Judge Mark E. Windham, Case Number: 24STLC01813, Date: 2024-10-24 Tentative Ruling

Judge: Mark E. Windham, Case: 24STLC01813, Date: 2024-10-24 Tentative Ruling

Case Number: 24STLC01813 Hearing Date: October 24, 2024 Dept: 26

California Injury, PLC v. Platinum Chiropractor Center, et al.

MOTION FOR DISCHARGE OF STAKEHOLDER AND ATTORNEY’S FEES, COSTS

(CCP §§ 386, 386.5)

TENTATIVE RULING:

Plaintiff California Injury PLC’s Motion to Discharge Interpleader Stakeholder From Liability And Awarding Costs And Fees is DENIED.

ANALYSIS:

On March 13, 2024, Plaintiff California Injury, PLC (“Plaintiff”) initiated this interpleader action against Defendants Platinum Chiropractor Center, Shin Imaging LLC, Raad Jeiroudi, MD, Euclid Outpatient Surgery Center, and Cesar Omar Ayala (“Defendants”). Following their failure to file responsive pleadings, default was entered against all Defendants in June 2024.

Plaintiff filed the instant Motion to Discharge Interpleader Stakeholder From Liability And Awarding Costs And Fees on July 8, 2024. To date, no opposition has been filed.

Legal Standard

Interpleader is a procedure whereby a person holding money or personal property to which conflicting claims are being or may be made by others 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 requests an order to be discharged from liability on the Complaint, which alleges in relevant part: Plaintiff is in possession of funds in the amount of $7,000.00, which represents the gross settlement proceeds received on behalf of Defendant Ayala in a personal injury matter. (Compl., ¶1A.) The amount of attorney’s fees was $3,500.00 and attorney fees is a priority lien. (Id. at ¶2.) The case costs totaled $955.00 and is a priority lien. (Id. at ¶3.) The amount in controversy is $2,545.00, which represents the net settlement proceeds after the priority lien for attorney’s fees and costs, received on behalf of Defendant Ayala. (Id. at ¶4.) There are four lien holders, each of whom provided medical care to Defendant Ayala, and all of whom have asserted claims to the net settlement proceeds. (Id. at ¶6.) The total amount of the medical liens far exceeds the available funds necessary to satisfy each such lien. (Ibid.)

Plaintiff has not shown that it is properly an interpleader stakeholder that can be discharged from liability. The Complaint alleges that Plaintiff is in possession of settlement proceeds in the amount of $7,000.00 from the underlying personal injury action. Plaintiff then claims more than half that amount for its attorney’s fees and costs lien. No authority is provided in the instant Motion to show that a stakeholder can allege its liens have priority and seek to interplead only the net proceeds. Case law dictates that “[a]fter the client obtains a judgment, the attorney must bring a separate, independent action against the client to establish the existence of the lien, to determine the amount of the lien, and to enforce it.” (Carroll v. Interstate Brands Corp. (2002) 99 Cal.App.4th 1168, 1173.) In an action to “establish the existence of the lien, to determine the amount of the lien, and to enforce it” the attorney cannot be a disinterested stakeholder, which is necessary to be an interpleader stakeholder. The Court is aware of no authority that allows an attorney to assert the right to an attorney fees lien via an interpleader action as the alleged disinterested stakeholder of the remaining proceeds. To the extent Plaintiff can point the Court to such authority, the Court will gladly consider it.

Conclusion

Based on the foregoing, Plaintiff California Injury PLC’s Motion to Discharge Interpleader Stakeholder From Liability And Awarding Costs And Fees is DENIED.

Court clerk to give notice.