Judge: Armen Tamzarian, Case: 22STLC05413, Date: 2024-01-22 Tentative Ruling

Case Number: 22STLC05413    Hearing Date: March 11, 2024    Dept: 52

Cross-Complainant/Cross-Defendant Arch Insurance Company’s Motion for an Order to Deposit Bond Funds and Restrain Prosecution of Actions

Cross-complainant/cross-defendant Arch Insurance Company (Arch) moves for an order permitting it to deposit $25,000 in bond funds with the court (minus $10,651.72 in costs and attorney fees), dismissing it from this action, and restraining actions against it.

Deposit of Funds

Code of Civil Procedure section 386(b) provides that when someone “against whom double or multiple claims are made,” that party may “file a verified cross-complaint in interpleader, admitting that it has no interest in the money or property claimed …  and alleging that all or such portion is demanded by parties to such action, and apply to the court upon notice to such parties for an order to deliver such money or property or such portion thereof to such person as the court shall direct.” 

Arch shows grounds for an order permitting it to deposit $25,000 with the court.  Its verified cross-complaint for interpleader admits it has no interest in the money except any remaining funds or attorney fees and costs under Code of Civil Procedure section 386.6.  (Cross-Comp., ¶ 19.)  Arch establishes that numerous parties have made claims to its bond.  (Quinones Decl., ¶¶ 5-15.)    

Dismissal

Code of Civil Procedure section 386.5 provides, “Where the only relief sought against one of the defendants is the payment of a stated amount of money alleged to be wrongfully withheld, such defendant may, upon affidavit that he is a mere stakeholder with no interest in the amount or any portion thereof and that conflicting demands have been made upon him for the amount by parties to the action, upon notice to such parties, apply to the court for an order discharging him from liability and dismissing him from the action on his depositing with the clerk of the court the amount in dispute and the court may, in its discretion, make such order.”

Arch shows good cause for such an order.  Lainey Quinones, a senior claims examiner for Arch (Quinones Decl., ¶ 1), states, “Arch is unable to determine which claimant had priority to the Bond funds.  Arch is a mere stakeholder with no interest in the amount or any portion of the Bond.  Having no other alternative, Arch filed the subject Cross-Complaint for Interpleader solely based on its role as surety for Defendant Entron.”  (Id., ¶ 16.)  Upon depositing the funds, Arch will be discharged from liability and dismissed from this action.

Restraining Actions

Arch moves to restrain the prosecution of the cross-complaint filed by Tywon White in this action and the cross-complaint against Arch by Deocarlo Guirnela and Dawn Guirnela in a separate action, Consolidated Electrical Distributors, Inc. v. Deocarlo Guirnela, et al., case No. 22STLC05402.

            Code of Civil Procedure section 386(f) provides, “After any such complaint or cross-complaint in interpleader has been filed, the court in which it is filed may enter its order restraining all parties to the action from instituting or further prosecuting any other proceeding in any court in this state affecting the rights and obligations as between the parties to the interpleader until further order of the court.” 

            Arch establishes grounds for an order restraining actions against it.  The parties to be restrained are parties to this action.  Tywon White is a cross-defendant and cross-complainant in this action.  Deocarlo Guirnela and Dawn Guirnela are cross-defendants to Arch’s cross-complaint.  Under section 386(f), this court has power to restrain them from further prosecuting “any other proceeding in any court in this state,” including their cross-complaint against Arch in case No. 22STLC05402.

Costs and Attorney Fees

            Arch requests an award of $10,621.72, including $935.72 in filing fees and $9,716 in attorney fees.  Code of Civil Procedure section 386.6(a) provides, “A party to an action who follows the procedure set forth in Section 386 or 386.5 may insert in his motion, petition, complaint, or cross complaint a request for allowance of his costs and reasonable attorney fees incurred in such action.  In ordering the discharge of such party, the court may, in its discretion, award such party his costs and reasonable attorney fees from the amount in dispute which has been deposited with the court.”

            Arch’s cross-complaint (¶¶ 19 & prayer, ¶ 5) and this motion request costs and reasonable attorney fees.  Arch presents sufficient evidence of these expenses.  (Martinez-Genzon Decl., ¶¶ 10-11, Ex. 2.)  The court exercises its discretion to award Arch $10,621.72 in expenses.

Disposition

            Cross-complainant/cross-defendant Arch Insurance Company’s motion for an order depositing bond funds and to restrain prosecution of actions is granted. 

The court hereby awards Arch Insurance Company $10,651.72 in attorney fees and costs, to be deducted from the $25,000 penal sum of its bond. 

Arch Insurance Company is ordered to deposit the balance of $14,348.28 with the court within 20 days.  Upon deposit of the funds, the bond shall be exonerated and Arch Insurance Company shall be discharged from all liability under the bond and shall be dismissed from this action with prejudice.  Upon deposit of the bond funds, the Court will deposit the sum of $14,348.28 in an interest-bearing account until a final determination is made as to how the bond funds will be distributed.

The court hereby restrains the parties to this action from prosecution of any further legal action against the bond.  The court specifically restrains (1) cross-complainant Tywon White from prosecuting his cross-complaint against Arch Insurance Company, and (2) cross-defendants Deocarlo Guirnela and Dawn Guirnela from prosecuting their cross-complaint against Arch Insurance Company in Consolidated Electrical Distributors, Inc. v. Deocarlo Guirnela, et al., case No. 22STLC05402.