Judge: Kevin C. Brazile, Case: 22STCV22928, Date: 2023-02-06 Tentative Ruling

Hearing Date: February 6, 2023

Case Name: Portfolio Escrow, Inc. v. Santosh Solanki, DDS, et al.

Case No.: 21STCV31624 (related to case no. 22STCV03630)

Matter: Motion to Deposit Interpleader Funds 

Moving Party: Plaintiff Portfolio Escrow, Inc.

Responding Party: Unopposed

Notice: OK

Ruling: The Motion is granted, except as to fees and costs. 

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic. 

In case no. 21STCV31624, Santosh Solanki filed a Complaint against Joo Hyeong Yoo, Hope Dental, and Honest Dental Group, Inc. 

In related case no. 22STCV03630, Plaintiff Portfolio Escrow, Inc. (“Portfolio”) filed a Complaint in interpleader against Defendants Santosh Solanki, DDS and Honest Dental Group, Inc.

 Portfolio seeks to deposit $19,629.40 with the Court and to be discharged of liability with respect to this money.  Portfolio also requests $5,495 in attorneys’ fees and costs.

Interpleader is a procedure permitting a person who holds money or personal property that is subject to conflicting claims of third parties to join the adverse claimants so that they may litigate their claims among themselves.  (City of Morgan Hill v. Brown (1999) 71 Cal.App.4th 1114, 1122 (City of Morgan Hill).)  By depositing the money or property in court, the so-called “stakeholder” may avoid multiplicity of actions and the risk of inconsistent results in the event each claimant were to initiate a separate legal action.  (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 874 (Cantu).)

In this case, Portfolio filed its Complaint against the conflicting claimants, seeking for them to litigate their respective claims to the subject escrow funds.  (See Code Civ. Proc. § 386(b).)  In this circumstance, the court follows a two-step procedure: first, the court determines whether the stakeholder may bring the suit and force the claimants to interplead; second, the court will discharge the stakeholder from liability and then determine the claimants’ respective rights to the property.  (City of Morgan Hill, supra, 71 Cal.App.4th at pp. 1126-1127.)

Portfolio properly initiated the interpleader.  “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 the property without need for the stakeholder to be a party to the suit.”  (Pacific Loan Management Corp. v. Superior Court (1987) 196 Cal.App.3d 1485, 1489-1490.)  That is the case here.  Portfolio provides that it is holding the funds as an escrow agent and that it does not claim any interest in the funds; instead, Portfolio requests that the funds be deposited with the Court such that the Court may determine the claimants’ respective rights to the funds.  Portfolio had the right to interplead the disputed funds on receipt of the conflicting demands, and it was not obligated to resolve the dispute before incurring the expense of interpleader.  (See Cantu, supra, 4 Cal.App.4th at p. 876.)  Accordingly, it is for the Court to determine the claimants’ respective rights to the subject escrow funds.  

Portfolio also seeks $5,495 in attorney’s fees and costs in bringing an interpleader action pursuant to Code Civ. Proc. § 386.6.  

Under Code Civ. § 386.6, attorneys’ fees and costs are discretionary.

Given that the interpleader fund is small, the Court, in its discretion, declines to award fees and costs.  The Motion is otherwise granted.  

Also, the Court consolidates the related cases.  

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.