TENTATIVE RULING

Defendant/Cross-Complainant American Contractors Indemnity Company’s Motion for Order of Discharge and Award of Costs and Attorneys’ Fees and Order for Deposit is GRANTED.

The Court orders Defendant/Cross-Complainant American Contractors Indemnity Company to deposit the remaining penal sum of $23,000 with the Court forthwith.  

Upon the deposit of $23,000, the Court orders all liability asserted against Defendant/Cross-Complainant American Contractors Indemnity Company in connection with Contractor’s License Bond, Bond No. 100710093 discharged.

Upon the deposit of $23,000, the Court awards Defendant/Cross-Complainant American Contractors Indemnity Company reasonable attorney fees and expenses in the sum of $2,000 as allowance for costs and expenses incurred in this proceeding.

Defendant and Cross-Complainant Old Republic Surety Company to give notice.

REASONING

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.) 

Defendant/Cross-Complainant American Contractors Indemnity Company (“ACIC”) has stated and substantiated a legally sufficient claim in interpleader, as it provides the declaration of Tyler Hayes, a Senior Bond Claims Litigation Representative, who describes that on December 29, 2022, ACIC as surety and Sun Energy Construction as principal made, executed, and delivered Contractor’s License Bond, Bond No. 100710093 in the sum of $15,000, which was increased by operation of law to $25,000, with $17,500 reserved for claims made by homeowners. (Mot., Hayes Decl. ¶¶ 5-7, Ex. A.) ACIC received multiple written demand for payment of losses and damages from the named Cross-Defendants, and ACIC filed a Cross-Complaint for interpleader and injunction. (Mot., Hayes Decl. ¶¶ 10, 11.) ACIC claims no interest in the funds, and it cannot determine the amount which should be paid to each claimant. (Mot., Hayes Decl. ¶¶ 12, 13.) Thus, ACIC seeks to be discharged from liability with regard to the bond, and it seeks recovery of $2,000 for attorney fees and costs incurred. (Mot., Hayes Decl. ¶ 14.)

Plaintiff Shirley Wang (“Plaintiff”)’s complaint alleges that on July 4, 2023, Plaintiff entered into a written agreement with Defendant Sun Energy Construction, whereby Defendant Sun Energy Construction would furnish and install a residential solar energy system. (Compl. ¶ 10.) Plaintiff allege Defendant Sun Energy Construction performed substandard work, causing Plaintiffs to incur approximately $42,452.50 in damages, which represents the difference between the contract price and the reasonable cost to complete the project. (Compl. ¶¶ 14-22.) Plaintiff’s third cause of action alleges that Plaintiff is entitled to the bond issued by ACIC in the penal amount of approximately $25,000.00. (Compl. ¶¶ 33-39.) 

The Court finds that the relief requested is warranted. The only relief sought against ACIC in Plaintiff’s complaint is the payment of the bond issued in favor of Defendant Sun Energy Construction, ACIC has no interest in the proceeds of the bond, and ACIC has provided notice to all parties. Based on the foregoing, ACIC is entitled to an order dismissing it from the present action and discharging it from liability, upon the deposit of the bond with the Court, and ACIC is entitled to attorney fees and costs in the amount of $2,000, as ACIC has also presented evidence that it has incurred more than that amount in fees and costs in bringing this action. (Mot., Kim Decl. ¶ 4.)

Accordingly, Defendant/Cross-Complainant American Contractors Indemnity Company’s Motion for Order of Discharge and Award of Costs and Attorneys’ Fees and Order for Deposit is GRANTED. The Court orders Defendant/Cross-Complainant American Contractors Indemnity Company to deposit the remaining penal sum of $23,000 with the Court forthwith. Upon the deposit of $23,000, the Court orders all liability asserted against Defendant/Cross-Complainant American Contractors Indemnity Company in connection with Contractor’s License Bond, Bond No. 100710093 discharged. the Court awards Defendant/Cross-Complainant American Contractors Indemnity Company reasonable attorney fees and expenses in the sum of $2,000 as allowance for costs and expenses incurred in this proceeding. 

 Defendant/Cross-Complainant shall thereafter deposit the sum of $23,000 and upon deposit of said sum all liability against it shall be discharged and American Contractors Indemnity Company shall be dismissed from this action.