Judge Christopher K. Lui, Case Number: 23STCV25954, Date: 2024-03-06 Tentative Ruling

This is an interpleader action whereby Plaintiff to interplead funds in the amount of a $50,000 Motor Vehicle Dealer Bond.

Plaintiff moves for an order discharging it from liability as stakeholder, an order of deposit of the penal sum of $50,000 of the bond in dispute between the parties with the clerk, and ordering that Defendants, and each of them and their respective attorneys, be restrained from instituting or further prosecuting any other proceeding in any court in California for recovery against the bond against Plaintiff, and dismissing Plaintiff without prejudice.

Plaintiff’s motion for an order discharging it from liability as stakeholder, an order of deposit of the penal sum of $50,000 of the bond in dispute between the parties with the clerk, and ordering that Defendants, and each of them and their respective attorneys, be restrained from instituting or further prosecuting any other proceeding in any court in California for recovery against the bond against Plaintiff, and dismissing Plaintiff without prejudice is GRANTED.

(b) Any person, firm, corporation, association or other entity against whom double or multiple claims are made, or may be made, by two or more persons which are such that they may give rise to double or multiple liability, may bring an action against the claimants to compel them to interplead and litigate their several claims.

(c) Any amount which a plaintiff or cross-complainant admits to be payable may be deposited by him with the clerk of the court at the time of the filing of the complaint or cross-complaint in interpleader without first obtaining an order of the court therefor. Any interest on amounts deposited and any right to damages for detention of property so delivered, or its value, shall cease to accrue after the date of such deposit or delivery.

(f) 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.

When a person may be subject to conflicting claims for money or property, the person may bring an interpleader action to compel the claimants to litigate their claims among themselves. (Code Civ. Proc., § 386, subd. (b).) Once the person admits liability and deposits the money with the court, he or she is discharged from liability and freed from the obligation of participating in the litigation between the claimants. [Citations.] The purpose of interpleader is to prevent a multiplicity of suits and double vexation. [Citation.]” (City of Morgan Hill v. Brown (1999) 71 Cal.App.4th 1114, 1122 [84 Cal. Rptr. 2d 361], fn. omitted.) “In an interpleader action, the court initially determines the right of the plaintiff to interplead the funds; if that right is sustained, an interlocutory decree is entered which requires the defendants to interplead and litigate their claims to the funds. Upon an admission of liability and deposit of monies with the court, the plaintiff may then be discharged from liability and dismissed from the interpleader action. [Citations.] The effect of such an order is to preserve the fund, discharge the stakeholder from further liability, and to keep the fund in the court's custody until the rights of potential claimants of the monies can be adjudicated. [Citations.] Thus, the interpleader proceeding is traditionally viewed as two lawsuits in one. The first dispute is between the stakeholder and the claimants to determine the right to interplead the funds. The second dispute to be resolved is who is to receive the interpleaded funds. [Citations.]” (Dial 800 v. Fesbinder (2004) 118 Cal.App.4th 32, 42–43 [12 Cal. Rptr. 3d 711]; see also 4 Witkin, Cal. Procedure (4th ed. 1997) Pleading, §§ 216–237, pp. 280–298; Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2006) ¶¶ 2:470 to 2:497, pp. 78–85.)

(Principal Life Ins. Co. v. Peterson (2007) 156 Cal.App.4th 676, 682 [bold emphasis added].)

Here, Plaintiff admits liability in the sum of the $50,000 dealer’s bond as surety, pursuant to Vehicle Code, §§ 11710(b) and 11711(a). On or about August 31, 2016, ACIC as surety and SHIFT OPERATIONS LLC, as principal, made, executed, and delivered a certain Motor Vehicle Dealer Bond, Bond No. 100323440 pursuant to Sections 11710 and 11711 of the California Vehicle Code in the sum of $50,000.00. (Complaint, ¶ 5.) Thereafter, riders were issued on the bond on or about September 14, 2016, and June 24, 2019. (Id.) Plaintiff is informed and believes the Bond was in effect at the time of the occurrence of the event described herein. (Complaint, ¶ 6.) (See also Declaration of Frank M. Lanak.)

[1] Although Plaintiff cites Civ. Proc. Code, § 386.5 as one basis for this motion, that section applies to a defendant not a plaintiff:

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.