POOL & ELECTRICAL PRODUCTS, INC., A CALIFORNIA CORPORATION VS ANDREW C. ZALDIVAR, ET AL.

Tentative Rulings

Case Number: 19STLC08249    Hearing Date: July 06, 2020    Dept: 25

MOTION TO DEPOSIT BY STAKEHOLDER, FOR DISCHARGE, AND FOR ATTORNEY’S FEES

TENTATIVE RULING:

Defendant and Cross-Complainant Western Surety Company’s Motion to Deposit by Stakeholder and for Discharge is GRANTED. Cross-Complainant’s request for attorney’s fees and costs is also GRANTED in the amount of $4,000.00. Interpleader funds of $11,000 are to be deposited within thirty (30) days of receipt of this order.

Trial date remains scheduled for March 8, 2021 at 8:30 a.m. in Department 25.

SERVICE: 

[X] Proof of Service Timely Filed (CRC, rule 3.1300) OK

[X] Correct Address (CCP §§ 1013, 1013a) OK

[X] 16/21 Court Days Lapsed (CCP §§ 12c, 1005(b)) OK

OPPOSITION: None filed as of July 1, 2020   [   ] Late [X] None

REPLY: None filed as of July 1, 2020   [   ] Late [X] None

ANALYSIS:

1. Background

On September 9, 2019, Plaintiff Pool & Electrical Products, Inc. (“Pool & Electrical” or “Plaintiff”) filed an action for breach of contract, foreclosure of mechanic’s lien, common counts, collection on contractor’s license bond, violation of Business & Professions Code section 7108.5, and breach of written guarantee against Defendants Andrew C. Zaldivar (“Zaldivar”), individually and doing business as Wolf Creek Design Build (“Wolf Creek”), Steven Marotta (“Marrota”), Patrick Hughes (“Patrick”), and Western Surety Company (“Western Surety” or “Cross-Complainant”). Defendant Marrota filed an Answer on March 20, 2020.

On September 19, 2019, Defendant and Cross-Complainant Western Surety filed an Answer and a Cross-Complaint for interpleader against Cross-Defendants Zaldivar, Wolf Creek, Pool & Electrical, Patrick, Laura Hughes (“Laura”), and Haro Pool Plastering Corp. (“Haro Pool”). Amy Beth Stathes (“Stathes”) was substituted for Roe 21 on October 24, 2019, and Marotta and Christine Nguyen (“Nguyen”) were substituted for Roe 22 and Roe 23, respectively, on November 8, 2019. Cross-Defendant Pool & Electrical filed an Answer on January 17, 2020, and Stathes filed her Answer on March 30, 2020.

On December 20, 2019, default was entered as to Cross-Defendants Patrick, Laura, and Haro Pool. On March 6, 2020, default was entered against Cross-Defendant Stathes.

On November 8, 2019, Zaldivar and Wolf Creek, were dismissed from the Cross-Complaint. Cross-Defendants Nguyen and Marotta were also dismissed from the Cross-Complaint without prejudice on January 27, 2020 and March 10, 2020, respectively.

On March 6, 2020, Cross-Complainant Western filed the instant Motion to Deposit by Stakeholder; For Discharge of Stakeholder; Request for Attorney’s Fees (the “Motion”). To date, no opposition has been filed.

1. 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.  (For example, an escrow-holder who receives conflicting demands from the parties to the escrow regarding the funds or documents he or she holds.)  (Hancock Oil Co. v. Hopkins (1944) 24 C2d 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 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.)

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, subd. (a), 386.5.) 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.  (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. (Code Civ. Proc., § 386.6.)

1. Discussion

Cross-Complainant Western Surety’s request to be discharged from liability is GRANTED. The subject matter of this action is a $15,000 Contractor’s State License Bond issued to Cross-Defendant Zaldivar, individually and dba Wolf Creek, Bond No. 63698074 (the “Bond”). (Mot., Sosa, ¶¶ 2, 8.) All claimants have been served with the Cross-Complaint and have either filed an answer, been dismissed, or have defaulted. Cross-Complainant Western Surety states it has no interest in the Bond proceeds, and that it cannot determine the validity of the conflicting demands that have been made as to the funds. (Id. at ¶ 8.) The Court also enters a restraining order to prevent the prosecution of other actions affecting the rights and obligations as between the parties in the interpleader. (Code Civ. Proc., §§ 386, 386.5.)

In addition, the fees and costs sought by Cross-Complainant Western Surety are reasonable. Cross-Complainant’s counsel has expended substantial attorney’s fees and costs bringing this action and Motion, has served all Cross-Defendants, will deposit the bond, and has sought to preserve the surplus funds. (Mot., Sosa Decl., ¶¶ 6, 7, 10, Exhs. 1, 2.) Thus, attorney’s fees and costs are awarded in the amount of $4,000 (Id. at ¶ 10.) Cross-Complainant to deposit funds of $11,000.00 within ten (10) days of receipt of this order.

1. Conclusion & Order

For the foregoing reasons, Defendant and Cross-Complainant Western Surety Company’s Motion to Deposit by Stakeholder and for Discharge is GRANTED. Cross-Complainant’s request for attorney’s fees and costs is also GRANTED in the amount of $4,000.00. Interpleader funds of $11,000 are to be deposited within thirty (30) days of receipt of this order.

Trial date remains scheduled for March 8, 2021 at 8:30 a.m. in Department 25.

