Judge: Theresa M. Traber, Case: 23STCV08250, Date: 2024-03-26 Tentative Ruling

Case Number: 23STCV08250    Hearing Date: March 26, 2024    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     March 26, 2024                      TRIAL DATE: NOT SET

CASE:                         Nancy Goulston v. California TD Specialists

CASE NO.:                 23STCV08250           

MOTION FOR LEAVE TO FILE CROSS-COMPLAINT IN INTERPLEADER

MOVING PARTY:               Defendant California TD Specialists

RESPONDING PARTY(S): Plaintiff Nancy Goulston

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This is an action for violation of Civil Code section 2924j that was filed on April 13, 2023. Plaintiff alleges that Defendant failed to properly disburse the proceeds from a Trustee’s Sale.

Defendant moves for leave to file a cross-complaint in interpleader.

TENTATIVE RULING:

Defendant’s Motion for Leave to File Cross-Complaint in Interpleader is GRANTED.

            Defendant is ordered to file a clean, stand-alone copy of the proposed cross-complaint and deposit the disputed funds with the Court within 10 days of this order.

DISCUSSION:

Defendant moves for leave to file a cross-complaint in interpleader.

            “Any 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.” (Code Civ. Proc., § 386(b).) “When a person may be subject to conflicting claims for money or property, the person may bring an interpleader action to compel the claimants to litigate their claims among themselves. (Id.) Once the person admits liability and deposits the money with the court, he or she is discharged from liability and freed from the obligation of participating in the litigation between the claimants. [Citations.] The purpose of interpleader is to prevent a multiplicity of suits and double vexation. [Citation.]” (City of Morgan Hill v. Brown (1999) 71 Cal.App.4th 1114, 1122.)

“In an interpleader action, the court initially determines the right of the plaintiff to interplead the funds; if that right is sustained, an interlocutory decree is entered which requires the defendants to interplead and litigate their claims to the funds. Upon an admission of liability and deposit of monies with the court, the plaintiff may then be discharged from liability and dismissed from the interpleader action. [Citations.] The effect of such an order is to preserve the fund, discharge the stakeholder from further liability, and to keep the fund in the court's custody until the rights of potential claimants of the monies can be adjudicated. [Citations.] Thus, the interpleader proceeding is traditionally viewed as two lawsuits in one. The first dispute is between the stakeholder and the claimants to determine the right to interplead the funds. The second dispute to be resolved is who is to receive the interpleaded funds. [Citations.]” (Dial 800 v. Fesbinder (2004) 118 Cal.App.4th 32, 42–43.)

Defendant contends that it conducted a foreclosure on a parcel of real property at 746 Rosencrans Ave, Manhattan Beach, CA 90266. (Declaration of Kelsey Luu ISO Mot. ¶ 3.) Defendant states that, aside from Plaintiff, three other entities named as cross-defendants in the proposed cross-complaint assert claims to the surplus funds from the foreclosure sale. (Id. ¶¶ 5-8.) Defendant states that it has no personal claim to the funds. (¶ 9.) Defendant therefore seeks to deposit the disputed funds with the Court and file a cross-complaint in interpleader pursuant to Civil Code section 2924j, subdivision (b).

            Plaintiff contends that the other liens identified by Defendant are invalid because the judgment which is identified as their basis does not reference the property that is the subject of this action. Plaintiff therefore argues that leave to file a cross-complaint should be denied under Placer Foreclosure, Inc. v. Aflalo (2018) 23 Cal.App.5th 1109, 1113. The validity of these liens is the central question of a complaint-in-interpleader. Such questions therefore go directly to the merits of the complaint and are more properly resolved in a motion challenging the merits, just as in Placer. (Id.) The Court therefore declines to address these arguments in the context of this motion. The Court is similarly disinclined to order an evidentiary hearing before permitting Defendant to file the cross-complaint in interpleader, as any challenge to Defendant’s right to interplead may be heard through a regularly noticed motion on the merits.

CONCLUSION:

            Accordingly, Defendant’s Motion for Leave to File Cross-Complaint in Interpleader is GRANTED.

            Defendant is ordered to file a clean, standalone copy of the proposed cross-complaint and deposit the disputed funds with the Court within 10 days of this order.

            Moving Party to give notice.

IT IS SO ORDERED.

Dated:  March 26, 2024                                  ___________________________________

                                                                                    Theresa M. Traber

                                                                                    Judge of the Superior Court

            Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.