Judge: William A. Crowfoot, Case: 23AHCV00890, Date: 2024-02-05 Tentative Ruling

Case Number: 23AHCV00890    Hearing Date: February 5, 2024    Dept: 3

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHEAST DISTRICT

          Introduction

On April 20, 2023, plaintiff Wells Fargo Bank, N.A. (“Wells Fargo”) filed this interpleader action. Wells Fargo alleges that on March 8, 2022, defendant Xiaoye Zhang (“Zhang”) opened a deposit account at Wells Fargo ending with account number -6989 (“Account”). On January 9, 2023, $30,000 was wired from a deposit account held by defendant Shirley A. Miller (“Miller”) to Zhang’s Account. Miller requested a recall of the Wire and claimed that it was procured by fraud. On January 10, 2023, Wells Fargo restrained Zhang’s Account and notified Zhang of Miller’s fraud claim; Wells Fargo requested authority from Zhang to release the money to Miller and received no response. On information and belief, Wells Fargo alleges that Zhang contends that the Wire was authorized and any restraint on her Acount should be lifted, leading to the filing of this complaint-in-interpleader.

On October 26, 2023, Wells Fargo filed this motion for an order: (1) permitting the deposit of $30,000 with the Court minus $11,020.88 in fees and costs and (2) discharging it from liability

Legal Standard

Interpleader is a procedure which permits a party holding money or property to which conflicting claims are being made by others to join the adverse claimants and force them to litigate their claims among themselves. (Code Civ. Proc., § 386, subd. (b).) “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.)  

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. (Code Civ. Proc., § 386.5.) 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 (1999) 71 Cal.App.4th 1114, 1122.) In ordering the discharge of such party, the court may, in its discretion, award such party his costs and reasonable attorney fees from the amount in dispute which has been deposited with the court. (Code Civ. Proc., § 386.6, subd. (a).) 

Discussion

Here, Miller only opposes Wells Fargo’s right to attorneys’ fees and costs. Wells Fargo requests fees and costs in the total amount of $11,020.88. Miller argues this is excessive considering it is more than a third of the proceeds at issue. Miller relies on Wells Fargo Bank, N.A. v. Zinnel (2004) 125 Cal.App.4th 393, 401, in which the court of appeal reversed a grant of attorneys’ fees after noting that Wells Fargo held onto $90,000 for five months before filing the interpleader action, and held the funds for another eight months until the final order dismissing the complaint, without ever depositing the money with the court.

On reply, Wells Fargo argues that the amount of fees and costs sought is reasonable because the bulk of the work was performed by Michael Rapkine, who charges a reasonable rate of $322 an hour and also wrote off numerous time entries. Wells Fargo also argues that Zinnel is distinguishable and that “legislative intent supports a more flexible interpretation of interpleader procedures.” (Reply, p. 3.) However, Wells Fargo fails to discuss any “legislative intent.” Instead, Wells Fargo points out that the trial court’s fee award in Zinnel subtracted $43,000 in fees from the $90,000 in dispute, whereas here, the amount requested is only $11,020.88 out of $30,000, and is therefore proportionately less.  (Reply, p. 3.) While that may be true, other facts in Zinnel are quite similar. Like in Zinnel, Wells Fargo waited several months after the dispute arose before filing the interpleader action. Also, as in Zinnel, Wells Fargo waited several months to file this motion for discharge on October 26, 2023, and several more months will have passed by the time any order is issued.

Miller identified specific billing and cost entries that are allegedly “either unrelated to the preparation and filing of the complaint or the Motion, or amount to unnecessary nickel-and-diming of an elderly fraud victim.” (Opp., p. 6.) While Wells Fargo certainly incurred unavoidable filing fees and costs involved with filing this interpleader action and serving Zhang through publication, the Court agrees with Miller that the billing and cost entries identified by Miller are excessive. Therefore, the Court subtracts the total amount of those identified entries, $2,132.60, from Wells Fargo’s request for fees and cost.

          Conclusion

The motion for discharge is GRANTED in part. Wells Fargo is authorized to deposit the proceeds of $30,000 with the clerk, minus fees and costs in the amount of $8,888.28, within 30 days. Upon deposit, Wells Fargo is discharged from liability in this action and a judgment of dismissal shall be entered in its favor.

Moving party to give notice.

Dated this 5th day of February, 2024

Parties who intend to submit on this tentative must send an email to the Court at ALHDEPT3@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.