In Charles vs. Consumers Insurance the underinsured motorist insurer moved to intervene in insured’s action, circuit court granted intervention, then dismissed insurer based on an allegation that insurer initially denied liability. “[A]n uninsured or underinsured motorist carrier has an absolute right to intervene in a lawsuit brought by its policyholder against an . . . underinsured motorist [,] steps into the shoes of the alleged tortfeasor and assumes an adversarial position to that of the insured.” Initial denial does not negate that right, as it does the contractual grounds for permissive intervention, and settlement with tortfeasor in reliance on denial of coverage does not support equitable estoppel. Therefore, insurer was entitled to notice of a hearing on liability and damages.
The issue is whether the plaintiff’s underinsured motor vehicle (“UIM”) insurer has a right to intervene in plaintiff’s liability action against the underinsured motorist when the UIM insurer first denied that underinsured motorist coverage applied, but later determined that such coverage may apply, conceding such at the time of the relevant intervention ruling and prior to trial in the liability action against the underinsured motorist. We hold that, under these facts, the UIM insurer does have a right to intervene to contest the underinsured motorist’s liability and/or damages.
A party seeking intervention under this rule must show “1) an interest relating to the property or transaction which is the subject of the action; 2) that the applicant’s ability to protect such interest is impaired or impeded; and 3) that the existing parties are inadequately representing the applicant’s interest.” Stafford v. Kite, 26 S.W.3d 277, 279 (Mo. App. W.D. 2000).
Generally, when an insured files suit against an uninsured motorist (“UM”) or an underinsured motorist (“UIM”), there is no debate under Missouri law that the insured’s UM/UIM insurance carrier has an interest that may be impaired or impeded if the UM/UIM carrier is not allowed to intervene to contest the issues of liability and/or damages. Pollock v. Searcy, 816 S.W.2d 276, 278 (Mo. App. S.D. 1991).
As the terms of Rule 52.12(a) make clear, an intervenor, at the time of its intervention, need not concede that it will be bound by the judgment. Beard v. Jackson, 502 S.W.2d 416, 418-19 (Mo. App. 1973). Rather, it is the potential for liability under an underinsurance clause that triggers the “interest” recognized by Rule 52.12(a). See id.
The initial denial of coverage made by Appellant Consumers Insurance (“Consumers”) did not prevent Consumers from changing its position at the time of intervention. Consumers is not attempting to assert any contractual right. Its right to intervene in this situation springs—not from the insurance contract—but from Rule 52.12(a). Thus, the cases cited by Respondent Bradford Charles, which hold that an insurer cannot rely on its contractual rights after having itself breached the contract, do not apply here.
The only issues are whether Consumers claimed an interest in the subject of Charles’s lawsuit; whether that interest may be impeded or impaired by the litigation’s outcome; and whether the tortfeasor adequately represents the interest. Each of those issues are resolved in a manner that requires that Consumers be permitted to intervene. Since the circuit court denied Consumers the right to intervene, the judgment must be reversed.