Judge: Melvin D. Sandvig, Case: 22CHCV01398, Date: 2023-08-16 Tentative Ruling
Case Number: 22CHCV01398 Hearing Date: October 3, 2023 Dept: F47
Dept. F47
Date: 10/3/23
Case #22CHCV01398
MOTION TO DEPOSIT
BY STAKEHOLDER
Motion filed on 6/8/23.
MOVING PARTY: Defendant/Cross-Complainant
Merchants Bonding Company (Mutual)
RESPONDING PARTY: All other parties
NOTICE: ok
RELIEF REQUESTED: An order
of
deposit, restraining order, interpleader and attorney’s fees. Specifically, Defendant/Cross-Complainant
Merchants Bonding Company (Mutual) seeks an order that:
(1)
MERCHANTS Bonding deposit with the Court the full penalty of Bond No.
CA5853919 in the sum of $15,000 issued on behalf of cross-defendant, SUPERIOR
ROOF SOLUTIONS INC., a California corporation (hereinafter referred to as
“SUPERIOR ROOF”) in accordance with the terms and provisions of Section 7071.6
of the Business and Professions Code less those sums that the Court may award
MERCHANTS BONDING in reasonable attorney's fees and costs.
(2) Upon
the deposit of said funds, MERCHANTS BONDING be discharged from all liability
asserted against it with respect to said bond by the claimants designated
herein and by all other persons.
(3) Upon
deposit of said funds, all claimants designated herein, and all persons be
ordered to interplead their claims in this action; and be further restrained
from instituting or prosecuting in any other court, any proceedings affecting
the rights and obligations of MERCHANTS BONDING with respect to all claimants
under Bond No. CA5853919 issued on behalf of SUPERIOR ROOF.
(4) Any
legal actions pending against the proceeds of said bond on behalf of any claimant
referenced herein to be dismissed as to MERCHANTS BONDING.
(5) MERCHANTS
BONDING be awarded its reasonable attorney's fees and court costs in the sum of
$1,500 as allowance for its expenses incurred in this proceeding by the filing
of its Cross-Complaint in Interpleader and in preserving the penalty of said
bond for all claimants on an equal basis.
RULING: The unopposed motion is granted.
SUMMARY OF ACTION & PROCEDURAL HISTORY
Plaintiff J.B. Wholesale Roofing and Building Supplies,
Inc. (Plaintiff), a wholly owned subsidiary of SRS Distribution Inc., a
Delaware corporation, is in the business of selling, among other things,
roofing material, equipment, supplies and related goods for use in construction
and other applications (Materials). This
action arises from the furnishing of Materials to Defendant Superior Roof
Solutions Inc., a California corporation (Superior Roof) for use in its
business.
On or about 3/18/21, Plaintiff and Superior Roof executed
a written credit application and agreement (Credit Agreement) for the supply of
Materials. On the same date, Defendant
David Sager (Sager), the owner of Superior Roof, agreed in writing to
personally guarantee payment of all past, present, and future indebtedness of Superior
Roof to Plaintiff (the Guaranty) (Superior Roof and Sager may be collectively
referred to as Defendants).
Based on the Credit Agreement and Guaranty, Plaintiff
opened a credit account for
Superior Roof, pursuant to which Plaintiff supplied
Materials on credit for, among other things, use in Superior Roof’s business. The terms and conditions of the Credit
Agreement and Guaranty made in consideration of Plaintiff opening a credit
account for Superior Roof are applicable to the account opened under the Credit
Agreement. Said terms and conditions are
also contained in the written invoices used to confirm the purchases by Superior
Roof from Plaintiff. The terms and
conditions of the Credit Agreement, the Guaranty, and the confirming invoices
form the written contract by which Plaintiff supplied Materials to Superior
Roof (the Contract).
The Contract provided, in relevant part, that Plaintiff
would sell Materials to Superior Roof, and that Superior Roof would pay
Plaintiff for said Materials by the 25th day of the month from the date of
invoice. Pursuant to the Contract, Plaintiff provided Materials to Superior
Roof at the request of Superior Roof. Each
shipment of Materials to Superior Roof was confirmed by an invoice sent to Superior
Roof.
After having been served with the summons and complaint,
Superior Roof and Sager failed to file responsive pleadings. As a result, default was entered against these
Defendants on 2/9/23.
On 5/8/23, Plaintiff filed and served a motion which sought
an order severing Superior Roof and Sager from this action and entering
judgment by default against Superior Roof on the 1st, 2nd,
3rd, 4th and 6th causes of action in
Plaintiff’s complaint, and against Sager on the 5th cause of action in
Plaintiff’s complaint in the amount of $32,533.46 which includes interest,
attorneys’ fees and costs, as recoverable under the Contract and applicable
law. On 5/8/23, Plaintiff also dismissed
Does 1-20. Upon the granting of the
motion to sever, Plaintiff indicated that it would proceed to prosecute the
remaining license bond claim against Merchants and Does 21-30, inclusive.
On 6/8/23, Merchants filed and served the instant motion
seeking an order of deposit, restraining order, interpleader and attorney’s
fees. Specifically, Merchants seeks an
order that:
(1) Merchants
deposit with the Court the full penalty of Bond No. CA5853919 in the sum of
$15,000 issued on behalf of cross-defendant, Superior Roof in accordance with
the terms and provisions of Business & Professions Code 7071.6 less those
sums that the Court may award Merchants in reasonable attorney's fees and
costs.
(2) Upon the
deposit of said funds, Merchants be discharged from all liability asserted
against it with respect to said bond by the claimants designated herein and by
all other persons.
(3) Upon deposit
of said funds, all claimants designated herein, and all persons be ordered to
interplead their claims in this action; and be further restrained from
instituting or prosecuting in any other court, any proceedings affecting the
rights and obligations of Merchants with respect to all claimants under Bond
No. CA5853919 issued on behalf of Superior Roof.
(4) Any legal
actions pending against the proceeds of said bond on behalf of any claimant
referenced herein to be dismissed as to Merchants.
(5) Merchants be
awarded its reasonable attorney's fees and court costs in the sum of $1,500 as
allowance for its expenses incurred in this proceeding by the filing of its
Cross-Complaint in Interpleader and in preserving the penalty of said bond for
all claimants on an equal basis.
On 8/16/23, the Court granted Plaintiff’s unopposed
motion to sever.
No opposition or other response to the instant motion has
been filed.
ANALYSIS
The Contractor’s License Bond which is the subject of
this motion provides that the total liability of the Surety herein shall not
exceed the sum of $15,000 for non-homeowner claimants pursuant to Business and
Professions Code Section 7071.6(b).
An action in interpleader has traditionally been the
appropriate method of resolution in instances, such as this, where multiple
claims exceed the sum statutorily available to the various claimants. See CCP 386(b); (Sosa Decl.).
Where a party is a mere stakeholder, like Merchants,
without any interests in the proceeds of the res, that party may be discharged
from liability pursuant to CCP 386.5. (See
Sosa Decl.). Upon deposit of the stake
with the Court, the interpleading party, should receive a restraining order to
prevent needless future costs and harassment.
See CCP 386(f).
Additionally, a surety on a statutory bond, such as
Merchants, is entitled to its reasonable attorney's fees incurred to implement
the remedy of interpleader, to preserve the bond penalty and to join all
claimants in the same forum. See
CCP 386.6. Here, Merchants is entitled
to a statutory allowance in the sum of $1,500 to pay expenses incurred solely in
pursuit of the stakeholder’s remedy. CCP
386, et seq.
CONCLUSION
The motion is granted.