Judge Michael P. Linfield, Case 22STCV06433 2022-08-12 Tentative Ruling

Judge: Michael P. Linfield, Case: 22STCV06433, Date: 2022-08-12 Tentative Ruling

Case Number: 22STCV06433 Hearing Date: August 12, 2022 Dept: 34

SUBJECT: Motion for Discharge of Stakeholder and Request for Litigation Costs in the Amount of $916.81 Costs Pursuant to Code of Civil Procedure § 386.6

Moving Party: Plaintiff Valentine Law Group, APC

Resp. Party: None

The Court, pursuant to CCP § 386.6, DISCHARGES Plaintiff Valentine Law Group, APC from the instant action and GRANTS Plaintiff Valentine Law Group, APC court costs in the amount of $916.81 from the interpleaded funds.

I. BACKGROUND

On February 22, 2022, Plaintiff Valentine Law Group, APC filed a complaint in interpleader against Defendants Jacqueline Corona-Ahrens, Lidia Corona, and Luis Corona.

On March 10, 2022, Plaintiff Valentine Law Group, APC filed its Notice of Lodgment of Interpleader Check with Clerk of Court. Plaintiff “tendered the disputed settlement funds at issue in this interpleader action to the Los Angeles Superior Court for deposit in the Court’s Trust Account. The check being lodged is drawn on the trust account of Valentine Law Group, APC – Client Trust Account. The check number is 2526, and the check is in the amount of $380,684.70.” (Notice of Lodgment, p. 1:20-23.)

On July 8, 2022, Plaintiff Valentine Law Group, APC moved the Court for an order that:

1. Pursuant to Plaintiff’s “Notice of Lodgment of Interpleader Check With Clerk of Court,” filed March 10, 2022 (a courtesy copy of which is attached to the Declaration of Travis K. Siegel as Exhibit “B”), that VALENTINE LAW GROUP be discharged from all liability asserted against it with respect to the interpleaded funds by Defendants herein and by all other persons; and

2. VALENTINE LAW GROUP be awarded its court costs in the sum of $916.81 as allowance for its expenses incurred in this proceeding by the filing of its Complaint in Interpleader and all related filings, research, postage, copies, etc. A full accounting of the court costs are set forth in the Declaration of Travis K. Siegel, attached hereto, and Exhibit “F.” (Motion, p. 2:1-8.)

On August 3, 2022, Plaintiff Valentine Law Group, APC filed a Notice of Non-Receipt of Opposition to Plaintiff’s Motion for Discharge of Stakeholder and Request for Litigation Costs in the Amount of $916.81 Pursuant to Code of Civil Procedure § 386.6.

II. ANALYSIS

A. Legal Standard

(a) 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.

(b) A party shall not be denied the attorney fees authorized by subdivision (a) for the reason that he is himself an attorney, appeared in pro se, and performed his own legal services. (CCP § 386.6.)

Interpleader is a procedure whereby a person holding money or personal property to which conflicting claims are being made by others, can join the adverse claimants and force them to litigate their claims among themselves. (For example, an escrow holder who receives conflicting demands from the parties to the escrow regarding the funds or documents he or she holds.) (Hancock Oil Co. v. Hopkins (1944) 24 C2d 497, 508; 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 a 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 v. Brown, 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.)

If the defendant stakeholder claims no interest in the funds or property held, he or she need not file an interpleader cross-complaint. He or she may simply apply to the court for permission to deposit the money or property with the court clerk, and for an order discharging him or her from further liability to the adverse claimants. Such order will also substitute the adverse claimants as parties to the action; or, if only money is involved, simply dismiss the stakeholder. (CCP §§ 386, subd. (a), 386.5.) The motion must be supported by an affidavit by the stakeholder establishing the ground for interpleader. (CCP § 386, Subd. (a).) The supporting affidavit must also state that the moving party 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…” (CCP § 386.5.) Notice of the motion must be served on each of the adverse claimants to the funds or property. (CCP §§ 386, subd. (a), 386.5.) “Where a deposit has been made pursuant to Section 386, the court shall, upon the application of any party to the action, order such deposit to be invested in an insured interest-bearing account.” (CCP § 386.1.)

The stakeholder may seek reimbursement for its costs and reasonable attorneys’ fees incurred. (UAPColumbus 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. (CCP § 386.6.)

B. Discussion

The Court finds that Plaintiff lodged an interpleader check with the Court in the amount of $380,684.70 with the Court on March 10, 2022. (Notice of Lodgment, filed March 10, 2022.) This amount constitutes the net proceeds of settlement in the action entitled MANUEL CORONA, by and through his Successor in Interest, Jacqueline Corona-Ahrens, et al. v. MAYWOOD SKILLED NURSING & WELLNESS CENTRE, LLC, et al., Superior Court Case Number 19-NW-CV00297 (referred to hereinafter as the “Action”), originally filed April 8, 2019. (Siegel Decl., ¶ 2.) While there has been no dispute as to the amount to interplead to the Court, Plaintiff has learned of a dispute on the allocation of the net settlement proceeds between Defendants Jacqueline Corona-Ahrens, Lidia Corona, and Luis Corona. (Siegel Decl., ¶ 7.)

Plaintiff, in light of this conflict, “has been unable to disburse the settlement funds without an allocation from the Court or a stipulation of the parties on the proper apportionment of the settlement funds among all of the Defendants/Claimants”, and notes that it has no other choice but to withdraw as counsel from the Action. Siegel Decl., ¶ 8.) Defendants Jacqueline Corona-Ahrens, Lidia Corona, and Luis Corona have all been served and appeared in the instant matter. (Siegel Decl., ¶ 11, Exs. C-E.)

Plaintiff does not seek attorney’s fees in relation to the instant action but does seek court costs in the amount of $916.81 from the interpleaded funds. (Siegel Decl., ¶ 12, Ex. F.) Plaintiff takes the position that “it does not know and cannot determine the respective merits of the claims of Defendants herein to the interpleaded funds which are conflicting and further, has no safe, expedient, or economical remedy other than this proceeding in interpleader. VALENTINE LAW GROUP has no interest in the interpleaded funds which are the subject of this proceeding in interpleader.” (Siegel Decl., ¶ 15.)

III. CONCLUSION