ACCREDITED SURETY AND CASUALTY COMPANY, INC., A CORPORATION VS EDWARD URBAN, ET AL.

Tentative Rulings

Case Number: 19STLC11678    Hearing Date: September 28, 2020    Dept: 26

Accredited Casualty & Surety Co., Inc. v. Urban , et al.

MOTION TO DEPOSIT BY STAKEHOLDER, FOR DISCHARGE OF STAKEHOLDER, FOR ATTORNEY’S FEES; AND FOR TEMPORARY RESTRAINING ORDER

(CCP §§ 386, 386.5)

TENTATIVE RULING:

Plaintiff Accredited Surety & Casualty Company, Inc.’s Motion to Deposit by Stakeholder; for Discharge of Stakeholder; and Request for Attorney’s Fees is GRANTED AS TO THE THIRD CAUSE OF ACTION FOR INTERPLEADER. INTERPLEADER FUNDS OF $12,600.00 TO BE DEPOSITED WITHIN 30 DAYS. Trial remains scheduled for June 21, 2021 at 8:30 am in Department 26 in the Spring Street Courthouse.

On December 23, 2019, Plaintiff Accredited Casualty & Surety Co., Inc. (“Plaintiff”) initiated this action for indemnity, reimbursement and interpleader against Defendants Edward Urban aka Edward Klein Urban, individually (“Defendant Urban”) and dba On Top Electric (“Defendant On Top”); Onesource Distributors, Llc (“Defendant Onesource”); Dawn Davidson (“Defendant Dawn Davidson”); Bill Davidson (“Defendant Bill Davidson”); and Yervant Demirjian (“Defendant Demirjian”). This action arises from a dispute over construction Bond No. 10089293 (the “Bond”) in the penal sum of $15,000 for homeowner claimants or $7,500 for non-homeowner claimants. (Compl. ¶¶ 8, 26.) Pursuant to the Application and Indemnity Agreement, Defendants Urban and On Top agreed to indemnify Plaintiff in exchange for issuance of the Bond. (Id. ¶¶6-7.) Remaining Defendants are alleged to have made claims on the Bond and are named only on the third cause of action for interpleader. (Id. at ¶¶8, 22-26.)

All Defendants having now answered the Complaint, in default, or dismissed from the action, Plaintiff brings the instant Motion to Deposit by Stakeholder, for Discharge of Stakeholder, for Attorney’s Fees, and for Temporary Restraining Order (the “Motion”). To date, no opposition has been filed.

Legal Standard

Interpleader is a procedure whereby a person holding money or personal property to which conflicting claims are being made by others, or may be made, can join the adverse claimants and force them to litigate their claims among themselves. (Code Civ. Proc., § 386, subd. (b).) Hancock Oil Co. v. Hopkins (1944) 24 Cal.2d 497, 508 (i.e., an escrow-holder who receives conflicting demands from the parties to the escrow regarding the funds or documents he or she holds); 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.)

The stakeholder may seek reimbursement for its costs and reasonable attorneys’ fees incurred. 

(UAP-Columbus 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. (Ibid.) Ultimately, such payment may be charged to one or more of the adverse claimants in the final judgment. (Code Civ. Proc., § 386.6.)

Finally, the Court may issue an “order restraining all parties to the action from instituting or further prosecuting any other proceeding in any court in this state affecting the rights and obligations as between the parties to the interpleader until further order of the court.” (Code Civ. Proc., § 386, subd. (f).)

Discussion

Plaintiff’s request to be discharged from liability on the first cause of action for interpleader is granted. As all claimants have been served with the Summons and Complaint, served with the instant motion, answered, are in default, or were dismissed from the action, relief is proper. (Code Civ. Proc., §§ 386 and 386.5.) The subject matter of this action is $15,000.00. Currently, Plaintiff cannot determine the validity of the conflicting demands that have been made. (Motion, Pagan Decl., ¶¶6-8 and Exh. 2.) Upon deposit of the funds to the court, Plaintiff may be discharged from further liability and the Court hereby enters a restraining order to prevent the prosecution of other actions affecting the rights and obligations as between the parties to the interpleader. (Code Civ. Proc., §§ 386.5, 386, subd. (f).)

Furthermore, the fees and costs sought by Plaintiff are proper. Plaintiff’s counsel has expended substantial attorneys’ fees and costs bringing this action and protecting itself from liability. Specifically, Plaintiff’s counsel filed the instant action and motion, served all Defendants, will appear at the instant hearing, will deposit the bond, and has sought to preserve the surplus funds. (Motion, Pagan Decl., ¶10 and Exh. 1.) Therefore, fees and costs are awarded to Plaintiff in the amount of $2,400.00. (Ibid.)

Plaintiff Accredited Surety & Casualty Company, Inc.’s Motion to Deposit by Stakeholder; for Discharge of Stakeholder; and Request for Attorney’s Fees is GRANTED AS TO THE THIRD CAUSE OF ACTION FOR INTERPLEADER. INTERPLEADER FUNDS OF $12,600.00 TO BE DEPOSITED WITHIN 30 DAYS. Trial remains scheduled for June 21, 2021 at 8:30 am in Department 26 in the Spring Street Courthouse.

Moving party to give notice.