Judge: Anne Richardson, Case: 22STCV29669, Date: 2024-03-14 Tentative Ruling

DEPARTMENT 40 - JUDGE ANNE RICHARDSON - LAW AND MOTION RULINGS
The Court issues tentative rulings on certain motions.The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) email Dept 40 by 8:30 a.m. on the day of the hearing (smcdept40@lacourt.org) with a copy to the other party(ies) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no email is necessary and all parties should appear at the hearing in person or by Court Call. 

Case Number: 22STCV29669    Hearing Date: March 14, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

I. Background

A. Complaint in Interpleader

On September 12, 2022, Plaintiff in Interpleader Progressive Select Insurance Company (Progressive) filed a Complaint in Interpleader.

The Complaint in Interpleader involves settlement proceeds held by Progressive as the insurer for Defendant Moris Sakhai (Sakhai), who was represented by Defendant in Interpleader Law Offices of Paul Kingston (Kingston Law) in an uninsured motorist claim, which resulted in a $14,000 settlement, $4,713.17 of which is contested by Kingston Law pursuant to an unresolved attorney’s lien on the settlement.

Progressive prays for: (1) a judgment decreeing that Defendants Moris Sakhai (Sakhai) and the Law Offices of Paul Kingston (Kingston Law) be ordered to interplead and litigate their claims on the subject matter of this interpleader, and be restrained from initiating any other actions against plaintiff relating to the subject matter of this interpleader; (2) a judgment decreeing that Progressive be discharged from liability to Sakhai and Kingston Law with respect to the interpleaded settlement amount deposited with the court; and (3) other relief as the Court deems just and proper.

B. Cross-Complaint in Interpleader

On December 6, 2022, Kingston Law filed a Complaint in Interpleader against Moris Sakhai stating what amounts to a breach of written contract claim—i.e., the Kington Law–Sakhai retainer agreement—for a third of the $14,000 settlement proceeds held by Progressive and due to Kingston Law as Sakhai’s legal representative under the parties’ retainer agreement arising from the uninsured motorist proceeding.

C. Settlement

On September 12, 2023, at a case management conference (CMC), counsel informed the Court that the parties had settled this action and requested a continuance to complete the related paperwork. The Court continued the CMC to December 14, 2023 and set an order to show cause (OSC) re: dismissal (settlement) for the same date.

On December 14, 2023, at the CMC/OSC hearing, counsel informed the Court that all parties but for Moris Sakhai had signed the settlement agreement and that Progressive would file a motion to dismiss within one week. Plaintiff’s counsel further informed the Court that Progressive intended to submit the disputed funds with the Court. The Court took the CMC off calendar, continued the OSC re: dismissal (settlement) to April 10, 2024, and set an OSC re: amount at issue in cross-complaint being below the minimum of unlimited civil jurisdiction for the same date.

D. Motion Before the Court

On January 8, 2024, Progressive filed a motion for an order discharging it from liability and for related orders.

Progressive’s motion was set for hearing on March 14, 2024, and was served by mail and email on Kingston Law, counsel for Kingston Law, and Moris Sakhai. The motion remains unopposed as of the date of this hearing.

Attached to Progressive’s motion is evidence showing its December 29, 2023, deposit of the contested amount of $4,713.17 with the Court in relation to this action.

Of note, the declaration of counsel attached to Progressive’s motion shows that even though the parties agreed on September 6, 2023, to settle how the disputed $4,713.17 would be distributed, as of January 3, 2024, Moris Sakhai had still not signed the circulated written settlement agreement, representing that he will not sign the agreement until all other disputes between him and Kingston Law are resolved. (Silva Van Vo Decl. at ¶ 16.)

Progressive’s motion is now before the Court.

II. Motion for Discharge and Dismissal of Disinterested Stakeholder in Interpleader

A. Legal Standard

Interpleader is a procedure whereby a person holding money or personal property to which conflicting claims are being made by others, can join the adverse claimants and force them to litigate their claims among themselves. (Hancock Oil Co. v. Hopkins (1944) 24 Cal.2d 497, 508; City of Morgan Hill v. Brown (1999) 71 Cal.App.4th 1114, 1122.)