Moving party is ordered to give notice.

Case Number: 19STLC08249    Hearing Date: July 02, 2020    Dept: 25

MOTION TO DEPOSIT BY STAKEHOLDER, FOR DISCHARGE, AND FOR ATTORNEY’S FEES

(CCP §§ 386, 386.5)

TENTATIVE RULING:

Defendant and Cross-Complainant Western Surety Company’s Motion to Deposit by Stakeholder and for Discharge is GRANTED. Cross-Complainant’s request for attorney’s fees and costs is also GRANTED in the amount of $4,000.00. Interpleader funds of $11,000 are to be deposited within ten (10) days of receipt of this order.

Trial date remains scheduled for March 8, 2021 at 8:30 a.m. in Department 25.

SERVICE:

[X] Proof of Service Timely Filed (CRC, rule 3.1300) OK

[X] Correct Address (CCP §§ 1013, 1013a) OK

[X] 16/21 Court Days Lapsed (CCP §§ 12c, 1005(b)) OK

OPPOSITION: None filed as of July 1, 2020 [ ] Late [X] None

REPLY: None filed as of July 1, 2020 [ ] Late [X] None

ANALYSIS:

1. Background

On September 9, 2019, Plaintiff Pool & Electrical Products, Inc. (“Pool & Electrical” or “Plaintiff”) filed an action for breach of contract, foreclosure of mechanic’s lien, common counts, collection on contractor’s license bond, violation of Business & Professions Code section 7108.5, and breach of written guarantee against Defendants Andrew C. Zaldivar (“Zaldivar”), individually and doing business as Wolf Creek Design Build (“Wolf Creek”), Steven Marotta (“Marrota”), Patrick Hughes (“Patrick”), and Western Surety Company (“Western Surety” or “Cross-Complainant”). Defendant Marrota filed an Answer on March 20, 2020.

On September 19, 2019, Defendant and Cross-Complainant Western Surety filed an Answer and a Cross-Complaint for interpleader against Cross-Defendants Zaldivar, Wolf Creek, Pool & Electrical, Patrick, Laura Hughes (“Laura”), and Haro Pool Plastering Corp. (“Haro Pool”). Amy Beth Stathes (“Stathes”) was substituted for Roe 21 on October 24, 2019, and Marotta and Christine Nguyen (“Nguyen”) were substituted for Roe 22 and Roe 23, respectively, on November 8, 2019. Cross-Defendant Pool & Electrical filed an Answer on January 17, 2020, and Stathes filed her Answer on March 30, 2020.

On December 20, 2019, default was entered as to Cross-Defendants Patrick, Laura, and Haro Pool. On March 6, 2020, default was entered against Cross-Defendant Stathes.

On November 8, 2019, Zaldivar and Wolf Creek, were dismissed from the Cross-Complaint. Cross-Defendants Nguyen and Marotta were also dismissed from the Cross-Complaint without prejudice on January 27, 2020 and March 10, 2020, respectively.

On March 6, 2020, Cross-Complainant Western filed the instant Motion to Deposit by Stakeholder; For Discharge of Stakeholder; Request for Attorney’s Fees (the “Motion”). To date, no opposition has been filed.

1. 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. (For example, an escrow-holder who receives conflicting demands from the parties to the escrow regarding the funds or documents he or she holds.) (Hancock Oil Co. v. Hopkins (1944) 24 C2d 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 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.)

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, subd. (a), 386.5.) 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. (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. (Code Civ. Proc., § 386.6.)

1. Discussion

Cross-Complainant Western Surety’s request to be discharged from liability is GRANTED. The subject matter of this action is a $15,000 Contractor’s State License Bond issued to Cross-Defendant Zaldivar, individually and dba Wolf Creek, Bond No. 63698074 (the “Bond”). (Mot., Sosa, ¶¶ 2, 8.) All claimants have been served with the Cross-Complaint and have either filed an answer, been dismissed, or have defaulted. Cross-Complainant Western Surety states it has no interest in the Bond proceeds, and that it cannot determine the validity of the conflicting demands that have been made as to the funds. (Id. at ¶ 8.) The Court also enters a restraining order to prevent the prosecution of other actions affecting the rights and obligations as between the parties in the interpleader. (Code Civ. Proc., §§ 386, 386.5.)

In addition, the fees and costs sought by Cross-Complainant Western Surety are reasonable. Cross-Complainant’s counsel has expended substantial attorney’s fees and costs bringing this action and Motion, has served all Cross-Defendants, will deposit the bond, and has sought to preserve the surplus funds. (Mot., Sosa Decl., ¶¶ 6, 7, 10, Exhs. 1, 2.) Thus, attorney’s fees and costs are awarded in the amount of $4,000 (Id. at ¶ 10.) Cross-Complainant to deposit funds of $11,000.00 within ten (10) days of receipt of this order.

1. Conclusion & Order

For the foregoing reasons, Defendant and Cross-Complainant Western Surety Company’s Motion to Deposit by Stakeholder and for Discharge is GRANTED. Cross-Complainant’s request for attorney’s fees and costs is also GRANTED in the amount of $4,000.00. Interpleader funds of $11,000 are to be deposited within ten (10) days of receipt of this order.

Trial date remains scheduled for March 8, 2021 at 8:30 a.m. in Department 25.

Moving party is ordered to give notice.