Judge: Kerry Bensinger, Case: BC614836, Date: 2023-09-19 Tentative Ruling

Case Number: BC614836    Hearing Date: September 19, 2023    Dept: 27

Tentative Ruling

Judge Kerry Bensinger, Department 27

HEARING DATE:     September 19, 2023                           TRIAL DATE:  Vacated

CASE:                         Peter J. Garcia v. Malli Patibandla-Rao, et al.

CASE NO.:                 BC614836

MOTION FOR LEAVE FOR INTERPLEADER

TO DEPOSIT FUNDS WITH THE COURT

MOVING PARTY:               Defendants E.M. Pizza, Inc., Malli Patibandla-Rao, Francisco Montes, Andrea Jimenez, and Danny Egoavil

RESPONDING PARTY(S): Plaintiffs Peter J. Garcia and John Garcia     

I.          BACKGROUND

            On March 30, 2016, Plaintiffs, Peter J. Garcia (“Peter”) and John Garcia (“John”), filed this action for assault, battery, conspiracy, intentional infliction of emotional distress, and negligent training and supervision against Defendants, Malli Patibandla-Rao (“Patibandla-Rao”), E.M. Pizza, Inc. (“E.M. Pizza”), Francisco Montes (“Montes”), Danny Egoavil (“Egoavil”), Raymond Hill (“Hill”), Jose Cruz (“Cruz”), Andrea Jimenez (“Jimenez”), and Stephanie Leon (“Leon”).  According to the Complaint, Plaintiffs were attacked by Montes, Egoavil, and Hill, on April 3, 2014 when Peter tried to purchase a pizza at a restaurant owned by E.M. Pizza.  Montes, Egoavil, and Hill conspired to support Montes’s assaultive behavior and that Jimenez, Leon, and Cruz conspired with Montes, Egoavil, and Hill by failing to take any action to stop the assault and battery and were dishonest with the police about the incident.  E.M. Pizza negligently trained and supervised its employees.  

On December 28, 2018, the Honorable Laura A. Seigle granted Plaintiffs’ counsel, E. Samuel Johnson III’s motion to be relieved and signed the proposed order on January 4, 2019. On January 9, 2019, Mr. Johnson submitted proof of service showing that the signed order was served on Plaintiffs on January 7, 2019.

On May 2, 2019, Plaintiffs filed a substitution of attorney indicating they were represented by Negin Yamini.

On October 31, 2019, the Honorable Margaret L. Oldendorf ordered Jimenez, Cruz, Patibandla-Rao, Hill, and Leon dismissed from the action with prejudice, pursuant to an oral request made by Plaintiffs’ counsel.

On November 5, 2019, the parties reached a settlement during trial.  Defense counsel submits a transcript of the court proceedings wherein Judge Oldendorf discusses the terms of the settlement agreement at length with counsel for the parties and Plaintiffs verbally assent to the terms of the settlement agreement.  Judge Oldendorf also noted that Medi-Cal had asserted a lien for Peter’s emergency visit “in the neighborhood of 3 or $400.”  No other liens were mentioned or identified.  The parties did not ask the court to retain jurisdiction to enforce the settlement agreement.  The November 5, 2019 minute order reflects that defense counsel was to prepare dismissal forms and provide them to Plaintiffs’ counsel by November 8, 2019.  The settlement agreement was reduced to a writing and signed by Plaintiffs on November 8, 2019.  The settlement agreement does not explicitly state that the court to retains jurisdiction to enforce the settlement agreement. Nor did the parties file a stipulation requesting that the court retain jurisdiction to enforce the settlement agreement.

On April 15, 2020, E.M. Pizza, Montes, and Egoavil (“Moving Parties”) filed a cross-complaint in interpleader naming Plaintiffs, Mr. Johnson, and Ms. Yamini as cross-defendants.  Moving Parties allege that the terms of the settlement provide Peter with $75,000 and John with $25,000; Plaintiffs are to satisfy all liens out of the proceeds of this settlement.  (Moving Parties’ Cross-Complaint, ¶ 13.)  Moving Parties also allege that separate written releases were signed on November 8, 2019, but that checks for the settlement amount were being held by Moving Parties’ counsel pending resolution of Mr. Johnson’s lien.  On April 24, 2020, upon learning of the filing of the complaint in interpleader, the trial court (Department P in the Pasadena Courthouse) returned the entire case to this Court.

