Judge: Michael J. Strickroth, Case: 2022-01255653, Date: 2023-06-12 Tentative Ruling

Demurrer to Amended Complaint

Defendants Platinum Properties Investor Network, Inc. and Platinum Properties Investor Network, LLC’s (Defendants) Demurrer to the First Amended Complaint (Demurrer) is OVERRULED.

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice.  Code of Civil Procedure § 430.30, subd. (a); Blank v. Kirwan (1985) 39 Cal.3d 311, 318.  Additionally, a defendant may demur on the grounds the pleading is uncertain. Code Civ. Proc., § 430.30, subd. (f). The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.”  Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.  The court “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . .”  Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.  “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.”  Code Civ. Proc., § 452; Stevens v. Superior Court. (1999) 75 Cal.App.4th 594, 601.  “When a court evaluates a complaint, the plaintiff is entitled to reasonable inferences from the facts pled.”  Duval v. Board of Trustees (2001) 93 Cal.App.4th 902, 906. 

“Generally it is an abuse of discretion to sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment.”  Goodman v. Kennedy (1976) 18 Cal.3d 335, 349. 

Defendants demur to the FAC on the following grounds: (1) Plaintiff does not allege facts to establish that it faces a reasonable probability of double vexation, or a valid threat of double vexation with respect to the same debt, claim, or duty, and (2) Plaintiff lacks standing as an interpleading plaintiff since it does not have possession of the disputed funds and is not legally disinterested, (3) Plaintiff may not sue in interpleader as it is a necessary party. (Motion, 3:2-10.)

1.    Double Vexation

“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..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, 607-608.

On 9-1-22, the Honorable Melissa McCormick sustained Defendants’ Demurrer to Complaint with leave to amend because “Plaintiff’s barebones complaint does not allege sufficient facts from which the court can conclude plaintiff faces a reasonable probability of double vexation by defendants.”

In Opposition, Plaintiff contends the FAC sufficiently pleads a threat of double vexation at paragraphs 9 and 14. (opposition, 3:2-4:17.)

Here, liberally construing the FAC, the FAC at paragraph 9 and 14 does allege Plaintiff faces a threat of double vexation because it alleges the funds at issue are the subject of at least Mr. Hartman’s claim and the claims in the First Amended Cross-Complaint.

Therefore, the Court does not sustain the demurrer on this basis.

2.    Disinterested Party

“The purpose of a proceeding in interpleader is twofold. First, to determine the liability of the person in possession of the fund or property which is the subject of the contest. If it be determined that he is a mere stakeholder and has no interest in the property involved, and has not incurred any independent liability to either or any of the other parties to the action he is discharged as a party to the action by depositing the fund or other property in court. After this has been done the then remaining parties to the action litigate among themselves as to their respective claims to the fund or property which has been deposited in court “ Hellman Commercial Trust & Savings Bank v. Alden (1929) 206 Cal.592, 600.

Defendants contend Plaintiff is not disinterested because it is about to be found liable for negligence to Platinum, LLC for taking its money without consent. (Motion, 9:13-10:25.) The Opposition contends Plaintiff is disinterested because it deposited the funds in dispute with the Court. (Opposition, 2.)

Here, paragraph 8 of the FAC alleges Plaintiff deposited the funds with the Court. Further, Exhibit A is a copy of the Court’s receipt of said funds.

Therefore, liberally construing the allegations of the FAC, the Court finds the FAC sufficiently alleges Plaintiff is a disinterested party. Thus, the Court does not sustain the demurrer on this basis.

3.    Necessary Party

Defendants contend that regardless of the above, Plaintiff is not a proper interpleader Plaintiff because both Platinum LLC and ROI have or may have claims against Plaintiff for mishandling the funds at issue. (Motion, 10:27-11:14.)

Defendants’ argument about necessary party appears to miss the mark. An interpleader action only requires that Plaintiff allege the following: (1) Plaintiff is a disinterested stakeholder, (2) Plaintiff has alleged a threat of double vexation. As discussed above, the FAC sufficiently alleges both of these factors.

Therefore, the Court does not sustain the demurer based on the necessary party argument.

Having rejected each of the demurrer’s arguments, Defendants’ Demurrer is OVERRULED. Defendants are to file an answer within 15 days of the notice of this ruling.

Plaintiff is to give notice.

Motion to Quash Service of Summons

On the Court’s own motion, the hearing on this motion is continued to 6/26/2023 at 1:45 PM in C15.

Clerk to give notice.