Judge Katherine Chilton, Case 22STLC03567 2023-02-28 Tentative Ruling

Judge: Katherine Chilton, Case: 22STLC03567, Date: 2023-02-28 Tentative Ruling

Case Number: 22STLC03567 Hearing Date: February 28, 2023 Dept: 25

PROCEEDINGS: MOTION TO DEPOSIT AND DISCHARGE STAKEHOLDER

MOVING PARTY: Plaintiff Old Republic Surety Company

RESP. PARTY: None

MOTION TO DEPOSIT AND DISCHARGE STAKEHOLDER

(CCP §§ 386, 386.5)

TENTATIVE RULING:

Plaintiff Old Republic’s Motion to Deposit and Discharge Stakeholder and Request for Attorney’s Fees and Costs is CONTINUED to APRIL 18, 2023 at 10:30 A.M. in Department 25 at the SPRING STREET COURTHOUSE. At least 16 court days before the next scheduled hearing, Plaintiff must serve Defendant Montana Marketing and Sales, Inc. with the Summons and Complaint. Failure to do so may result in the Motion being placed off calendar or denied.

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 February 26, 2023. [ ] Late [X] None

REPLY: None filed as of February 26, 2023. [ ] Late [X] None

ANALYSIS:

I. Background

On May 26, 2022, Plaintiff Old Republic Surety Company (“Plaintiff” or “Old Republic”) filed an action in interpleader against Defendants Montana Marketing and Sales, Inc., dba AAA Green Builders (“Montana Marketing”), Alicia Whitman (“Alicia”), Jorge Ocedgueda (“Jorge”), Marlene Ocedgueda (“Marlene”), Damien Oregel (“Damien”), Sharina Oregel (“Sharina”), Christopher Taublee (“Christopher”), and Gricelda Escobar (“Gricelda”), (collectively “Defendants”).

Since filing the initial Complaint, Plaintiff has amended the Complaint to add the following Defendants Steve Walleman (“Steve”) and Tereza Walleman (“Tereza”) (on June 10, 2022); April Davison (“April”), Barbara Hurr (“Barbara”), and Jack Hurr (“Jack”) (on June 21, 2022); and Rosa Saenz Kollar (“Rosa”) and Bertha Saenz (“Bertha”) (on July 27, 2022).

Plaintiff has also requested dismissal of several Defendants. Pursuant to Plaintiff’s requests, the Court has dismissed the following Defendants: Alicia Whitman and Christopher Taulbee (on June 23, 2022); April Davison (on July 25, 2022); and Barbara Hurr and Jack Hurr (on August 10, 2022). (6-17-22 Request for Dismissal; 7-21-22 Request for Dismissal; 8-2-22 Request for Dismissal.)

On July 29, 2022, Defendants Damien and Sharina Oregel, in propria persona, filed a General Denial.

On September 30, 2022, based on Plaintiff’s request, Defendants Damien and Sharina were dismissed without prejudice. (9-30-22 Request for Dismissal.)

On October 3, 2022, the Court denied Defendant Montana’s Motion to Compel Arbitration and Stay Proceedings, filed on July 5, 2022. (10-3-22 Minute Order.)

On October 12, 2022, based on Plaintiff’s request, Defendants Jorge and Marlene were dismissed without prejudice. (10-11-22 Request for Dismissal.)

Furthermore, on October 11, 2022, based on Plaintiff’s request, the Court entered default against the following Defendants: Steve, Tereza, Rosa, Gricelda, and Bertha. (10-11-22 Requests for Entry of Default.)

On October 31, 2022, Plaintiff filed the instant Motion to Deposit and Discharge Stakeholder and Request for Attorney’s Fees (“Motion”).

On December 2, 2022, the Court found that Los Angeles Superior Court Cases No. 22STCV23991 and No. 22STLC03567 are not related within the meaning of California Rules of Court, rule 3.300(a). (12-2-22 Minute Order.)

On January 12, 2023, the Court, on its own motion, continued the hearing on the instant Motion to February 28, 2023. (1-12-23 Minute Order.)

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. (See Code of Civ. Proc. § 386; Hancock Oil Co. v. Hopkins (1944) 24 Cal. 2d 497, 508; City of Morgan Hill v. Brown (1999) 71 Cal.App.4th 1114, 1122-23.)

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, 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(a), 386.5.) The motion must be supported by an affidavit by the stakeholder establishing the ground for interpleader. (Code Civ. Proc., § 386(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(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.)

Pursuant to § 386(f), the court may also “enter 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.” (Cal. Civ. Proc. § 386(f).)

The stakeholder may seek reimbursement for its costs and reasonable attorneys’ fees incurred. (Code Civ. Proc., § 386.6; 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.) Per Wells Fargo Bank v. Zinnel (2004), 125 Cal. App. 4^th 393, however, the stakeholder must deposit funds with the Court to be entitled to attorneys’ fees; the stakeholder cannot just withhold its fees pending a decision by the Court.

