TENTATIVE RULING

Defendant Amratbhair G. Patel dba Venice Hotel’s Motion to Interplead Funds and for Order of Discharge is DENIED.

Defendant Amratbhair G. Patel dba Venice Hotel to give notice.

REASONING

Defendant Amratbhair G. Patel dba Venice Hotel (“Venice Hotel”) moves the Court for an order (1) directing that it interplead funds, (2) discharging it from all liability and dismissing it from all pending lawsuits after it interpleads the funds, and (3) restraining all interpleader defendants from initiating any other action or proceeding against Defendant and Atlantic Casualty Insurance Company (“Atlantic”), which issued a commercial general liability insurance policy to Defendant. Defendants Harshad K. Uka and Nayna Uka (“the Ukas”) oppose the motion on a limited basis on the ground that Defendant Harshad K. Uka should also be dismissed from this action because he is an additional insured on the same insurance policy. Defendant/Cross-Defendant/Cross-Complainant Pelonis Appliances, Inc., Midea America Corp., and Midea (U.S.A.), Inc. (“the Midea Defendants”) oppose Venice Hotel’s motion on the ground that dismissal of the Midea Defendants’ claims in their cross-complaints would be prejudicial and violate their rights to procedural due process, Venice Hotel has not satisfied the substantive requirements for interpleader because there is no established legal right to tender the subject insurance policy funds, and Venice Hotel has not shown an interlocutory order or pled allegations as to the Midea Defendants and their claimant status. Plaintiff Ramakeli Bisland (“Bisland”) oppose the motion on the ground that Venice Hotel is seeking to limit its liability to $1,000,000 despite being most directly implicated in the subject incident, the funds tendered are insufficient to compensate the victims for their losses, and without knowing the full amount of insurance money, the Court cannot apportion the funds.

Code of Civil Procedure section 386, subdivision (b), provides that “[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, may bring an action against the claimants to compel them to interplead and litigate their several claims,” and “[w]hen the person, firm, corporation, association or other entity against whom such claims are made, or may be made, is a defendant in an action brought upon one or more of such claims, it may either file a verified cross-complaint in interpleader, admitting that it has no interest in the money or property claimed, or in only a portion thereof, and alleging that all or such portion is demanded by parties to such action, and apply to the court upon notice to such parties for an order to deliver such money or property or such portion thereof to such person as the court shall direct; or may bring a separate action against the claimants to compel them to interplead and litigate their several claims.”

Code of Civil Procedure section 386, subdivision (f), further provides that “[a]fter any such complaint or cross-complaint in interpleader has been filed, the court in which it is filed 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.”

Pursuant to Code of Civil Procedure section 386.5, “[w]here the only relief sought against one of the defendants is the payment of stated sum of money alleged to be wrongfully withheld, such defendant may, upon affidavit that [the defendant] 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.”

Further, Code of Civil Procedure section 386.6 provides that “[a] party to an action who follows the procedure set forth in Section 386 or 386.5 may insert in his motion, petition, complaint, or cross-complaint a request for allowance of his costs and reasonable attorney fees incurred in such action.” “In ordering a discharge of such party, the Court may, in its discretion, award such party his costs and reasonable attorney fees from the amount in dispute which has been deposited with the Court,” and “[a]t the time of final judgment in the action the Court may make such further provisions for assumption of such costs and attorney’s fees by one or more of the adverse claimants as may appear proper.” (Code Civ. Proc., § 386.6.) 

Notably, Venice Hotel’s motion appears to be based on a “good faith agreement-in-principal reached during mediation” (Reply, p. 2, l. 13), with Venice Hotel arguing that all parties agreed to resolve this action with Atlantic tendering the applicable $1,000,000 policy to all plaintiffs. (Mot., De Loa Decl. ¶ 14.) Put simply, it is not clear why the Court would dismiss Venice Hotel from the action in the context of an interpleader motion, i.e., it would seem that only Atlantic would have a basis to be dismissed pursuant to such a motion, not Venice Hotel, as Atlantic is the party against whom the only relief sought is the payment of a stated sum of money alleged to be wrongfully withheld (Code Civ. Proc., § 386.5). Moreover, there appears to be a dispute as to how much money is available under two insurance policies, such that interpleading only some of the funds will not fully resolve the various parties’ interest in the funds. In short, Venice Hotel seeks to use this interpleader motion as a way to avoid adjudication of its liability on the merits where not all parties involved in the action have agreed to a resolution with Venice Hotel. Venice Hotel’s relief is better sought in a motion for a good faith settlement determination, if such a settlement is reached and finalized. Accordingly, Defendant Amratbhair G. Patel dba Venice Hotel’s Motion to Interplead Funds and for Order of Discharge is DENIED.