Judge Mark E. Windham, Case Number: 23STLC03370, Date: 2024-03-07 Tentative Ruling

Judge: Mark E. Windham, Case: 23STLC03370, Date: 2024-03-07 Tentative Ruling

Case Number: 23STLC03370 Hearing Date: March 7, 2024 Dept: 26

Hartford Ins. Co. of the Midwest v. Castaneda, et al.

MOTION FOR ORDER TO DEPOSIT INTERPLEADER FUNDS, FOR DISCHARGE OF STAKEHOLDER, RESTRAINING ORDER AND ATTORNEY’S FEES

(CCP §§ 386, 386.5)

TENTATIVE RULING:

Plaintiff Hartford Insurance Company of the Midwest’s Motion to Deposit by Stakeholder, for Discharge of Stakeholder, for Attorney’s Fees and Costs, and for Temporary Restraining Order is GRANTED. PLAINTIFF IS AWARDED ATTORNEY’S FEES AND COSTS OF $4,931.00. THE HEARING ON DISBURSEMENT OF FUNDS OR FOR ORDER ESCHEATING THE FUNDS ACCORDING TO LAW IS SET FOR MAY 9, 2024 AT 8:30 AM IN DEPARTMENT 26 IN THE SPRING STREET COURTHOUSE.

ANALYSIS:

On May 23, 2023, Plaintiff Hartford Insurance Company of the Midwest (“Plaintiff”) initiated this indemnity and interpleader action against Defendants Robert Castaneda dba My Town Building and Remodeling (“Defendant Castaneda”), Josefina Orozco (“Defendant Orozco”), Sally Gonzalez (“Defendant Gonzalez”), Larisa Owen (“Defendant Owen”), Sareh Nabipour Kasma (“Defendant Kasma”), Chris Fikert (“Defendant Chris”), and Lisa Fikert (“Defendant Lisa”). Defendant Orozco answered on June 30, 2023; Defendant Owen answered on August 15, 2023. Defendants Castaneda, Kasma, and the Fikerts defaulted on December 7, 2023. Defendant Gonzalez was dismissed on the same date.

The Complaint alleges that this action arises from a dispute over Construction Bond No. 57BSBIN1134 (the “Bond”) in the penal sum of $15,000.00. (Compl., ¶13.) Defendant Castaneda allegedly agreed to indemnify Plaintiff in exchange for the issuance of the Bond pursuant to an Application and Indemnity Agreement (“the Indemnity Agreement”). (Id. at ¶¶13-14.) After the Bond was issued, the remaining Defendants alleged that Defendant Castaneda committed some act that gave rise to liability under the Bond and now have made claims against the Bond. (Id. at ¶¶14-15.) Defendant is liable to Plaintiff for its expenses, costs and attorney’s fees arising out of issuance of the Bond. (Id. at ¶¶15-16.)

Plaintiff filed the instant Motion to Deposit by Stakeholder, for Discharge of Stakeholder, for Attorney’s Fees and Costs, and for Temporary Restraining Order on February 8, 2024. To date, no opposition to the Motion has been filed.

Legal Standard

Interpleader is a procedure whereby a person holding money or personal property to which conflicting claims are being made by others, or may be made, can join the adverse claimants and force them to litigate their claims among themselves. (Code Civ. Proc., § 386, subd. (b).) Hancock Oil Co. v. Hopkins (1944) 24 Cal.2d 497, 508 (i.e., an escrow-holder who receives conflicting demands from the parties to the escrow regarding the funds or documents he or she holds); City of Morgan Hill v. Brown (1999) 71 Cal.App.4th 1114, 1122.)

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 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.)

The stakeholder may seek reimbursement for its costs and reasonable attorneys’ fees incurred.

(UAP-Columbus 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. (Ibid.) Ultimately, such payment may be charged to one or more of the adverse claimants in the final judgment. (Code Civ. Proc., § 386.6.) Finally, the Court may issue an “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.” (Code Civ. Proc., § 386, subd. (f).)

Discussion

Plaintiff’s request for an order depositing the interpleader funds and to be discharged from liability on the Complaint in interpleader proper. All Defendants have now appeared, been dismissed, or have had their default entered.

Substantively, Plaintiff cannot determine the validity of the conflicting demands that have been made. (Motion, Horowitz Decl., ¶¶4-5.) Upon deposit of the funds to the court, Plaintiff may be discharged from further liability. (Code Civ. Proc., §§ 386, 386.5.) Furthermore, the fees and costs sought by Plaintiff are proper. Plaintiff’s counsel has expended substantial attorneys’ fees and costs bringing this action and protecting itself from liability. Specifically, Plaintiff’s counsel filed the instant action and motion, served all Defendants, prepared the instant Motion, will appear at the instant hearing, will deposit the bond, and has sought to preserve the surplus funds. (Motion, Horowitz Decl., ¶¶10-11 and Exh. B.) Fees and costs are awarded to Plaintiff in the amount of $4,931.00. (Ibid.)

Conclusion

Court clerk to give notice to all parties, claimants, and interested parties.