Judge: Upinder S. Kalra, Case: 21STCP00818, Date: 2023-03-20 Tentative Ruling

Case Number: 21STCP00818     Hearing Date: March 20, 2023    Dept: 51

Tentative Ruling

Judge Upinder S. Kalra, Department 51

HEARING DATE:   March 20, 2023                                              

CASE NAME:            Beverly Law v. Key Health Medical Solutions, et al.

CASE NO.:                21STCP00818

PLAINTIFF IN INTERPLEADER’S MOTION TO BE DISCHARGED

MOVING PARTY:   Plaintiff Beverly Law

RESPONDING PARTY(S): None as of March 15, 2023

REQUESTED RELIEF:

1.      An order discharging Plaintiff from liability and dismissing Plaintiff from interpleader actions

2.      An order granting the request for attorney’s fees

TENTATIVE RULING:

1.      Motion for Discharge and Request for Attorney’s Fees is DENIED.

2.      Defendants Department of Health Care Services (Medi-cal), Redlands Chiropractic, Key Health Medical Solutions and Encino Anesthesia Associates, Inc. are DISMISSED without prejudice.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

On March 12, 2021, Plaintiff in Interpleader Beverly Law (“Plaintiff in Interpleader”) filed a complaint in interpleader against Defendants in Interpleader Key Health Medical Solutions, Coastal Medical Group, Redlands Chiropractic, Encino Anesthesia Associates, INC, Department of Health Care Services, George Karim, and Does 1 through 25. Plaintiff was retained by Karim, who was injured in an accident on June 12, 2017, a collusion which gave rise to a claim in favor of Karim. As a result of that accident, Karim sought medical treatment for his injuries and agreed to a lien. The Medical Provider Defendants provided medical treatment to Karim and assert a lien against settlement proceeds. Plaintiff alleges that there is a conflict regarding the remaining balance due to Karim, who is unwilling to settle his claim. Plaintiff is unsure how to distribute funds without the risk of being sued for inappropriate distribution of settlement funds given the Medical Provider Defendants’ competing claims for the funds with Karim.

On August 4, 2021, Petitioner Beverly Law filed a Motion to be Discharged, which was initially DENIED without prejudice.

On August 26, 2022, Petitioner Beverly Law filed another Motion to be Discharged.

LEGAL STANDARD

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.  Hancock Oil Co. v. Hopkins (1944) 24 Cal.2d 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 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, 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.  Code Civ. Proc., §§ 386(a), 386.5.  The motion must be supported by an affidavit by the stakeholder establishing the ground for interpleader.  Code Civ. Proc., §§ 386(a), 386.5.  Notice of the motion must be served on each of the adverse claimants to the funds or property.  Code Civ. Proc., §§ 386(a), 386.5. 

The stakeholder may seek reimbursement for his or her 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. 

ANALYSIS:

Plaintiff moves the Court to discharge Plaintiff from liability regarding the funds interpleaded in the action and to dismiss Plaintiff from the interpleader action. Mr. Karmin sought medical treatment, which totaled $12,755.54. (Complaint ¶ 7.) Defendant Medical Providers have accepted a reduced total of $3,820.54. (Complaint ¶ 8.) The complaint states that Plaintiff deposited $2,879.46 with the Clerk of Court, “which sum represents the full amount remaining after Plaintiff’s attorneys’ fees and costs earned on the underlying obtained in favor of Defendant Patient.” (Complaint ¶ 9.)

There are two statutes that are applicable for discharge: CCP § 386(a) and 386.5. Previously, this Court determined that section 386(a) does not apply because it was not clear that it was an action pending in contract or for personal property.

CCP §386.5 states:

Where 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.

This court also previously indicated that the complaint did not set forth that this section applied for three reasons: the amount to be interpleaded was unclear. The complaint indicates the settlement amount was $10,200, four claimants had been paid a total of $3,820.54 but Plaintiff deposited $2,879.64 with the Court (Comp. ¶¶ 8, 9, Dec. Shemtoub ¶ 5), but also states that $7,320.54 is the full amount balance of Defendant Patient with Defendants. (Comp. 10.) Also, it was unclear if Plaintiff was seeking full or partial interpleader and plaintiff did not establish that conflicting demands have been made.

In the new motion filed on August 26, 2022, Plaintiff provides the following new information:

1.      Mr. Karmin is claiming “that the who [sic] settlement amount is in dispute and not wanting to pay any party to this action.” (Motion 1: 17-18.)

2.      There are conflicting demands made because Mr. Karmin’s medical providers are demanding payment. (Id. at 19.)

3.      Plaintiff is seeking $2,879.46 in attorney’s fees from the underlying case and $2,185 for this motion totaling $5,064.46. (Id. at 20-22.)

Plaintiff also stated that it is a mere stakeholder (Id. at 22-23) and will deliver funds to the Court (Motion 2: 18-19.) The Motion to Discharge is DENIED. 

It is clear from the updated claim, Plaintiff is not a mere stakeholder, but rather has an interest in fees that his client disputes. Stated otherwise, Plaintiff has a fee dispute with client Karmin.  

OSC RE DISMISSAL

On September 20, 2022, the Court issued a Minute Order indicating that it would use its discretion to dismiss the case for failing to file valid proof of service within 2 years pursuant to CCP § 583.410(a) and 583.420(a)(1).

            On November 29, 2022, Petitioner filed  Proofs of Person Service as to Department of Health Care Services (Medi-cal), and Redlands Chiropractic. On March 17, 2023, the Clerk rejected Default, noting that once again the proof of service filings for these named two defendants were nor properly executed. In other words, they are not valid. Petitioner also filed 4 Declarations of Due Diligence, indicating that independent process servers attempted to serve the following entities but were unsuccessful: Key Health Medical Solutions (at 2 different locations in Westlake Village, CA) and Encino Anesthesia Associates, Inc. (at 2 locations in Encino and San Bernardino.) In other words, plaintiff has yet to file valid proof of services on these defendants.

            Accordingly, the Court exercises its discretion to dismiss the entity defendants for failing to file valid proof of services within 2 years pursuant to CCP § 583.410(a) and 583.420(a)(1).

Conclusion

For the foregoing reasons, the Court decides the pending motion as follows:

Motion for Discharge and request for Attorney Fees is DENIED.

Defendants Department of Health Care Services (Medi-cal), Redlands Chiropractic, Key Health Medical Solutions and Encino Anesthesia Associates, Inc. are DISMISSED without prejudice.

OSC re: dismissal of remaining Defendant Karmin on April 25, 2023 at 8:30 AM because this is not a proper interpleader.

Moving party to give notice.

IT IS SO ORDERED.

Dated:             March 20, 2023                       ___________________________________

                                                                                    Upinder S. Kalra

                                                                                    Judge of the Superior Court