Judge: Mark E. Windham, Case: 22STLC08100, Date: 2023-05-23 Tentative Ruling

Case Number: 22STLC08100    Hearing Date: May 23, 2023    Dept: 26

Goldston Trading, Inc. v. Hy Technology, Inc., et al.

MOTION FOR INTERPLEADER OR TO DEPOSIT FUNDS

(CCP §§ 386, 386.5, 572)

TENTATIVE RULING:

Defendant Chase Bank, NA’s Motion for Interpleader is GRANTED. DEFENDANT CHASE BANK, NA IS TO DEPOSIT FUNDS OF $15,309.39 WITH THE COURT WITHIN 20 DAYS OF THIS ORDER.

ANALYSIS:

Plaintiff Goldston Trading, Inc. (“Plaintiff”) filed the instant action for (1) common counts; (2) fraud; (3) conversion; (4) unjust enrichment; and (5) constructive trust against Defendants Hy Technologies, Inc. (“Defendant Hy”), Weifeng Yang (“Defendant Yan”), Aiqin Mo (“Defendant Mo”), and JP Morgan Chase, NA (“Defendant Chase”). The first, second and fifth causes of action are alleged against all Defendants; the third and fourth causes of action are alleged against Defendants Hy, Yang and Mo.

Default was entered against Defendant Mo on January 18, 2023, against Defendant Hy on January 27, 2023, and against Defendant Yang on February 1, 2023. Defendant Chase filed a verified cross-complaint in interpleader against Defendants and Plaintiff on January 23, 2023.

Defendant Chase filed the instant motion for interpleader on February 21, 2023. No opposition has been filed to date.

Discussion

This action arises out of Plaintiff’s allegedly mistaken transfer of funds to Defendant Hy’s bank account, which is under Defendant Chase’s control. Plaintiff alleges that Defendants became indebted to Plaintiffs in the amount of $15,309.39 on November 8, 2022 and engaged in a scheme to wrongfully and illegally retain Plaintiff’s funds despite knowing their retention of the money was wrong, fraudulent, and illegal. (Compl., ¶¶15-17.) Also, Plaintiff alleges that Defendants received $15,309.39 from Plaintiff and have retained that amount for their benefit and use such that a constructive trust should be imposed. (Id. at ¶¶33-34.)

Defendant Chase, having filed a cross-complaint in interpleader now moves “for interpleader” by seeking an order from the Court to deposit the funds and be discharged from liability with prejudice. The motion is brought pursuant to Code of Civil Procedure sections 386, 386.2 and 572.

Code of Civil Procedure section 386 provides two separate bases for bringing an interpleader action. Subdivision (a) of the statute pertains to a complaint in interpleader brought by a defendant “against whom an action is pending upon a contract, or for specific personal property . . . .” (Code of Civ. Proc., § 386, subd. (a).) Subdivision (b) pertains to a complaint in interpleader brought by “[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 . . . .” (Code of Civ. Proc., § 386, subd. (b).) Here, subdivision (a) is inapplicable because this is not an action on contract nor for specific personal property.

A complaint in interpleader allows an obligor to require parties with conflicting claims to litigate those claims against each other, instead of against the obligor. (Code Civ. Proc., § 386, subd. (b).) The purpose of interpleader is to prevent a multiplicity of suits and double vexation. (City of Morgan Hill v. Brown (1999) 71 Cal.App.4th 1114, 1122.) However, an interpleader action may not be maintained upon the mere suspicion of double vexation. (Westamerica Bank v. City of Berkeley (2011) 201 Cal.App.4th 598, 607-608.) The plaintiff must allege facts showing a reasonable probability of double vexation, or a valid threat of double vexation. (Ibid.) Here, Defendant Chase has shown that it is already subjected to claims by Plaintiff and will probably be subject to claims by the other Defendants who appear to dispute Plaintiff’s claim to the funds. (Motion, Arroyo Decl., ¶5.) In light of these claims, which threaten Defendant Chase with double vexation, interpleading the funds is appropriate under Code of Civil Procedure section 386, subdivision (b).

Conclusion

Based on the foregoing, Defendant Chase Bank, NA’s Motion for Interpleader is GRANTED. DEFENDANT CHASE BANK, NA IS TO DEPOSIT FUNDS OF $15,309.39 WITH THE COURT WITHIN 20 DAYS OF THIS ORDER.

Moving party to give notice.