On June 19, 2020, Plaintiffs filed their own cross-complaint in interpleader against several medical providers, including Healthpointe Medical Group, Inc., Alliance for Wellness, Inc., and Adam Harcourt Chiropractic P.C. (collectively, “Medical Providers”).  Plaintiffs allege that Medical Providers should have submitted their medical expenses to the Department of Health Care Services (“DHCS”) and that the medical expenses were grossly inflated and should be reduced.  On January 31, 2022, the Court granted Ms. Yamini’s motion to be relieved as counsel of record for Plaintiffs and a proof of service of the signed order on Plaintiffs was filed on February 17, 2022.

On September 9, 2022, Moving Parties filed this motion for leave to deposit the settlement funds with the Court.  Plaintiffs oppose.

On October 20, 2022, the Court heard argument on this motion.  In the minute order, the Court directed the parties to file supplemental briefs to address argument and issues raised at the hearing and continued the matter.

On December 8, 2022, Moving Parties filed supplemental briefing.  On February 24, 2023, following argument on this motion, the Court continued the hearing and ordered Mr. Johnson to file their settlement agreement with Ms. Yamini.

On March 16, 2023, Mr. Johnson filed the settlement agreement and stipulated email communications with the Law Offices of Negin Yamini detailing how to split attorney’s fees. 

On April 3, 2023, the Court directed Ms. Yamini to file their accounting of all liens and fees, as well as the retainer agreement between Ms. Yamini and Plaintiffs.  On April 27, 2023, Ms. Yamini filed an accounting of all liens and fees owed on this matter, as well as the retainer agreement between her and Plaintiffs.  Ms. Yamini identified additional liens not previously disclosed to the Court.

            This motion was heard on May 5, 2023.  The Court issued a tentative ruling indicating that Moving Parties failed to show a valid threat of double vexation.  The Court also indicated that it would hear oral argument regarding the additional medical liens identified by Ms. Yamini and the effect of Paragraph 2 of the settlement agreement. 

            On June 20, 2023, Ms. Yamini filed a Memorandum Re: Liens. 

            On June 30, 2023, Moving Parties filed additional briefing in support of this motion.

            On July 17, 2023, the Court issued a tentative ruling indicating that the Court did not have jurisdiction to enforce the settlement agreement.  At the hearing, counsel for Moving Parties argued the Court still had jurisdiction to enforce the settlement agreement because the case has not been dismissed.  Counsel further argued the settlement agreement provides that the court retains jurisdiction to enforce the settlement agreement.  Counsel stated that he would provide the Court with authority for the proposition that such language in a signed settlement agreement is sufficient for the Court to retain jurisdiction.  The Court continued the motion based on oral argument.

            On August 16, 2023, Moving Parties filed a supplemental brief addressing the issues raised in the July 17, 2023 hearing.

            The Court rules as follows.

II.        LEGAL STANDARD

Code of Civil Procedure section 386, the interpleader statute, provides two separate bases for bringing an interpleader action.  Subdivision (a) of the statute pertains to a complaint in interpleader brought by a defendant “against whom an action is pending upon a contract, or for specific personal property ….”  (Code Civ. Proc., § 386, subd. (a).)  Subdivision (b) pertains to a complaint in interpleader brought by “[a]ny 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 ….”  (Code Civ. Proc., § 386, subd. (b).)

A complaint in interpleader allows an obligor to require parties with conflicting claims to litigate those claims against each other, instead of against the obligor. (Code Civ. Proc., § 386, subd. (b).) The purpose of interpleader is to prevent a multiplicity of suits and double vexation. (City of Morgan Hill v. Brown (1999) 71 Cal.App.4th 1114, 1122.) However, an interpleader action may not be maintained upon the mere suspicion of double vexation. (Westamerica Bank v. City of Berkeley (2011) 201 Cal.App.4th 598, 607-608.) The plaintiff must allege facts showing a reasonable probability of double vexation, or a valid threat of double vexation. (Ibid.) “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.”  (Code Civ. Proc., § 386.5.) 

