Filed 5/20/20 Vive TFP, Ltd. v. Dunlap CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

VIVE TFP, LTD. et al.,

Plaintiffs and Appellants,

v.

BLAKE WALTER DUNLAP,

Defendant and Appellant;

JOANNA PAVLOVA LENTS,

Defendant and Respondent.

E071280

(Super.Ct.No. PSC1801814)

OPINION

APPEAL from the Superior Court of Riverside County. James T. Latting, Judge. Dismissed.

Law Offices of Michael G. Steiniger and Michael G. Steiniger for Plaintiffs and Appellants.

The Williams Law Corporation and J. Craig Williams for Defendant and Appellant.

Law Office of Robert D. Coppola, Jr., and Robert D. Coppola, Jr., for Defendant and Respondent.

I. INTRODUCTION

Texas limited liability partnerships, plaintiffs and appellants Vive TFP Ltd. and Cantera Creek TFP Ltd. (plaintiffs), filed a complaint pursuant to Code of Civil Procedure section 386 seeking to interplead funds with the clerk of the superior court. The funds allegedly represented partnership distributions owed to defendant and respondent Joanna Pavlova Lents (Lents). Plaintiffs named Lents and defendant and appellant Blake Walter Dunlap in his capacity as the executor for the estate of Jerry Cecil Dunlap (Dunlap) as defendants on the ground that Dunlap had asserted a competing claim to the partnership distributions. Lents demurred to the complaint in interpleader and the trial court sustained the demurrer without leave to amend. Plaintiffs appeal arguing the trial court erred in concluding that the complaint failed to alleged facts supporting their right to interplead. Dunlap has also filed a cross-appeal asserting the same argument as plaintiffs.

Following completion of briefing and issuance of our tentative opinion in this matter, the parties submitted a stipulation requesting dismissal of the appeal. Accordingly, we exercise our discretion to grant the request to dismiss the appeal pursuant to the parties’ stipulation. While the stipulation does not address the cross-appeal, we dismiss the cross-appeal for the reasons set forth in this opinion.

II. FACTS & PROCEDURAL HISTORY

On March 29, 2018, plaintiffs filed an interpleader action in Riverside County Superior Court. Plaintiffs sought to interplead $290,341.72 and named Lents and Dunlap as defendants.

The complaint in interpleader alleged that Lents purchased a partnership interest in a limited partnership known as Lake Highlands Thrive, Ltd. (LHTL); that during a subsequent partnership reorganization, Lents’s partnership interests in LHTL were converted into partnership interests in each of the plaintiffs; and that as a partner she was entitled to a distribution following the sale of real property holdings by the plaintiffs. It further alleged that Lents and Dunlap were involved in a separate litigation in Riverside County Superior Court bearing case No. PSC1604916 in which Dunlap alleged Lents used fraud or undue influence to purchase her original partnership interest in LHTL with Dunlap’s money. Plaintiffs specifically alleged the cross-complaint filed by Dunlap in case No. PSC1604916 constituted the competing claim for Lents’s partnership distributions entitling plaintiffs to interplead the funds pursuant to Code of Civil Procedure section 386.6. Plaintiffs further specifically alleged that but for that cross-complaint filed by Dunlap, they would distribute the funds to Lents.

On May 21, 2018, Lents filed a demurrer to the complaint in interpleader and concurrently filed an answer as permitted by Code of Civil Procedure section 430.30. In support of her demurrer, Lents filed a request for judicial notice of the cross-complaint filed by Dunlap in case No. PSC1604916 specifically identified as the competing claim in support of the right to interplead. That pleading named LHTL as a cross-defendant and alleged LHTL owed various statutory and fiduciary duties to Dunlap; LHTL breached those duties to Dunlap’s detriment; and LHTL wrongfully paid out dividends to Lents, which rightfully belonged to Dunlap. As against LHTL, Dunlap’s cross-complaint alleged causes of action for negligence, elder abuse, an accounting, and declaratory relief. However, the cross-complaint did not name either plaintiff as a cross-defendant; did not contain any allegations referencing either plaintiff; did not allege a right to a partnership interest in either plaintiff and did not allege a right to real property or distributions from either plaintiff.

On May 31, 2018, plaintiffs unilaterally filed a first amended complaint in interpleader. On June 5, 2018, Dunlap filed an answer to this first amended complaint. On June 19, 2018, the trial court on its own motion struck plaintiffs’ first amended complaint as filed in violation of Code of Civil Procedure section 472, since Lents had already filed an answer simultaneously with her demurrer pursuant to Code of Civil Procedure section 430.30, subdivision (c).

On July 31, 2018, the trial court issued a ruling sustaining the demurrer to plaintiffs’ complaint in interpleader without leave to amend. In doing so, it concluded the allegations of the pleading did not establish plaintiffs to be disinterested stakeholders, reasoning that the cross-complaint filed by Dunlap alleged LHTL’s independent liability based upon violations of statutory and fiduciary duties owed to Dunlap.

On August 15, 2018, the trial court filed a formal written order sustaining the demurrer without leave to amend and ordering that the funds deposited by plaintiffs with the superior court clerk be returned within 30 days.

On September 17, 2018, the trial court entered a judgment dismissing plaintiffs’ complaint in interpleader.

Plaintiffs appealed from the order sustaining Lents’s demurrer without leave to amend. Dunlap filed a cross-appeal from the same order and judgment. During the pendency of these appeals, Lents filed two motions to dismiss, one seeking dismissal of plaintiffs’ appeal and another seeking dismissal of Dunlap’s cross-appeal. We deferred ruling on either motion in order to consider the motions along with the merits of the appeal.

