Judge: Douglas W. Stern, Case: 22STCV11454, Date: 2023-08-07 Tentative Ruling

Case Number: 22STCV11454    Hearing Date: December 14, 2023    Dept: 68

Matthew S. Garza vs. Certain Underwriters at Lloyd’s of London Subscribing to the Subject Policy, et al., 22STCV11454

Motion to Interplead Funds with the Court

­­­­­­­Background

            Defendant International Specialty Insurance Services, Inc. (ISI) is seeking to interplead funds with the Court. ISI was Defendant Certain Underwriters’ agent and Coverholder in the placement of Matthew Garza’s policy. After Certain Underwriters rescinded Garza’s policy, ISI attempted to return certain premium funds to either Garza or Certain Underwriters, but neither has claimed the money or taken possession of it. Each asserts it belongs to the other. Certain Underwriters argues it belongs to Garza because it rescinded the policy, but because Garza is claiming that the policy should not have been rescinded, he argues that the funds belong to Certain Underwriters.

ISI has no interest in or claim to the funds, which is why it seeks to interplead the funds with the Court. ISI currently holds $133,624.68 of the premium funds, which consists of Certain Underwriters’ net premium, the Howard Global commission, plus accrued interest. ISI has incurred fees and costs in attempting to return the funds and will seek to recover payment of such fees and costs from the deposited amount, once it is determined to whom the funds belong.

            No opposition has been filed to the motion.

Analysis

            CCP § 386 provides for the statutory right of interpleader, allowing a party that holds disputed funds to deposit them with the Court when that party has no claim to the funds. (See also Fidelity Sav. & Loan Ass’n v. Rodgers (1919) 180 Cal. 683.)

            Unusually, the funds in this case are not technically disputed in the traditional sense, as neither Garza nor Certain Underwriters’ has made a claim to the premium funds. Instead, they are both arguing that the funds belong to the other party. It is likely, over the course of the litigation, that it will become clear to whom these premium funds belong. Because the true owner of the funds is unknown, interpleading the funds is still appropriate.

The Court grants ISI’s motion to interplead funds in the amount of $133,624.68.

Order

            Defendant ISI is ordered to deposit $133,624.68 with the Court, to be held until further order of the Court.