IV.       DISCUSSION

“The true test of suitability for interpleader is the stakeholder’s disavowal of interest in the property sought to be interpleaded, coupled with the perceived ability of the court to resolve the entire controversy as to entitlement to that property without need for the stakeholder to be a party to the suit.”  (Pacific Loan Mgmt. Corp. v. Superior Court (1987) 196 Cal.App.3d 1485, 1489-1490.) 

As a threshold issue, the Court must determine whether it has jurisdiction to enforce the settlement agreement and the enforceability of the settlement agreement itself. 

The Court Has Jurisdiction to Enforce the Settlement Agreement

Relying on Mesa RHF Partners, L.P. v. City of Los Angeles (2019) 33 Cal.App.5th 913, 918 (Mesa RHF Partners), the Court previously issued a tentative ruling indicating it did not have jurisdiction to enforce the settlement agreement.  In their supplemental briefing, Moving Parties argue that Mesa RHF Partners is distinguishable because unlike the procedural posture in that case, the action here has not yet been dismissed.  As such, Moving Parties argue the Court has jurisdiction to enforce the settlement agreement.  After review of the applicable authority, the Court agrees.  The complaint was not been dismissed.  Based upon the plain language of section 664.6, this Court has jurisdiction to enforce the settlement agreement.  “If parties to pending litigation stipulate, in a writing signed by the parties outside of the presence of the court or orally before the court, for settlement of the case, or part thereof, the court upon motion, may enter judgment pursuant to the terms of the settlement.”  (CCP section 664.6.)  

Enforceability of the Settlement Agreement

                “Section 664.6 permits the trial court judge to enter judgment on a settlement agreement without the need for a new lawsuit. (Citation.) It is for the trial court to determine in the first instance whether the parties have entered into an enforceable settlement. (Citation.) In making that determination, “the trial court acts as the trier of fact, determining whether the parties entered into a valid and binding settlement. [Citation.] Trial judges may consider oral testimony or may determine the motion upon declarations alone. [Citation.]” (Osumi v. Sutton (2007) 151 Cal.App.4th 1355, 1360.)

                In this Court’s October 20, 2022 minute order, the Court expressed doubt that the Settlement Agreements were enforceable.  Upon review of the Moving Parties’ supplemental briefing, filed April 21, April 27, June 20, June 30, and August 16, 2023, the Court finds the settlement agreement is enforceable.  Moving Parties submit the settlement agreements between Plaintiffs John and Peter Garcia and Defendants (Exhibits C and D to 8/16/23 Decla of Raymond Wilson (Wilson Decla); the transcript of the settlement agreement placed on the record before the Court on November 5, 2019 (Exhibit B to Wilson Decla.); Copies of the lien agreements between Peter Garcia and California Department of Health Services, Healthpointe Medical Group, Dr. Mitali Wasekar MD/Alliance for Wellness; Adam Harcourt Chiropratic P.C. (Exhibits F-I to Wilson Decla.); copy of the lien agreement between John Garcia and Adam Harcourt Chiropractic P.C. (Exhibit J to Wilson Decla.)

 Moving Parties establish that Plaintiffs agreed to the settlement agreement.  In the court transcript, counsel for the parties discussed the terms and conditions of the Settlement Agreements with Judge Oldendorf; Plaintiffs assented to those terms.  (Wilson Decl., Ex. B, pp. 10:2-5, 11:21-13:7.)  

Ms. Yamini’s filing on April 27, 2023 provides an accounting of all asserted liens.  The accounting identifies six unpaid liens from Plaintiffs’ medical providers amounting to $20,930. (See Memorandum of Liens and Fees, pp. 2-3.)  Ms. Yamini’s filing on June 20, 2023 further establishes that Plaintiffs agreed in writing that they would be responsible for payment of the liens.  (See Memorandum Re: Liens for Peter Garcia and John Garcia, Exs. A-E.)  Each agreement bears Plaintiffs’ signatures.

In sum, Moving Parties demonstrate the settlement agreement is enforceable.

