Judge: Latrice A. G. Byrdsong, Case: 23STLC01083, Date: 2023-10-03 Tentative Ruling
Case Number: 23STLC01083 Hearing Date: October 3, 2023 Dept: 25
Western Surety Company v. Marleen Navarro, et al.
23STLC01083
ANALYSIS:
I. Background
On February 14, 2022, Plaintiff Western Surety Company (“Plaintiff”) filed a Complaint for interpleader against Defendants Marleen Navarro, Melita Montgomery, Miguel Llaneras, Mark Lanie, and Does 1 through 50.
Defendant Melita Montgomery filed an Answer to the Complaint on May 16, 2023 and Defendant Marleen Navarro filed an Answer to the Complaint on May 30, 2023 respectively.
On July 12, 2023, Plaintiff filed the instant Motion to Deposit Funds, Exoneration of Surety Bond, and for Attorney’s Fees (“Motion”). On September 26, 2023, Plaintiff filed a Notice of Non-Opposition to its Motion to Deposit Funds, Exoneration of Surety Bond, and for Attorney’s Fees and Costs.
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 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; 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.)
III. Discussion
The subject matter of the instant Motion is a $25,000 bond issued to Blue Line Construction Pros Inc. as principal and the Contractors State License Board as obligee. (Complaint ¶ 7.)
Plaintiff filed a verified Complaint in Interpleader naming the claimants to the bond – Marleen Navarro, Melita Montgomery, Miguel Llaneras, Mark Lanie, and Does 1 through 50. (Complaint at ¶8.) Plaintiff contends that it “cannot determine which claim or claims take priority, and is exposed to liability in excess of the penal sum of the bond.” (Dibashi Decl. ¶6.) Defendants have made claims in excess of the bond funds. (Id. at ¶5.) Plaintiff is a stakeholder with no interest in the amount or any portion of the bond. (Id. at ¶6.) With no other alternative, Plaintiff filed its Complaint for Interpleader. (Complaint, Lee Decl. ¶3.) Plaintiff requests permission from the Court to deposit the subject bond funds to allow the Court to determine their proper distribution. (Dibashi Decl. ¶7.) Plaintiff also requests the Court to exonerate the bond and prevent Plaintiff from continuing to incur further unnecessary attorneys’ fees and costs in connection to the Interpleader of these funds. (Id.)
The Court finds that Plaintiff has satisfied all requirements for the instant Motion. Thus, Plaintiff is entitled to be dismissed once it deposits the funds with the clerk of the Court. Furthermore, Plaintiff is entitled to an order restraining all parties “from instituting or further prosecuting any other proceeding” related to Plaintiff’s rights and obligations under the bond. Plaintiff’s unopposed motion for an order exonerating the bond and directing release of the bond to Plaintiff is also granted. The bond is no longer necessary and/or warranted.
B. Attorney’s Fees and Costs
The stakeholder may seek reimbursement for its costs and reasonable attorneys’ fees incurred. (Code Civ. Proc. § 386.6; 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.)
Plaintiff requests $4,484.67 in attorney’s fees and costs related to the interpleader. Plaintiff has incurred attorney fees in the amount of $3,952.00 in connection to the filing of the Interpleader action. (Dibashi Decl. ¶6.) The costs are as follows: $532.67 in filing fees, $0 in service fees. (Dibashi Decl. ¶8., Lee Decl. ¶5.) Plaintiff’s counsel’s billing rate is $245 per hour. (Lee Decl. ¶6.) Plaintiff’s counsel services included 14.2 hours of attorney time related to the Interpleader. (Dibashi Decl. ¶6.) Plaintiff anticipates incurring an additional 2 hours, $490.00 to review the opposition, draft a reply, appear at the hearing and complete the deposit of the bond funds. (Lee Decl. ¶6.) However, no opposition is filed so a reduction of attorney’s fees for Counsel is warranted. As such, the Court is inclined to find that Plainitff’s counsel will spend one hour attending the hearing on this motion and completing the deposit of the bond funds. Accordingly, the reward is reduced by 1 hour or $4,239.67.
The Court finds the request to be reasonable and awards attorney’s fees and costs of $4,239.67, to be deducted from the interpleader funds prior to their deposit with the Court, resulting in a net deposit of $20,760.33.
IV. Conclusion & Order
Plaintiff’s Motion to Deposit Funds, Exoneration of Surety Bond, and for Attorney’s Fees and Costs 3is GRANTED, contingent on Plaintiff’s deposit of funds with the Court in the amount of $20,760.33. Interpleader funds of $20,760.33 are to be deposited within ten (30) days of receipt of this order.
Moving party is ordered to give notice.