This action arises out of the January 27, 2014 Judgment in the lead paint public nuisance case entitled The People of the State of California v. Atlantic Richfield Co., et al., Case No. 1-00-CV-788657. Under the Judgment, the defendants, including NL Industries, Inc. (“NL”), are jointly and severally ordered to pay $1,150,000,000 into an abatement fund.

On January 31, 2014, plaintiff Zurich American Insurance Company (“Zurich”) filed a “Complaint for Order of Deposit under C.C.P. § 572” (the “Complaint”) against the People, the prosecuting Cities and Counties, and NL. In the Complaint, Zurich alleges that it issued three general liability insurance policies to NL and now seeks to unconditionally pay and deposit in court the “products-completed operations” aggregate limits for those policies toward the Judgment. Zurich also seeks to unconditionally pay and deposit in court any statutory costs that will be awarded against NL pursuant to the Judgment, plus accrued post-judgment interest, if any, through the date of the filing of the Complaint. Zurich alleges its deposit and offer to pay is authorized by the “Supplementary Payments” provision of the policies and eliminates any claim that the policies may provide coverage for post-judgment interest. The Complaint asserts one cause of action for deposit of money in court under California Code of Civil Procedure section 572.

On February 11, 2014, the People and filed a Memorandum of Costs seeking $638,656.65 in costs for their claims against ConAgra Grocery Products Company, NL, and The Sherwin-Williams Company.

On February 21, 2014, Zurich filed the instant ex parte application for an order of deposit under California Code of Civil Procedure section 572, or alternatively an order shortening time on a motion for order of deposit. Zurick seeks an order allowing it to deposit with the Court $15,000,000, which is the combined “products-completed operations” aggregate limits of the Zurich policies issued to NL. The ex parte application was originally set for March 4, 2014, but on February 27, 2014, the Court reset the matter to April 1, 2014.

Discussion

“When it is admitted by the pleadings, or shown upon the examination of a party to the action, that he or she has in his or her possession, or under his or her control, any money or other thing capable of delivery, which, being the subject of litigation, is held by him or her as trustee for another party, or which belongs or which is due to another party or which should, under the circumstances of the case be held by the court pending final disposition of the action, the court may order the same, upon motion, to be deposited in court or delivered to such party, upon those conditions that may be just, subject to the further direction of the court.” (Cal. Code Civ. Proc., § 572.)

In its ex parte application, Zurich submits there is no dispute that it was in possession and control and was capable of depositing the $15,000,000 in combined “products-completed operations” aggregate limits of the Zurich policies as of the date of filing the Complaint (Jan. 31, 2014), and that this money is to be deposited towards the Judgment. Zurich further submits that the offer to pay and deposit is unconditional and without reservation as to all Defendants in this action, and without prejudice to any of NL’s arguments or positions in the trial court or on appeal. Zurich contends the deposit is intended solely to terminate its potential obligation for post-judgment interest on the Judgment.

The motion is DENIED WITHOUT PREJUDICE. As NL points out, Zurich’s offer to deposit proceeds amounts to a summary disposition of the issues raised in its Complaint even though NL has not had a chance to respond to the Complaint. Furthermore, there are no exigent circumstances to justify an expedited disposition of this matter because if the Complaint’s requested relief is granted, Zurich’s exposure to post-judgment interest will not extend beyond January 31, 2014, regardless of the date of actual deposit.