            Plaintiffs have not filed any written oppositions.  Based upon Plaintiffs’ oral arguments at the hearings, as best the Court can tell, Plaintiffs seek to rescind their agreement.  Plaintiffs have refused to endorse the settlement checks and refused to provide Defendants with the agreed upon dismissals of the case because Plaintiffs contend they were unaware of the medical liens. “A party to a contract may rescind the contract …[i]f the consent of the party rescinding … was given by mistake, or obtained through duress, menace, fraud, or undue influence, exercised by or with the connivance of the party as to whom he rescind, or of any other party to the contract jointly interested with such party.”  (Civ. Code section 1689, subd. (b)(1).)  Given the foregoing evidence concerning the medical liens, Plaintiffs cannot and have not demonstrated a basis to rescind the settlement agreement.  Indeed, as demonstrated by Defendants submissions, the evidence demonstrates unequivocally that the Plaintiffs signed the liens and acknowledged their responsibility to pay them. (See Exhibits F-J Wilson Decla.; Memorandum Re: Liens for Peter Garcia and John Garcia, Exs. A-E.)  Moreover, Judge Oldendorf went over the terms of the agreement with the parties before dismissing the jury.  Both Plaintiffs agreed to the terms of the settlement.  While the scope of the liens discussed with Judge Oldendorf did not identify each of the liens, the exhibits attached to the Wilson Decla and the Memo of Liens puts the issue to rest. As the Judge Oldendorf stated: “And in addition to that, the Plaintiffs understand that if there are any healthcare providers who may have any kind of a lien on the recovery, they have to basically work out those agreements with those healthcare providers. It's basically between the Plaintiffs and those healthcare providers.” (Wilson Decla., Exhibit B: 2:8-14)

            The Court will enforce the terms of the settlement agreement.  Defendants may submit a proposed Order authorizing payments consistent with the terms of the settlement agreement. 

2. Double Vexation 

Although it is now clear the settlement agreement is enforceable, Moving Parties have not established despite several rounds of briefing a reasonable probability of double vexation.  

“[A]n interpleader action may not be maintained upon the mere suspicion of double vexation.”  (Westamerica Bank v. City of Berkeley (2011) 201 Cal.App.4th 598, 607-608.)  The plaintiff must allege facts showing a reasonable probability of double vexation, or a valid threat of double vexation. (Ibid.) 

In the October 20, 2022 minute order, the Court further stated the Moving Parties had failed to carry their burden to show they were facing a reasonable probability of double vexation or that conflicting demands have been made upon them.  In the Court’s tentative ruling, posted on February 24, 2023, the Court again stated that Moving Parties did not provide any evidence beyond their representations “on information and belief” that Plaintiffs’ former counsel, Mr. Johnson and Ms. Yamini, have made conflicting demands upon them with respect to the allocation of the settlement proceeds.   

Since then, Mr. Johnson has submitted stipulated communications showing that he and Ms. Yamini have agreed to an allocation of the settlement proceeds to which they are entitled. Specifically, Mr. Johnson and Ms. Yamini agree to split equally the attorney’s fees of $33,000: $16,500 for the Pasadena Law Center (Mr. Johnson’s law firm) and the Law offices of Negin Yamini.  It is also agreed that Pasadena Law Center is entitled to its costs of $2,200.  (See Stipulated Communications and Settlement Agreement re Attorney’s Fees and Costs.)  Ms. Yamini submits the retainer agreement between her and Plaintiffs which confirms that Ms. Yamini is entitled to at least 33% of any settlement proceeds.[1]  In sum, there is no dispute between Mr. Johnson and Ms. Yamini about the allocation of the settlement proceeds.  Moving Parties do not otherwise show that there is a reasonable probability of vexation, or that a stakeholder has asserted conflicting demands against Moving Parties.  No lienholder has asserted a claim against the proceeds, and the Court has determined the settlement agreement is enforceable.  Resolution of any liens not specifically stated in the settlement agreement are the responsibility of the Plaintiffs. The “stake” is not in dispute nor is there a realistic possibility of double vexation given the Court’s order.   

V.        CONCLUSION

            Based on the foregoing, the Court makes the following rulings:

            The motion for leave to deposit funds with the Court as part of the interpleader action is DENIED for lack of double vexation.

            The settlement agreement is enforceable.  Defendants are to submit a Proposed Order consistent with the terms of the settlement agreement.

            The Court will discuss with the Parties Plaintiffs’ 6/19/2020 cross-complaint against potential lien holders.

Moving party to give notice. 

Dated:   September 19, 2023                                   ___________________________________

                                                                                    Kerry Bensinger

                                                                                    Judge of the Superior Court

            Parties who intend to submit on this tentative must send an email to the Court at SSCDEPT27@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org.  Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter.  Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue.  If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.