Once the stakeholder’s right to interplead is established, and he or she deposits the money or personal property in court, he or she may be discharged from liability to any of the claimants. This enables the stakeholder to avoid multiplicity of actions, and the risk of inconsistent results if each of the claimants were to sue him or her separately. (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 874; City of Morgan Hill, supra, 71 Cal.App.4th at 1122.)

“An interpleader action is traditionally viewed as two suits: one between the stakeholder and the claimants to determine the stakeholder’s right to interplead, and the other among the claimants to determine who shall receive the funds interpleaded …. As against the stakeholder, claimants may raise only matters which go to whether the suit is properly one for interpleader; i.e., whether the elements of an interpleader action are present.” (State Farm Fire & Cas. Co. v. Pietak (2001) 90 Cal.App.4th 600, 612.)

If the defendant stakeholder claims no interest in the funds or property held, he or she need not file an interpleader cross complaint. He or she may simply apply to the court for permission to deposit the money or property with the court clerk, and for an order discharging him or her from further liability to the adverse claimants. Such order will also substitute the adverse claimants as parties to the action; or, if only money is involved, simply dismiss the stakeholder. (Code Civ. Proc., §§ 386, subd. (a), 386.5.) The motion must be supported by an affidavit by the stakeholder establishing the ground for interpleader. (Code Civ. Proc., §§ 386, subd. (a), 386.5.) Notice of the motion must be served on each of the adverse claimants to the funds or property. (Code Civ. Proc., §§ 386, subd. (a), 386.5.)

The stakeholder may seek reimbursement for his or her costs and reasonable attorneys’ fees incurred. (UAPColumbus JV 326132 v. Nesbitt (1991) 234 Cal.App.3d 1028, 1036.) The court may order payment thereof out of the funds deposited by the stakeholder. (Code Civ. Proc., § 386.6.)

B. Motion for Discharge and Dismissal: GRANTED.

Here, the Court first determines that Progressive has a right to interpleader because it is a “firm, corporation, association or other entity against whom double or multiple claims are made, or may be made [relating to Moris Sakhai’s settlement], by [Moris Sakhai and Kingston Law,] such that they may give rise to double or multiple liability.” (Code Civ. Proc., § 386, subd. (b); Mot., Vo Decl., ¶¶ 2-22, Exs. B [Jun. 21, 2023, order to deposit], C [receipt of Dec. 29, 2023 deposit].)

Second, the Court determines that sufficient evidence exist to grant this motion, as follows:

(1) Progressive states that it is a stakeholder for the recovery of a specific amount of money withheld pursuant to a fee agreement dispute between its insured, Moris Sakhai, and Kingston Law (Mot., Vo Decl., ¶¶ 2-11);

(2) Progressive explains that Moris Sakhai and Kingston Law dispute the same monies, i.e., the $4,713.47 deposited with the Court (Mot., Vo Decl., ¶¶ 6-7, 16-19, Ex. C);

(3) Progressive explains that it is a mere stakeholder and has no interest in the money (Mot., Vo Decl., ¶¶ 20-21);

(4) Progressive explains how Moris Sakhai’s and Kingston Law’s claims conflict (Mot., Vo Decl., ¶¶ 2-11);

(5) Progressive shows that it has deposited the disputed monies with the court clerk (Mot., Vo Decl., ¶ 18, Ex. C); and

(6) Progressive requests that it be discharged from all liability to the claimants and be dismissed from the suit.

(See Code Civ. Proc., §§ 386.5, 386.6, subd. (a).)

Third, the Court notes that “Progressive does not seek reimbursement or recovery of costs or for attorneys’ fees in connection with this action.” (Mot., Vo Decl., ¶ 22.)

Based on these determinations and one observation, the Court GRANTS Progressive’s unopposed motion.

III. Conclusion

Plaintiff in Intervention Progressive Select Insurance Company’s Motion for Order Discharging Plaintiff Progressive Select Insurance Company from Liability and for Related Orders is GRANTED.

The Court concurrently signs the proposed order filed by Plaintiff in Intervention Progressive Select Insurance Company.