Judge: Latrice A. G. Byrdsong, Case: 23STLC01735, Date: 2023-12-18 Tentative Ruling
Case Number: 23STLC01735 Hearing Date: December 18, 2023 Dept: 25
Hearing Date: Monday, December 18, 2023
Case Name: OLD REPUBLIC SURETY COMPANY, a corporation v. VITTORIO REMODELING & CONSTRIJCTION, INC., a corporation; JUNE SANTUCCI, an individual; GINA HOLZER, an individual; MARY W. BROWN, an individual; and DOES I through 75
Case No.: 23STLC01735
Motion: Motion for Order to Deposit by Stakeholder, for Discharge of Stakeholder, Restraining Order, and Request for Attorney's Fees and Costs
Moving Party: Plaintiff Old Republic Surety Company
Responding Party: None
Notice: OK
Tentative Ruling: Plaintiff Old Republic Surety Company’s Motion for discharge is GRANTED. Plaintiff’s request for attorney’s fees and costs of $1,800.00 is GRANTED. Remaining interpleader funds of $13,200.00 are to be deposited with the court within ten (30) days of notice of this Court’s order.
BACKGROUND
Plaintiff Old Republic Surety Company (“Plaintiff”) filed a verified Complaint in interpleader against Defendants Vittorio Remodeling & Construction, Inc. (“Vittorio”), June Santucci (“Santucci”), Gina Holzer (“Holzer”), and Mary W. Brown (“Brown”).
Defendants Brown, Santucci, and Holzer filed an Answer on May 9, 2023.
Defendant Vittorio defaulted on October 9, 2023.
On October 9, 2023, Plaintiff substituted T&J Flooring & Design (“T&J”) for Doe 6.
Plaintiff filed the instant Motion for Order to Deposit by Stakeholder, for Discharge of Stakeholder, Restraining Order, and Request for Attorney's (the “Motion”) on October 9, 2023. No opposition was filed.
T&J was served with the Complaint and Motion on October 25, 2023.
MOVING PARTY POSITION
Plaintiff seeks permission to deposit the bond funds of $15,000.00 less attorney’s fees and costs of $1,800.00 incurred in this filing and maintaining this action. Upon deposit, Plaintiff seeks to be discharged from all liability asserted against it with respect to said bond. Plaintiff asserts that it has no interest in the proceeds of Bond No. WCL5923457 and is a mere stakeholder with respect thereto. Conflicting demands have been asserted against Plaintiff claiming entitlement to the bond proceeds or some portion thereof by the claimants. The claimants have asserted conflicting demands on Plaintiff. Said demands were made without any collusion with Plaintiff and Plaintiff cannot determine with certainty which, if any demand is valid. Thus, Plaintiff is entitled to the requested relief.
OPPOSITION
None filed.
REPLY
None filed.
ANALYSIS
I. 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 also “enter 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.)
II. Discussion
The subject of this action is a $15,000.00 Contractor’s State License Bond issued to Defendant Vittorio as the principal. (Sosa Decl., ¶ 2.) In its verified Complaint, Plaintiff alleges that Defendant Vittorio committed some act that gives rise to liability on the subject bond, that Defendant Vittorio has denied liability, and that Defendant Vittorio 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. (Id. at ¶ 13; Sosa Decl., ¶ 8.)
As all claimants have been served with the Summons and Complaint, served with the instant motion, or are in default, relief is proper. (CCP §§ 386 and 386.5.) The subject matter of this action is $15,000. Currently, Plaintiff cannot determine the validity of the conflicting demands that have been made. (Sosa Decl., ¶8.) Upon deposit of the funds to the Court, this party may be discharged from further liability and the Court enters a restraining order to prevent the prosecution of other actions affecting the rights and obligations as between the parties to the interpleader. (CCP § 386.5, 386(f).) Furthermore, the fees and costs sought by Plaintiff are proper. Plaintiff’s counsel has expended attorneys’ fees and costs bringing this action and protecting itself from liability. Specifically, Plaintiff’s counsel filed the instant action and motion, and served all Defendants. (Sosa Decl., ¶6, Exh. 1.) Therefore, fees and costs are awarded in the amount of $1,800.00.
For the foregoing reasons, Plaintiff Old Republic Surety Company’s Motion for discharge is GRANTED. Plaintiff’s request for attorney’s fees and costs of $1,800 is also GRANTED. Remaining interpleader funds of $13,200.00 are to be deposited with the court within ten (30) days of notice of this Court’s order.
Plaintiff is ordered to give notice.