty & York and its
subsidiaries, Skymark II conveyed vacant land in Southfield,
Michigan (“the Southfield Property”) to Skymark
Properties Vacant Land, LLC (“Skymark Vacant
Land”). The next day, Skymark Vacant Land granted
a mortgage on the Southfield property to another
non-Libery-&-York company, Southfield Vacant Land, LLC
(“Intervenor”). This mortgage secured a $1, 000,
000 loan from Intervenor to Skymark Vacant Land, .
Plaintiff contends that he-not the Individual Defendants that
approved the conveyance-is the rightful owner of Liberty
& York and its subsidiaries, he filed a quiet-title
action against Intervenor in Oakland County Circuit Court,
seeking to invalidate this allegedly unauthorized conveyance
and mortgage. Plaintiff filed the state lawsuit on January 2,
2019, roughly two months after he filed this federal lawsuit
against the Defendants. The state case was assigned to the
Honorable Martha D. Anderson.
his state court complaint, Plaintiff also filed a motion to
enjoin Intervenor from foreclosing on the mortgage, which by
that time was in default. The state court granted that motion
and stayed the foreclosure for thirty days. Ultimately, the
parties in the state court case stipulated to the entry of an
order staying the foreclosure until Judge Anderson ruled on
the Intervenor's motion for summary disposition.
represents that, on April 22, 2019, the state court held a
status conference, at which the parties and the court agreed
to three things: (1) Intervenor would file a motion for
summary disposition; (2) Plaintiff would file a motion to
stay the state case until this Court disposed of the federal
case; and (3) the court would hear both motions at the same
April 26, 2019, Intervenor filed its motion for summary
disposition, arguing that Plaintiff did not have personal
standing to bring the quiet-title claim. Plaintiff responded,
arguing that, until this Court decides who owns Liberty &
York, the validity of the mortgage cannot be decided by the
state court. Plaintiff also filed his motion to stay the
state court proceedings until this Court's decision.
state court scheduled a hearing on Plaintiff's motion to
stay but not Intervenor's motion for summary disposition.
Intervenor represents that, as the hearing approached,
Plaintiff agreed to withdraw the motion to stay because the
court had not scheduled a simultaneous hearing for the motion
for summary disposition. Intervenor represents that, because
Plaintiff agreed to withdraw the stay motion, the state court
cancelled the scheduled hearing and Intervenor did not file a
response. “Despite this, on July 10, 2019, the [state]
court entered its order granting the stay motion.” (ECF
No. 47, PageID 937). Accordingly, the state court action
appears to be stayed until this Court makes its decision.
Intervenor remains enjoined from foreclosing on the
unhappy with the court's decision to stay the state case,
Intervenor has now moved to intervene in this case.
Intervenor argues that it meets the requirements for
intervention of right under Fed.R.Civ.P. 24(a)(2) or, in the
alternative, the requirements for permissive intervention
under Fed.R.Civ.P. 24(b)(1)(B). Plaintiff and Defendants
oppose the motion to intervene.
Rule 24, there are two avenues by which a non-party can
intervene in a pending case: Intervention of Right and
Permissive Intervention. Intervenor invokes both avenues in