Judge Ronald F. Frank, Case Number: YC072873, Date: 2024-11-08 Tentative Ruling

Judge: Ronald F. Frank, Case: YC072873, Date: 2024-11-08 Tentative Ruling

Case Number: YC072873 Hearing Date: November 8, 2024 Dept: 8

Tentative Ruling¿

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HEARING DATE: November 8, 2024

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CASE NUMBER: YC072873

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CASE NAME: Anna Mezheritsky v. Dorothy Kovich, et al.

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MOVING PARTY: (1) Defendants, Dorothy Kovich Klein, Thomas Kovich, and Liberty Mutual Insurance

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RESPONDING PARTY: (1) Lien Holder, LaToya S. Redd, Esq.

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TRIAL DATE: None set.

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MOTION:¿ (1) Motion to File Interpleader of Funds, Discharge of Liability, and Recovery of Attorneys’ Fees and Costs

Tentative Rulings: (1) GRANTED

I. BACKGROUND¿¿

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A. Factual¿¿

On May 10, 2018, Plaintiff, Anna Mezheritsky (“Plaintiffs”) filed this action against Defendants, Dorothy Kovich Klein, Thomas Klein, and DOES 1 through 50. This lawsuit alleging bodily injury and emotional distress damages arises from a long-term tenancy where Plaintiff rented an apartment in Hermosa Beach allegedly owned by Defendant Dorothy Kovitch Klein. The lawsuit was filed in May of 2018 and has been actively litigated in Inglewood since the case was reassigned to Judge Frank in February of 2022.

On May 6, 2024, Defendants, Dorothy Kovich Klein, Thomas Kovich, and Liberty Mutual Insurance filed this Motion for Leave to file Complaint-in-Intervention requesting this court to grant this Motion for Leave to Intervene and permit Liberty to file its Complaint-in-Intervention against Defendants-in-Intervention who are the lienholders of the settlement amount $200,000 that was granted on September 13, 2023. This court granted that motion on June 7, 2024.

Now, Petitioner/Proposed Plaintiff-in-Intervention, Liberty Mutual Insurance (“Liberty”), moves this court for an order granting interpleader of funds (specifically, the sum of $200,000, $198,500 of which will be contributed by Liberty and $1,500 of which will be paid from the client trust account of moving parties’ attorneys of record), dismissing moving party and defendants, Dorthy Kovich Klein and Thomas Klein from the above-captioned action, and discharging Liberty and the Klein defendants of all liability.

B. Procedural

On September 30, 2024, Defendants, Dorothy Kovich Klein, Thomas Kovich, and Liberty Mutual Insurance filed this Motion to File Interpleader of Funds, Discharge of Liability and Recovery of Attorneys’ Fees and Costs. Lien Holder, LaToya S. Redd dba Redd Law, filed an opposition brief. To date, no reply brief has been filed.

II. ANALYSIS¿

A. Legal Standard

Liberty moves under Code of Civil Procedure section 386 and 386.5. Pursuant to Code of Civil Procedure section 386, subdivision (b), “[a]ny person, firm, corporation, association, 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. The action of interpleader may be maintained although the claims have no common origin, are not identical but are averse to and independent of one another, or the claims are unliquidated and no liability on the part of the party bringing the action or filing the cross-complaint has arisen.” (Code Civ. Proc., § 386.) Further, Code of Civil Procedure section 386.5 provides that “[w]here 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 Civ. Proc., § 386.5.)

However, Lien Holder, LaToya S. Redd (“Redd”) argues in opposition that Code of Civil Procedure section 386 and 386.5 are improper in this case, and that the applicable code section is Code of Civil Procedure section 572. Pursuant to Section 572, “[w]hen it is admitted by the pleadings, or shown upon the examination of a party to the action, that he or she has in his or her possession, or under his or her control, any money or other thing capable of delivery, which, being the subject of litigation, is held by him or her as trustee for another party, or which belongs or which is due to another party or which should, under the circumstances of the case be held by the court pending final disposition of the action, the court may order the same, upon motion, to be deposited in court or delivered to such party, upon those conditions that may be just, subject to the further direction of the court.” (Code Civ. Proc., § 572.)