III. Discussion

A. Motion to Deposit and Discharge

The subject matter of the instant Motion is a $15,000 Contractor’s State License Bond issued to Defendant Montana Marketing and Sales, Inc., dba AAA Green Builders, as principal. (Pagan Decl. ¶ 2.)

Plaintiff Old Republic filed a Complaint in Interpleader naming the following claimants to the bond:

1. Montana Marketing and Sales, Inc. (Not served)

2. Alicia Whitman (Dismissed)

3. Jorge Ocegueda (Dismissed)

4. Marlene Ocegueda (Dismissed)

5. Damien Oregel (Dismissed)

6. Sharina Oregel (Dismissed)

7. Christopher Taulbee (Dismissed)

8. Gricelda Escobar (Defaulted)

9. Steve Walleman (Defaulted)

10. Tereza Walleman (Defaulted)

11. April Davison (Dismissed)

12. Jack Hurr (Dismissed)

13. Barbara Hurr (Dismissed)

14. Bertha Saenz (Defaulted)

15. Rosa Saenz Kollar (Defaulted)

(Ibid. at ¶¶ 3-4.)

Plaintiff contends that “it does not know and cannot determine the respective merits of the remaining claimants which are conflicting claims against the subject bond” and finds that the interpleader is a “safe, expedient, or economical remedy.” (Pagan Decl. ¶ 8.) Plaintiff states that it “has no interest in the proceeds of Bond No. WCL5923595 and is a mere stakeholder with respect thereto pursuant to CCP § 386.5.” (Ibid.) Old Republic requests permission from the Court to deposit the $15,000 bond with the Court, less attorney’s fees and costs, and be discharged from further liability to claimants in regard to this bond. (Mot. p. 2.) It also requests that the Court issue a restraining order against claimants and all other persons from instituting further legal action against Old Republic with respect to this bond, pursuant to Code of Civil Procedure § 386(f). (Ibid. at p. 3.)

The Court finds that Plaintiff’s Motion complies with all procedural requirements.

However, Plaintiff acknowledges that Defendant Montana Marketing has appeared in the case through its Motion to Compel Arbitration, which was denied on October 3, 2022, but has not been served with the Summons and Complaint. (Pagan Decl. ¶¶ 4a, 5.) The Court cannot grant Plaintiff’s Motion until all parties have been served with the Complaint and moving papers.

For these reasons, the Court continues the hearing on the Motion and orders Plaintiff to serve Defendant Montana Marketing with the Summons and Complaint.

B. Attorney’s Fees and Costs

The stakeholder may seek reimbursement for its costs and reasonable attorneys’ fees incurred. (Code Civ. Proc. § 386.6; 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.)

Plaintiff Old Republic requests $2,000.00 in attorney’s fees and costs related to the interpleader. (Pagan Decl. ¶ 6.) The costs are as follows:

1. $370 filing fee,

2. $0 in service fees as to Defendant Montana Marketing;

3. $0 in service fees as to Defendant Alicia Whitman;

4. $0 in service fees as to Defendant Jorge Ocegueda;

5. $0 in service fees as to Defendant Marlene Ocegueda;

6. $125 in service fees as to Defendant Damien Oregel;

7. $85 in service fees as to Defendant Sharina Oregel;

8. $0 in service fees as to Defendant Christopher Taulbee;

9. $70 in service fees as to Defendant Gricelda Escobar;

10. $55 in service fees as to Defendant Steve Walleman;

11. $55 in service fees as to Defendant Tereza Walleman;

12. $75 in service fees as to Defendant April Davison;

13. $70 in service fees as to Defendant Jack Hurr;

14. $70 in service fees as to Defendant Barbara Hurr;

15. $65 in service fees as to Defendant Bertha Saenz;

16. $75 in service fees as to Defendant Rosa Saenz Kollar;

17. $60 filing fee for the instant Motion.

(Ibid.) Plaintiff’s counsel has attached an itemized statement containing details of the billing of attorney’s fees and states than an additional $450.00 in attorney’s fees is requested for filing the instant Motion. (Ibid.; Ex. 1.)

Given that the Court CONTINUES the hearing on Plaintiff’s Motion, the Court will evaluate Plaintiff’s request for attorney’s fees and costs at the next scheduled hearing, and directs Plaintiff’s counsel attention to the Wells Fargo v. Zinnel case.

IV. Conclusion & Order

For the foregoing reasons,

Plaintiff Old Republic’s Motion to Deposit and Discharge Stakeholder and Request for Attorney’s Fees and Costs is CONTINUED to APRIL 18, 2023 at 10:30 a.m. in Department 25 at the SPRING STREET COURTHOUSE. At least 16 court days before the next scheduled hearing, Plaintiff must serve Defendant Montana Marketing and Sales, Inc. with the Summons and Complaint and deposit funds with the Court. Failure to do so may result in the Motion being placed off calendar or denied.

Moving party is ordered to give notice.