Judge Katherine Chilton, Case 22STLC01215 2022-10-06 Tentative Ruling

Judge: Katherine Chilton, Case: 22STLC01215, Date: 2022-10-06 Tentative Ruling

Case Number: 22STLC01215 Hearing Date: October 6, 2022 Dept: 25

PROCEEDINGS: MOTION TO DEPOSIT BY STAKEHOLDER; FOR DISCHARGE OF STAKEHOLDER; REQUEST FOR ATTORNEY’S FEES

MOVING PARTY: Plaintiff Old Republic Surety Company

RESP. PARTY: None

MOTION TO DEPOSIT BY STAKEHOLDER, TO DISCHARGE LIABILITY, AND REQUEST FOR ATTORNEY’S FEES

(CCP §§ 386, 386.5)

TENTATIVE RULING:

Plaintiff Old Republic Surety Company’s Motion for discharge is GRANTED. Plaintiff’s request for attorney’s fees and costs of $1,200.00 is GRANTED. Remaining interpleader funds of $2,765.00 to be deposited with the court within thirty (30) days of notice of this order.

Trial remains scheduled for August 22, 2023 at 8:30 a.m. in Department 25.

SERVICE:

[X] Proof of Service Timely Filed (CRC, rule 3.1300) OK

[X] Correct Address (CCP §§ 1013, 1013a) OK

[X] 16/21 Court Days Lapsed (CCP §§ 12c, 1005(b)) OK

OPPOSITION: None filed as of March 28, 2022 [ ] Late [X] None

REPLY: None filed as of March 28, 2022 [ ] Late [X] None

ANALYSIS:

I. Background

On February 22, 2022, Plaintiff Old Republic Surety Company (“Plaintiff”) filed a verified Complaint in interpleader against Defendants Anchor Plumbing Heating & HVAC, Inc. (“Anchor Plumbing”), Sunbelt Rentals, Inc. (“Sunbelt”), Associated Builders and Contractors of Southern California (“Associated Builders”), and Does 1-75, inclusive. On July 12, 2022, Plaintiff amended the Complaint to add Defendant Hajoca Corporation (“Hajoca”) in place of Doe 6. As of today, defaults have been entered as to Defendants Sunbelt, Anchor Plumbing and Hajoca for failure to file an answer and Defendant Associated Builders has been dismissed.

On July 14, 2022, Plaintiff filed the instant Motion to Deposit by Stakeholder, for Discharge of Stakeholder, and Request for Attorney’s Fees (the “Motion”). No opposition was filed.

II. 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. (For example, an escrow-holder who receives conflicting demands from the parties to the escrow regarding the funds or documents he or she holds.) (Hancock Oil Co. v. Hopkins (1944) 24 C2d 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 a 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 v. Brown, 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).) The supporting affidavit must also state that the moving party 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…” (Code Civ. Proc., § 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.) “Where a deposit has been made pursuant to Section 386, the court shall, upon the application of any party to the action, order such deposit to be invested in an insured interest-bearing account.” (Code Civ. Proc., § 386.1.)

The stakeholder may seek reimbursement for its costs and reasonable attorneys’ fees incurred. (UAP-Columbus 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.)

III. Discussion

The subject of this action is a $7,500.00 Contractor’s State License Bond issued to Defendant Anchor Plumbing as the principal. (Mot., Sosa Decl., ¶ 2.) In its verified Complaint, Plaintiff alleges that Defendant Anchor Plumbing committed some act that gives rise to liability on the subject bond, that Defendant Anchor Plumbing has denied liability, and that Defendant Anchor Plumbing has not authorized Plaintiff to pay its bond to the claimants. (Compl., ¶ 7.) Plaintiff represents that it has no interest in the bond proceeds, that it has received conflicting demands upon the subject bond funds, and that Plaintiff cannot determine the liability of the conflicting demands. (Id. at ¶¶ 13, 15; Notice of Mot., p. 3, Sosa Decl., ¶ 4.)

All identified claimants have been served and have either been dismissed or defaulted. Plaintiff received an earlier claim from HD Equipment, and Plaintiff entered into a good faith settlement with that claimant for payment of the sum of $3,535.00, leaving $3,965.00 remaining for other claimants. (Sosa Decl. ¶ 2). Plaintiff seeks permission to deposit the bond funds of $3,965.00 less attorney’s fees and costs of $1,200.00 incurred in this filing and maintaining this action. (Notice of Mot., ¶ 5, Sosa Decl., ¶¶ 6, 10, Exh. 1.) Plaintiff attaches invoices from its counsel at Hausman & Sosa, LLP demonstrating it was billed $1,957.75 for fees and costs between October 25, 2021 and June 30, 2022. (Id.) Services billed for include reviewing claims documentation submitted against the bond, preparing the verified Complaint, serving the parties with the action, communicating with the parties, and preparing the instant Motion. (Id.) Although Plaintiff was billed a total of $1,957.75, it seeks only $1,200.00 at this time, reserving its right to seek attorney’s fees for all costs incurred from Defendant Anchor Plumbing. (Id.) The Court finds the hours billed and amount sought to be reasonable and thus its request is GRANTED. Plaintiff may retain $1,200.00 and upon deposit of the remaining $2,765.00 bond funds, Plaintiff will be discharged from liability in this action.

Finally, the Court enters a restraining order to prevent the prosecution of other actions affecting the rights and obligations of the parties in this interpleader action. (Code Civ. Proc., §§ 386, 386.5.)

IV. Conclusion & Order

For the foregoing reasons, Plaintiff Old Republic Surety Company’s Motion for discharge is GRANTED. Plaintiff’s request for attorney’s fees and costs of $1,200.00 is also GRANTED. Remaining interpleader funds of $2,765.00 are to be deposited with the court within thirty (30) days of notice of this order.

Trial remains scheduled for August 22, 2023 at 8:30 a.m. in Department 25 although currently no defendants will be able to participate.

Moving party is ordered to give notice.