B. Discussion

i. Interpleader Determination

Preliminary, this motion follows on the heels of two different motions by Defendants, Dorothy Kovich Klein and Thomas Kovich to Motion to Enforce Settlement based on a signed mediation agreement. On July 14, 2023, the Court granted Klein’s motion to enforce the short-form mediation agreement signed by Plaintiff, seeking to end the litigation by payment of $200,000 as Ms. Mezheritsky agreed in writing at the mediation. Ms. Mezheritsky opposed the motion on a variety of grounds, including her assertion that the lawyer who represented her at the mediation lied to her about what the settlement provided for or did not provide for. Later, on January 12, 2024, this court denied a subsequent motion by Defendants, Dorothy Kovich Klein and Thomas Kovich’s Motion to Enforce Settlement, which sought an order requiring the $200,000 settlement amount to be paid in its entirety to Plaintiff, Anna Mezheritsky. The Court denied that motion, indicating its reasoning for the multiple payee requirement of its order granting the previous motion to enforce settlement. Those reasons included the likelihood of additional lawsuits by lienholders to enforce their lien rights against persons or parties including defense counsel who have knowledge of the liens but who filed to provide for satisfaction of those liens in the settlement.

On June 7, 2024, this court GRANTED Liberty’s Motion for Leave to File Complaint-in-Intervention. In its minute order, this court reasoned that it was inclined to grant the motion in order to allow the parties to posture the case for a hearing and submit admissible evidence bearing on the fact that Liberty had only previously submitted evidence of counsel’s declaration stating that “[t]he insurance carrier informed Mr. Feldman that his request cannot be fulfilled because the system does not allow a single check to be payable to 7 payees.” The court also encouraged the parties to consider whether interpleading the funds or depositing the funds with the court, with a mechanism for lien claims to be resolved, be negotiated among the lien claimants.

Per the court’s prior encouragement, Liberty now files this Motion to File Interpleader of Funds, Discharge of Liability, and Recovery of Attorneys’ Fees and Costs. As noted above, Liberty’s motion moves under Code of Civil Procedure section 386 and 386.5. Specifically, Liberty seeks relief under Section 386, subdivision (b). Although Section 386, subdivision (b) does not require the party seeking to interplead to be a defendant, the “person, firm, corporation, association or other entity” must either show first that: (1) double or multiple claims are made against it by two or more persons which are such that they may give rise to double or multiple liability; or (2) that double or multiple claims may be made against it by two or more persons which are such that they may give rise to double or multiple liability. If the proposed interpleader can show one of those requirements, “they may bring an action against the claimants to compel them to interplead and litigate their several claims.” (Code Civ. Proc., § 386, subd. (b).)

In the interpleader motion, Liberty asserts it fears that Anna Mezheritsky will not endorse the check herself and will not pay some or all of the lien holders. Liberty also states that one of the lien holders has already filed suit against Defendants Dorothy Kovich Klein and Thomas Kovich as well as their various attorneys and law firms. (Declaration of Brett G. Hampton (“Hampton Decl.”), ¶ 6.) In this case, there are six (6) other lien holders. (Hampton Decl., ¶ 3.) Thus, Dorothy Kovich Klein and Thomas Kovich may certainly may fall into the second a category of section 386, subdivision (b) – albeit, would have different requirements under the second paragraph of Section 386, subdivision (b) applicable to defendants, there is nothing in the moving papers to discuss that Liberty faces the threat of two or more persons or entities that may give rise to double or multiple liability. Would Liberty be subject to double or multiple liability if they have already paid their coverage limit? The court is uncertain. Again, the only evidence provided is the declaration from Liberty’s counsel. There, the “evidence” includes a statement declared by Liberty’s counsel “one of the lienholders [] has already filed suit against Defendants as well as their various attorneys and law firms.” (Hampton Decl., ¶ 6.) As such, based on the moving papers, Liberty has failed to carry its burden in showing how double or multiple claims may be made against Liberty. While the motion does not specifically assert that double or multiple claims would be made against the Kovich Defendants, not only their insurer, that assertion is implicit in the moving papers.

In opposition, Redd argues that Liberty has not brought an action against these potential “claimants” compelling them to interplead and litigate their several claims. Because of this, Redd argues Liberty’s failure to bring a complaint-in-interpleader as opposed to a complaint-in-intervention, like it did here, that this bars application of Code of Civil Procedure section 386 and 386.5.

The court disagrees with Redd’s opposition and grants the interpleader. This litigation must be brought to a close, the agreed settlement amount must be paid, and a mechanism for allocating the settlement amount among disputing claimants must be achieved. Whether that is done under Section 386 subdivision (b), 386.5. or 572 may the subject of future law and motion hearings, but the Court grants the interpleader.

III. CONCLUSION

For the foregoing reasons, Liberty’s Motion to File Interpleader of Funds, Discharge of Liability, and Recovery of Attorneys’ Fees and Costs is GRANTED.