Judge Stephen P. Pfahler, Case Number: 23STCV16420, Date: 2024-03-20 Tentative Ruling

Judge: Stephen P. Pfahler, Case: 23STCV16420, Date: 2024-03-20 Tentative Ruling

Case Number: 23STCV16420 Hearing Date: March 20, 2024 Dept: 68

Dept. 68

Date: 3-20-24

Case #23STCV16420

STAKEHOLDER DEPOSIT

MOVING PARTY: Defendant, Registrar of Contractors

RESPONDING PARTY: Unopposed/Plaintiff, Danco Enterprises, Inc.

RELIEF REQUESTED

Motion for Stakeholder Deposit and Discharge of Stakeholder

SUMMARY OF ACTION

On October 8, 2019, plaintiff Danco Enterprises, Inc. entered into a contract with defendant Sunvalley Solar Tech, Inc. for the installation of a solar panel electrical system. The total contract price was $161,000, whereby the parties agreed to a down payment of $18,000, with eight (8) monthly installments of $17,875. Danco made the $18,000 down payment and six (6) installment payments. No work commenced, due to represented delays in obtaining the permit for Riverside County, but the panels were ordered and the inverter received. No actual installation commenced.

On July 13, 2023, Plaintiff filed a complaint for Fraud, Negligent Misrepresentation, Unjust Enrichment, Violation of Business and Professions Code section 17200, Civil Conspiracy, and Claim Against Contractor’s License Bond. On December 5, 2023, Plaintiff filed a first amended complaint adding an additional cause of action for Claim Against Disciplinary Bond/Cash Deposit. On January 30, 2024, Plaintiff dismissed defendant Zhijian Zhang without prejudice.

On April 28, and July 13, 2022, Western Surety Company substituted in J.H. Bryant Jr., Inc. and The Pegasus School for Roes 6 and 7. Western Surety Company dismissed J.H. Bryant Jr., Inc. on May 5, 2022.50

RULING: Granted.

Defendant Registrar of Contractors, Contractors State License Board (CSLB) moves for leave to deposit the $27,500 contractors cash deposit with the court, and discharge from the action. The motion is unopposed.

Code of Civil Procedure section 386 states in relevant part:

A defendant, against whom an action is pending upon a contract, or for specific personal property, may, at any time before answer, upon affidavit that a person not a party to the action makes against him, and without any collusion with him, a demand upon such contract, or for such property, upon notice to such person and the adverse party, apply to the court for an order to substitute such person in his place, and discharge him from liability to either party, on his depositing in court the amount claimed on the contract, or delivering the property or its value to such person as the court may direct; ¿and the court may, in its discretion, make the order; ¿or such defendant may file a verified cross-complaint in interpleader, admitting that he has no interest in such amount or such property claimed, or in a portion of such amount or such property and alleging that all or such portion of the amount or property is demanded by parties to such action or cross-action and apply to the court upon notice to such parties for an order to deliver such property or portion thereof or its value to such person as the court shall direct. And whenever conflicting claims are or may be made upon a person for or relating to personal property, or the performance of an obligation, or any portion thereof, such person may bring an action against the conflicting claimants to compel them to interplead and litigate their several claims. The order of substitution may be made and the action of interpleader may be maintained, and the applicant or interpleading party be discharged from liability to all or any of the conflicting claimants, although their titles or claims have not a common origin, or are not identical but are adverse to and independent of one another.

(Code Civ. Proc., § 386, subd. (a).)

A defendant who holds property to which a person or various persons re assert claims, and where the defendant holds no interest other than as stakeholder, the defendant may bring a motion under Code of Civil Procedure section 386. (Cantu v. Resolution Trust Corp. (1992) 4 Cal. App. 4th 857, 875.) The moving party only need “file a disclaimer relinquishing any purported claim to the stake.” (Ibid.) “Once the [party] admits liability and deposits the money with the court, [the party] is discharged from liability and freed from the obligation of participating in the litigation between the claimants.” (City of Morgan Hill v. Brown (1999) 71 Cal.App.4th 1114, 1122.)

Sunvalley Solar Tech, Inc. (Sunvalley) provided two cash deposits with the CSLB for a total of $27,500 ($15,000 and $12,500), pursuant to Business and Professions Code section 7071.6. [Amended Declaration of Stephen Sventich.] The bond exists for the benefit of persons harmed by a contractor’s actions. The contractors license of Sunvalley was cancelled on May 31, 2023.

CSLB moves for a court order in order to allow disbursement instead of waiting for the statutory expiration period. (Bus. & Prof. Code, § 7071.4; Code Civ. Proc., §§ 995.360, § 995.770.) The court finds no other basis of liability against CSLB, and therefore grants the motion for deposit and discharge of all liability claims on the bond. (Code Civ. Proc., § 386, subd. (b).) Dismissal effective upon deposit of the funds with the court. (Code Civ. Proc., § 386.5.)

Defendant CSLB to give notice.