NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA v. William Bertram & Fell, Bolliger, Inc., et al., Proposed Intervenors-Appellants.

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Supreme Court, Appellate Division, First Department, New York.

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., Plaintiff-Respondent, v. ASHFORD HOTELS, LTD., et al., Defendants-Respondents, William Bertram & Fell, Bolliger, Inc., et al., Proposed Intervenors-Appellants.

Decided: January 23, 1997

Before WILLIAMS, J.P., and TOM, MAZZARELLI and ANDRIAS, JJ. Andrew L. Schlafly, for Proposed Intervenors-Appellants.

Appeal from order, Supreme Court, New York County (Diane Lebedeff, J.), entered August 8, 1995, which, in a declaratory judgment action involving plaintiff insurer's obligation to defend and indemnify defendants in connection with lawsuits alleging fraud and mismanagement of the corporate defendant by the individual defendants, denied appellants' motion to intervene, and granted the parties' motion to discontinue the action, unanimously dismissed as academic, without costs.

 Since no stay of the motion court's order was obtained by appellants proposed intervenors, and the insurance proceeds that were the subject of the instant declaratory action have now been distributed to defendants, the relief appellants seek is no longer available, rendering the appeal academic.   There is no proof that appellants have reduced their claims against the corporate defendant to a judgment, indeed, there is not even any proof that they have asserted any claims against it other than the Federal RICO action that has now been dismissed.   There is no merit to their argument that as “undisputed creditors” of the corporate defendant they have a right under CPLR 1012(a)(3) to intervene in the instant declaratory judgment action between it and its insurer.   Nor is there merit to appellants' claim, raised for the first time on appeal, that the proposed transfer of a portion of the insurance proceeds by the corporate defendant to one of its officers, who was himself insured under the policy, constitutes a fraudulent conveyance under Debtor and Creditor Law § 273.