## Facts

- A federal agency hired Desbuild, Inc. as prime contractor for exterior masonry repair, painting, and cleaning on a government project in Washington, D.C.
- Desbuild subcontracted with Atlantic Refinishing & Restoration, Inc. to perform work and supply materials.
- As required by the Miller Act, Desbuild provided a payment bond with Travelers Casualty and Surety Company of America as surety.
- Desbuild and Travelers had an indemnity agreement requiring Desbuild to indemnify Travelers for losses on the bond.
- Atlantic submitted invoices totaling about \$197,344.25 and alleged that \$97,281.25 remained unpaid.
- After the prime contract was terminated for cause, Atlantic sued Travelers (not Desbuild) under the Miller Act payment bond to recover the alleged unpaid subcontract balance.
- Desbuild moved to intervene as a defendant; Atlantic opposed, arguing Desbuild lacked a sufficient interest and that Travelers adequately represented any interest Desbuild had.

## Issues

1. Whether Desbuild was entitled to intervene as of right under Federal Rule of Civil Procedure 24(a)(2) based on its interest and indemnity exposure relating to the bond claim, potential impairment, and inadequate representation by Travelers.
2. Alternatively, whether the court should permit intervention under Rule 24(b) because Desbuild’s defenses shared common questions of law or fact with the bond action and intervention would not unduly delay or prejudice the existing parties.

## Decision

- The court granted Desbuild’s motion to intervene as a defendant.
- The court concluded Desbuild had a protectable interest tied to the bond dispute, including potential indemnity liability to Travelers.
- The court determined that resolving the action without Desbuild could, as a practical matter, impair Desbuild’s ability to protect its interests.
- The court found Travelers did not necessarily adequately represent Desbuild’s interests, given the possibility of differing incentives and litigation positions.
- The motion was treated as timely and not unduly prejudicial to the existing parties.

## Legal Principles

- Intervention as of right under Rule 24(a)(2) requires: (1) timeliness; (2) a significantly protectable interest relating to the property or transaction at issue; (3) a risk that disposition may impair the applicant’s ability to protect that interest; and (4) inadequate representation by existing parties.
- A bond principal’s contractual indemnity exposure to a surety may constitute a significantly protectable interest in a Miller Act suit against the surety.
- A surety’s defense of a bond claim does not automatically establish adequate representation of the principal; potential divergence in incentives and defenses may justify intervention.
- Permissive intervention under Rule 24(b) may be allowed when the intervenor’s claim or defense shares common questions of law or fact with the main action and intervention will not cause undue delay or prejudice.

## Conclusion

The court allowed the prime contractor to intervene in a subcontractor’s Miller Act payment-bond suit against the surety because the principal’s indemnity exposure and project-related defenses created a protectable interest that could be impaired absent participation and was not assured adequate protection by the surety alone.


Atl. Refinishing & Restoration, Inc. v. Travelers Cas. & Sur. Co. of Am., 272 F.R.D. 26 (D.D.C. 2010)