Judge: Katherine Chilton, Case: 22STLC04451, Date: 2023-04-27 Tentative Ruling
Case Number: 22STLC04451 Hearing Date: April 27, 2023 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 $2,000.00 is
GRANTED. The remaining interpleader
funds of $13,000.00 are to be deposited with the court within ten (10) days of notice
of this order.
Trial
remains scheduled for January 3, 2024 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
as of April 24, 2023 [ ] Late [X] None
REPLY: None as
of April 24, 2023 [ ] Late [X] None
ANALYSIS:
I.
Background
Plaintiff Old Republic Surety
Company (“Plaintiff”) filed a verified Complaint in interpleader against
Defendants California Pool Men, Inc. (“CPM”), Ryan Junsay (“Ryan”), Wendy
Delgado (“Wendy”), Verbhert Malilim (“Verbhert”), and Princess Malilm
(“Princess”) (collectively “Defendants”). None of the Defendants have answered
the Complaint.
On September 15, 2022, Verbhert and
Princess filed a Cross-Complaint.
On January 27, 2023, default was entered
against CPM as to the Complaint.
Plaintiff filed the instant
Motion to Deposit by Stakeholder, for Discharge of Stakeholder, and request for
Attorney’s Fees (the “Motion”) on January 27, 2023. 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 an 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. (UAPColumbus
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.)
Under Wells Fargo Bank v. Zinnel (2004) 125 Cal. App. 4th 393, however, the
stakeholder is required to interplead the funds into the Court prior to
obtaining an order regarding fees.
III.
Discussion
The subject of this action is a
$15,000.00 Contractor’s State License Bond issued to CPM as the principal. (Sosa Decl., ¶ 2.) In its verified Complaint, Plaintiff alleges
that CPM committed some act that gives rise to liability on the subject bond,
that CPM has denied liability, and that CPM 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. (Notice of
Mot., pp. 2-3, Sosa Decl., ¶ 15.)
All identified claimants have
been served, and none of them answered the Complaint. In addition, default has been entered against
CPM. Plaintiff seeks permission to
deposit the bond funds of $15,000.00 less attorney’s fees and costs of
$2,000.00 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 17.4 hours
of attorney time totaling $2,610.00 between May 25, 2022 and September 16, 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.) Costs billed total $637.25 and include
service of process fees and filing fees.
(Id.) Although Plaintiff
was billed a total of $3,247.25, it seeks only $2,000.00 at this time,
reserving its right to seek attorney’s fees for all costs incurred from
CPM. (Id.) The Court finds the hours billed and amount
sought to be reasonable but because Plaintiff did not deposit the funds with
the Court, the Court DENIES Plaintiff’s request without prejudice. Moreover, while Plaintiff has served Defendants
Wendy, Ryan, Verbhert and Princess, Plaintiff has not taken their defaults for
failure to answer.
IV.
Conclusion & Order
For the foregoing reasons,
Plaintiff Old Republic Surety Company’s Motion for discharge is DENIED without
prejudice.
Trial remains scheduled for January 3, 2024 at 8:30 a.m. in
Department 25.
Moving party is ordered to give
notice.