Judge: Melissa R. Mccormick, Case: "Hoang v. Ben Auto Haus, LLC", Date: 2023-08-03 Tentative Ruling

Plaintiff Ann N. Hoang’s Demurrer to Second Amended Cross-complaint

Plaintiff Ann N. Hoang demurs to defendant and cross-complainant American Contractors Indemnity Company’s second amended cross-complaint.  The second amended cross-complaint alleges one cause of action for interpleader.  Plaintiff contends the cause of action fails to state a claim for interpleader and is uncertain.  For the following reasons, plaintiff’s demurrer is sustained with leave to amend.

In ruling on a demurrer, a court must accept as true all allegations of fact contained in the complaint.  Blank v. Kirwan (1985) 39 Cal.3d 311, 318.  A demurrer challenges only the legal sufficiency of the affected pleading, not the truth of the factual allegations in the pleading or the pleader’s ability to prove those allegations.  Cundiff v. GTE Cal., Inc. (2002) 101 Cal.App.4th 1395, 1404-05.  Questions of fact cannot be decided on demurrer.  Berryman v. Merit Prop. Mgmt., Inc. (2007) 152 Cal.App.4th 1544, 1556.  Because a demurrer tests only the sufficiency of the complaint, a court will not consider facts that have not been alleged in the complaint unless they may be reasonably inferred from the matters alleged or are proper subjects of judicial notice.  Hall v. Great W. Bank (1991) 231 Cal.App.3d 713, 718 n.7.

“Any person, firm . . . 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.”  Civ. Proc. Code § 386(b).  A complaint in interpleader must show that the defendants make conflicting claims to the subject matter, and that the plaintiff cannot safely determine which claim is valid and offers to deposit the money in court.  Westamerica Bank v. City of Berkeley (2011) 201 Cal.App.4th 598, 607-08. 

The right to the remedy of interpleader is founded on the consideration that a person is threatened not just with double liability, but with double vexation in respect to one liability.  Id. at 608.  An interpleader action, however, may not be maintained upon the mere pretext or suspicion of double vexation; the plaintiff must allege facts showing a reasonable probability of double vexation, or a valid threat of double vexation.  Id.

Plaintiff argues ACIC’s cause of action for interpleader fails to state a claim because ACIC does not face a viable threat of double vexation.  The court sustained plaintiff’s prior demurrer to ACIC’s first amended cross-complaint on the basis that the “vague first amended cross-complaint does not allege sufficient facts from which the court can conclude [ACIC] faces a reasonable probability of double vexation.”  See 2/16/23 Order.  While ACIC has added citations to various statutes and cases in the second amended cross-complaint, ACIC has not added any new factual allegations in the second amended cross-complaint.  Accordingly, the court again cannot conclude from ACIC’s conclusory allegations that ACIC faces a reasonable probability of double vexation.  Farmers New World Life Ins. Co. v. Rees (2013) 219 Cal.App.4th 307, with its unique factual situation, does not support ACIC’s contention that its second amended cross-complaint states an interpleader claim.  Plaintiff’s demurrer to the second amended cross-complaint is sustained with leave to amend. 

Should ACIC desire to file a third amended cross-complaint that addresses the issues in this ruling, ACIC must file and serve it by August 14, 2023.  If ACIC chooses to file a third amended cross-complaint, ACIC should allege the specific facts that underlie, inter alia, the following allegations:

•         “ACIC is informed and believes, and thereon alleges, that each of the fictitiously named Cross-Defendants may have a claim or claims against ACIC on the bond hereinafter described which may conflict with the claims of Cross-Defendants herein and which may subject ACIC to multiple litigation and[/]or liability” (Second Amended Cross-Complaint ¶ 3);

•         “ACIC is informed and believes and thereon alleges that Cross-Defendants, and each of them, do or may claim an interest in the dealer bond” (Second Amended Cross-complaint ¶ 9);

•         “ACIC is informed and believes Cross-Defendant BEN AUTO HAUS, LLC disputes any claim and any disbursement of the bond to any Cross-Defendant, including HOANG” (Second Amended Cross-complaint ¶ 12); and

•         “[C]ross-Defendants, and each of them, have made claims [against the bond] that are adverse and conflicting and ACIC cannot determine which claim or ascertain what amount of ACIC’s obligations should be paid to either Cross-Defendant” (Second Amended Cross-complaint ¶ 13).

Plaintiff to give notice.