Judge: Mark E. Windham, Case: 21STLC04659, Date: 2022-08-01 Tentative Ruling

Case Number: 21STLC04659    Hearing Date: August 1, 2022    Dept: 26

DISCHARGE FROM LIABILITY

(CCP § 386.5)

TENTATIVE RULING:

Defendant Betty T. Yee, Controller of the State of California’s Motion For Discharge From Liability, Deposit Funds And Dismissal From Action is GRANTED. WITHIN 20 DAYS OF THIS ORDER, DEFENDANT IS TO DEPOSIT FUNDS OF $8,952.77 WITH THE CLERK OF THE COURT. UPON SAID DEPOSIT, DEFENDANT WILL BE DISCHARGED FROM LIABILITY AND DISMISSED FROM THE ACTION.

ANALYSIS:

Plaintiffs Don Ramey Logan, Jr. and Gregory Logan (“Plaintiffs”) filed the instant action against Defendant Betty T. Yee, Controller of the State of California (“Defendant”) on June 22, 2021. Plaintiffs bring this action under Code of Civil Procedure section 1541 to recover unclaimed property from their father’s estate, which is now in Defendant’s control.

Defendant filed its Answer on January 5, 2022 and on June 6, 2022, filed the instant Motion for Discharge from Liability, Deposit of Funds, and Dismissal from Action. No opposition has been filed to date.

Discussion

Defendant brings the instant Motion pursuant to Code of Civil Procedure section 386.5, which states in relevant part:

Where the only relief sought against one of the defendants is the payment of a stated amount of money alleged to be wrongfully withheld, such defendant may, upon affidavit that he 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.

(Code Civ. Proc., § 386.5.) The only relief sought in the Complaint is return of the funds identified as Property ID: 959627917 in the State Controller’s Unclaimed Property records, in the amount of $8,952.77. (Compl., p. 6.) The Motion is supported by the declaration of staff counsel of the State Controller’s Office, who attests that Defendant received a claim to the funds from Plaintiff Don Logan, Jr. on August 6, 2020, and following the filing of this action, received a claim to the funds from the Federal Deposit Insurance Corporation (“FDIC”) on February 8, 2022. (Motion, Dersch Decl., ¶¶3-4 and Exhs. 2-3.) Defendant itself has no interest in the funds. (Id. at ¶6.) This demonstrates that Defendant is just a disinterested stakeholder of the funds, which are in dispute between Plaintiffs and the FDIC. While the FDIC is not a party to the action at this time, as required by the statute, it only recently made its interest in the funds known to Defendant. Defendant’s request to substitute the FDIC into this action may be granted pursuant to Code of Civil Procedure section 389, subdivision (a). The specifics of that order, however, will be made upon ruling on Plaintiff’s Motion for Leave to Amend the Complaint, which is set for hearing on November 14, 2022.

The Court, therefore, will discharge Defendant from liability and dismiss it from this action, upon deposit of the disputed funds with the clerk.

Conclusion

Defendant Betty T. Yee, Controller of the State of California’s Motion For Discharge From Liability, Deposit Funds And Dismissal From Action is GRANTED. WITHIN 20 DAYS OF THIS ORDER, DEFENDANT IS TO DEPOSIT FUNDS OF $8,952.77 WITH THE CLERK OF THE COURT. UPON SAID DEPOSIT, DEFENDANT WILL BE DISCHARGED FROM LIABILITY AND DISMISSED FROM THE ACTION.

Moving party to give notice.