Judge: Kevin C. Brazile, Case: 23STCV11406, Date: 2024-01-17 Tentative Ruling

Hearing Date: February 14, 2024

Case Name: East West Bank v. DB Shipping (USA) Inc., et al.

Case No.: 23AHCV00054 

Matter: Motion for Discharge form Interpleader Action

Moving Party: Plaintiff East West Bank

Responding Party: Defendant Gerry Hong, joined by Defendants DB Shipping (USA) Inc.

and Ren Chang Wang

Notice: OK

Ruling: The Motion is granted in part.

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. 

On January 9, 2023, Plaintiff East West Bank (“EWB”) filed a Complaint in interpleader against Defendants Gerry Hong, DB Shipping (USA) Inc., and Ren Chang Wang.

 Having deposited $569,433.81 with the Court, EWB seeks to be discharged of liability with respect to this money.  EWB also requests $47,032.00 in attorneys’ fees and $1,484.03 in costs from the interpleader fund.

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, EWB 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.)

EWB 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.  EWB indicates that it merely provides the account in which the funds were held and that it does not claim any interest in the funds; instead, EWB requests that the funds be deposited with the Court such that the Court may determine the claimants’ respective rights to the funds.  EWB 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 funds.  EWB will be discharged of liability.

As mentioned, EWB also seeks $47,032.00 in attorneys’ fees and $1,484.03 in costs in bringing an interpleader action pursuant to Code Civ. Proc. § 386.6.  

Defendant Gerry Hong, joined by Defendants DB Shipping (USA) Inc. and Ren Chang Wang, opposes this request as excessive and asserts that EWB acted improperly with the funds, such that no award is warranted.

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

The Court finds that the hours expended for the interpleader action are excessive.  The Court awards a total of $10,000 in fees and costs only. 

The Motion is granted in part as set forth herein. 

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.