Judge: Thomas Falls, Case: 22PSCV00609, Date: 2023-01-09 Tentative Ruling

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Case Number: 22PSCV00609    Hearing Date: January 9, 2023    Dept: O

MARTY CLAYTON LEWIS vs MARK THOMAS DUBOISE, et al. (22PSCV00609)

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Plaintiff Marty Clayton Lewis’s MOTION FOR ORDER FOR DISCHARGE AND AWARD OF ATTORNEY FEES AND COSTS

            Responding Party: Defendants Mark Thomas Duboise, individually, and as Trustee of the Thomas E. Duboise Trust dated February 24, 2013, and Linda Jean Duboise

Tentative Ruling

Plaintiff Marty Clayton Lewis’s MOTION FOR ORDER FOR DISCHARGE AND AWARD OF ATTORNEY FEES AND COSTS is DENIED because the interpleader is improperly pleaded.

Background

Plaintiff Marty Clayton Lewis (“Plaintiff”) alleges the following against Defendants MARK THOMAS DUBOISE (“Mark”), Individually and as TRUSTEE OF THE THOMAS E. DUBOISE TRUST DATED FEBRUARY 24, 2013; LINDA JEAN DUBOISE (“Linda”) (collectively, “Defendants”): Plaintiff alleges that he was a property manager for two of Defendants’ properties (Newlin and White Cloud) wherein his reimbursement would be 10% commission to be paid each month from the rental income. Plaintiff has already deducted his lawful commission for managing the properties such that he has no further claim to the remaining rental funds which $76,136.69.

On June 21, 2022, Plaintiff filed a VERIFIED COMPLAINT FOR INTERPLEADER UNDER CODE OF CIVIL PROCEDURE SECTION 386, which includes the request for an order “allowing for the deposit of the funds with the clerk of the court in an interest-bearing account pursuant to Code of Civil Procedure section 386.1” and “for an order of discharge from liability to all other parties to this action pursuant to 18 Code of Civil Procedure section 386.5.”[1]

On July 27, 2022, the court granted Plaintiff’s ex-parte Order for Deposit.

On August 4, 2022, Defendant Linda filed her Verified Answer. That same day, Defendant Mark also filed his Verified Answer and a Cross-Complaint against Plaintiff for:

1)      Breach Of Fiduciary Duty

2)      Conversion

3)      Breach Of Contract

4)      Negligence

5)      Violation Of Business And Professions Code 10145 Et. Seq.

6)      Violation Of Business And Professions Code 10148 Et. Seq.

7)      Declaratory Relief

8)      Accounting

9)      Constructive Trust.

On September 8, 2022, Defendant Mark filed a Request for Dismissal of his Cross-Complaint.

On November 16, 2022, Defendant Mark filed the instant MOTION AND MOTION FOR LEAVE TO FILE FIRST AMENDED ANSWERS, which was granted on December 21, 2022.

On December 6, 2022, a notice of related case was filed.[2]

On December 9, 2022, Plaintiff filed the instant MOTION FOR ORDER FOR DISCHARGE AND AWARD OF ATTORNEY FEES AND COSTS.

Legal Standard

Plaintiff makes the instant motion pursuant to Code of Civil Procedure sections 386 and 386.6. (Motion p. 3.)

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.  

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.) 

The motion must be supported by an affidavit by the stakeholder establishing the ground for interpleader. (Code Civ. Proc., § 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…” (Code Civ. Proc., § 386.5.) Notice of the motion must be served on each of the adverse claimants to the funds or property. (Code Civ. Proc., §§ 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.” (Code Civ. Proc., § 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. (Code Civ. Proc., § 386.6.) 

Discussion

The threshold issue is whether Plaintiff has established his right to interplead.

When bringing an action in interpleader, a plaintiff must show that (1) the accused parties to be called in make claims on him for the same thing, (2) that the respective claims are adverse to each other, and (3) that the plaintiff cannot safely determine for himself which claim is right and lawful. (Opp. p. 5, citing to Fidelity Sav. & L. Ass’n v. Rodgers (1919) 180 Cal. 683, 684-685.)

Here, a review of the complaint provides the pertinent allegations:

Plaintiff alleges that in March of 2022, he was contacted by defendant Linda Jeanne Duboise regarding the subject properties and the rental income therefrom. Plaintiff alleges that in May of 2022, he was contacted by Mark Thomas Duboise regarding the subject properties and the rental income therefrom.

(Complaint ¶¶17, 18) (emphasis added).

Effectively, Plaintiff is asserting that there are adverse claims regarding the funds derived from the Properties because two people (Mark and Linda) “contacted” him “regarding” the funds. However, such an allegation falls wholly short of the requirement for an interpleader action.

As argued by Defendants, “[a] mere contact from two parties regarding the Properties and rental income do not amount to claims, let alone adverse claims. Both Linda and Mark wanted to know where the money owed to the Trust had vanished to.” (Opp. pp. 6-7.) In fact, according to Linda’s declaration, she “never made a demand for funds from the Plaintiff upon finding out the net rental income was missing.” (Linda Duboise Decl., ¶7; see also Mark Duboise Decl., ¶15 [“No demands for funds from the Plaintiff were made by me personally. The instruction to Plaintiff to pay the beneficiary directly was solely made by me in my capacity as the Trustee of the Thomas E. Duboise Trust dated February 24, 2013.”].)

Additionally, there is no conflict as to who is legally entitled to the funds: all net rental income from the Properties and any legal claims thereon belonged to the Trust such that all net rental income was to be distributed solely to the beneficiary Linda Jeanne Duboise according to the Trust. (Opp. p. 7, see also Mark Duboise Decl., ¶¶16, 17 [“In my individual capacity or as Trustee of the Trust, I have never had a dispute with my mother Linda Jeanne Duboise, regarding the ownership of income from the Properties. To be clear, I am not involved in this matter in my individual capacity. I have been solely acting as the trustee of the Trust. Based on the foregoing, it is clear that there is only one party, entitled to file or legally respond to a claim and that is the Trust.”]) (emphasis added).

To the extent that Plaintiff seeks to establish an interpleader action based upon the allegation that Linda may claim an interest in the funds which form the basis for this action, mere suspicion of double vexation absent a showing of reasonably probability of double vexation does not suffice to bring an interpleader claim. (Opp. p. 7, citing to Westamerica Bank v. City of Berkeley (2011) 201 Cal. App. 4th 598, 607-608 [“An interpleader action, however, may not be maintained ‘upon the mere pretext or suspicion of double vexation; [the plaintiff] must allege facts showing a reasonable probability of double vexation[,]’ [citation] or a ‘valid threat of double vexation.’” [citation].”].) Accordingly, as Plaintiff has not alleged facts that Mark and Linda both are claiming interest in the funds, Plaintiff has not alleged a valid threat of double vexation. 

Therefore, as Plaintiff has failed to allege that the accused parties (Mark and Linda) are making claims on Plaintiff for the same thing (property funds), then Plaintiff has failed to properly plead an interpleader action.

Conclusion

Based on the foregoing—notably that the absence of a dispute as to who is legally entitled to the funds precludes an interpleader action (an action which is required for the instant relief sought)—the court DENIES the motion.