Judge: Michael E. Whitaker, Case: 23SMCV04856, Date: 2025-05-28 Tentative Ruling

Case Number: 23SMCV04856    Hearing Date: May 28, 2025    Dept: 207

TENTATIVE RULING

MOTION

This case arises from allegations that the installation of solar panels caused roof leaks. 

Plaintiffs Daniel Eisenberg and Martha Bailey (“Plaintiffs”) originally filed suit on October 16, 2025.  The operative Second Amended Complaint (“SAC”) alleges five causes of action for (1) breach of express warranty; (2) negligence; (3) breach of contract; (4) fraud; and (5) breach of contract against surety against Defendants LA Solar Group, Inc., dba AP Electrical System (“LA Solar”); Ara Petrosyan (“Petrosyan”); and Merchants Bonding Company (Mutual) (“Merchants”).  The first four causes of action are brought against all Defendants except Merchants, and the fifth cause of action is brought only against Merchants.

On September 13, 2024, Plaintiffs filed amendments naming Platt River Insurance Company and The North River Insurance Company as Doe defendants 1 and 2, respectively.  Subsequently, Plaintiffs have voluntarily dismissed both Doe defendants. 

Merchants now moves for an order discharging it as stakeholder.  Merchants’ motion is unopposed.

ANALYSIS

Code of Civil Procedure section 386.5 provides:

Where the only relief sought against one of the defendants is the payment of a stated amount of money alleged to be wrongfully withheld, such defendant may, upon affidavit that he is a mere stakeholder with no interest in the amount or any portion thereof and that conflicting demands have been made upon him for the amount by parties to the action, upon notice to such parties, apply to the court for an order discharging him from liability and dismissing him from the action on his depositing with the clerk of the court the amount in dispute and the court may, in its discretion, make such order.

            Code of Civil Procedure section 386.6 provides:

A party to an action who follows the procedure set forth in Section 386 or 386.5 may insert in his motion, petition, complaint, or cross complaint a request for allowance of his costs and reasonable attorney fees incurred in such action. In ordering the discharge of such party, the court may, in its discretion, award such party his costs and reasonable attorney fees from the amount in dispute which has been deposited with the court. At the time of final judgment in the action the court may make such further provision for assumption of such costs and attorney fees by one or more of the adverse claimants as may appear proper.

            Code of Civil Procedure section 386, subd. (f) provides:

After any such complaint or cross-complaint in interpleader has been filed, the court in which it is filed may enter its 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.

            In support of the application, Merchants provides the Declaration of Gabriella B. Edelman, which provides:

2. The subject matter of this Motion is a $25,000.00 Contractor’s State License Bond No. 100039799 (the “Bond”) issued to AP ELECTRICAL dba LA SOLAR GROUP, INC. (“LA SOLAR” or “Principal”).  The Bond was issued pursuant to the Business and Professions Code, Section 7071.6 and is in the penal sum of $25,000.00.  Attached hereto as Exhibit “A” is a true and correct copy of the Bond.

3. In the instant case, the action was commenced by Plaintiff/Cross-Defendant on November 8, 2023.  On or about June 6, 2024, MERCHANTS filed a Cross-Complaint for Interpleader and Declaratory Relief.  At this time Declarant sets forth the conflicting claims in relation to the Bond:

A. DANIEL EISENBERG & MARTHA BAILEY, individuals residing in the County of Los Angeles, State of California, have asserted a claim for recovery from the Bond issued to LA SOLAR, by way of this instant Action. 

B. DANIEL LOETHER, an individual residing in the County of Los Angeles, State of California, has asserted a claim for recovery from the Bond issued to LA SOLAR.

C. LI FAN, an individual residing in the County of Madera, State of California, has asserted a claim for recovery from the Bond issued to LA SOLAR.

D. AP ELECTRICAL dba LA SOLAR GROUP, INC., a California company doing business in the County of Los Angeles, State of California, has denied payment from the Bond by way of its General Denial filed on January 06, 2025

4. As the bond principal, LA SOLAR, is ultimately responsible to MERCHANTS for all losses sustained under its Bond, including all costs and expenses incurred, in accordance with the provisions of Civil Code § 2847 and case law construing the same.

5.  MERCHANTS has expended attorney's fees and costs in protecting the penal sum of the Bond and in interpleading this matter, communicating with claimants, and following procedures outlined by Code of Civil Procedure § 386. The total amount of attorney's fees and costs incurred on this matter is $11,667.11.  Attached hereto as Exhibit "B" is a true and correct copy of the billing statements of Declarant's law firm which have been submitted to MERCHANTS setting forth all billings to date. Detailed line-item billing can be made available to this Court for an in-camera review upon request.  In the interests of fairness we are only requesting $5,000 from the Court to cover attorney’s fees and costs incurred in this matter.  OF the $5,000.00 requested, $747.11 is comprised of filing fees and court costs. 

6. MERCHANTS does not know and cannot determine the respective merits of the claims against the subject bond as well as the defenses against those claims. Further, MERCHANTS has no safe, expedient or economical remedy other than this proceeding in Interpleader. Except as set forth herein and as further directed by this Court, MERCHANTS has no interest in the proceeds of Bond No. 100039799, and is a mere stakeholder with respect thereto, pursuant to § 386.5.

7. A permanent restraining order of further litigation relating to this bond is necessarily required to protect MERCHANTS from further expense and potential harassment.

(Edelman Decl. ¶¶ 2-7.)

            Therefore, the Edelman declaration demonstrates that Merchants is a mere stakeholder, as holder of the bond, with no interest in any amount thereof, and no party has opposed the motion.  Further, Merchants has substantiated the requested attorneys’ fees.   

CONCLUSION AND ORDER

Therefore, the Court grants Merchants’ unopposed motion in its entirety, and permits   Merchants to deduct the requested $5,000 in attorneys’ fees from the $25,000 bond.  Upon Merchants depositing the remainder of the $25,000 bond ($20,000) with the Clerk of the Court, the Court will discharge and dismiss Merchants from the operative complaint.    

Further, Merchants shall file and serve a proposed Order in conformity with the Court’s ruling on or before June 4, 2025. 

Merchants shall provide notice of the Court’s ruling and file the notice with a proof of service forthwith.   

DATED:  May 28, 2025                                                         ___________________________

                                                                                          Michael E. Whitaker

                                                                                          Judge of the Superior Court