III. DISCUSSION

A. We Dismiss the Appeal Pursuant to the Parties’ Stipulation

Following completion of briefing, issuance of our tentative opinion and setting of this matter for oral argument, we received a stipulated agreement from the parties requesting dismissal of the appeal. While a party may not dismiss an appeal as a matter of right (see Huschke v. Slater (2008) 168 Cal.App.4th 1153, 1160), we exercise our discretion pursuant to California Rules of Court, rule 8.244(c)(2) to grant the parties’ request in this case. We will order the appeal dismissed pursuant to the parties’ stipulation.

B. Dunlap Has No Standing To Cross-Appeal

The stipulation submitted by the parties does not reference the pending cross-appeal. However, Lents has moved to dismiss the cross-appeal filed by Dunlap, arguing that Dunlap has no standing to appeal. We agree that Dunlap is not an aggrieved party with standing to appeal the judgment entered against plaintiffs on September 17, 2018, and order the cross-appeal dismissed.

“Parties have standing to appeal only if legally ‘aggrieved’ by the judgment or order appealed from. [Citation.] A party is considered legally aggrieved such that he or she has standing to appeal only if his or her ‘rights or interests are injuriously affected by the judgment.’ [Citation.] Further, the right or interests injuriously affected must be ‘ “ ‘immediate, pecuniary, and substantial and not nominal or a remote consequence of the judgment.’ ” ’” (Bratcher v. Buckner (2001) 90 Cal.App.4th 1177, 1184; Code Civ. Proc., § 902; March v. Mountain Zephyr, Inc. (1996) 43 Cal.App.4th 289, 295.)

Here, the only orders and judgment identified in Dunlap’s notice of cross-appeal are the trial court’s order sustaining Lents’s demurrer to plaintiffs’ complaint in interpleader; the corresponding judgment of dismissal; and the order releasing the funds, which plaintiffs deposited with the clerk of the superior court. Dunlap argues that he has standing to appeal because he filed a cross-complaint disputing ownership in the interpleaded funds and because he filed an answer to plaintiffs’ complaint in interpleader. However, neither of these pleadings confer standing upon Dunlap to appeal from the judgment or orders identified in his notice.

“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 & Casualty Co. v. Pietak (2001) 90 Cal.App.4th 600, 612.) “[A] defendant cannot, by a counterclaim or cross-complaint, change the character of the action. [Citation.] The only relief which a defendant can have against the plaintiff in such a suit is to have the action dismissed.” (Id. at 613.) Thus, as between plaintiffs and defendants in an interpleader action, the only issue is the plaintiffs right to interplead funds. The judgment following sustaining of a demurrer constitutes a judgment against plaintiffs in favor of the named defendants. As one of the named defendants, Dunlap is not aggrieved by a judgment in his favor.

Nor does Dunlap’s filing of a cross-complaint asserting his claims against Lents confer standing to appeal from an order or judgment dismissing plaintiffs’ complaint in interpleader. “A complaint and a cross-complaint are, for most purposes, treated as independent actions. . . . [A] cross-complaint is a separate pleading and represents a separate cause of action from that which may be stated in the complaint.” (Security Pacific National Bank v. Adamo (1983) 142 Cal.App.3d 492, 496.) “[T]he cross-complainant is not deprived of the right to the trial of the issues of his cross-complaint by a judgment dismissing the complaint.” (People By & Through Dep’t of Pub. Works v. Clausen (1967) 248 Cal.App.2d 770, 787.) The record here indicates that the trial court sustained a demurrer to Dunlap’s cross-complaint without prejudice and stayed the action pending resolution of case No. PSC1604916 in which Dunlap appears to have raised identical claims. However, Dunlap’s notice of cross-appeal does not appeal from the order dismissing his cross-complaint and staying the action. Further, because the order of dismissal was without prejudice and identical claims appear to have been raised in case No. PSC1604916, Dunlap presumably remains free to litigate the nature of any claim he raised in his cross-complaint. The dismissal of plaintiffs’ complaint in interpleader does not preclude Dunlap from seeking any remedy or relief that he would otherwise be entitled to in litigating his cross-complaint. The fact Dunlap filed a cross-complaint does not evidence he is an aggrieved party for purposes of the court’s ruling on demurrer and subsequent judgment of dismissal directed at the underlying complaint.

Finally, Dunlap argues he is aggrieved because he may not have the ability to reach the funds which plaintiffs sought to interplead in order to satisfy a potential future judgment against Lents. However, an interpleader action is intended as an equitable remedy for the benefit of the alleged disinterested stakeholder. In fact, it is the stakeholder’s avowed disinterest in the interpleaded proceeds, which gives him the right to interplead. (Cantu v. Resolution Trust Corp., supra, 4 Cal.App.4th at p. 873.) The interpleader procedure is not intended for the benefit of the claimants seeking to litigate their claim to the interpleaded funds or property. The claimants themselves have no cognizable right to have the funds interpleaded. As explained in City of Morgan Hill v. Brown (1999) 71 Cal.App.4th, 1114, “[c]oncerns about a claimant using interpleader as a substitute for prejudgment attachment certainly seem justified in a situation . . . where . . . interpleader . . . is used not as a protection for the stakeholder, but to keep money from the party legally entitled to the fund. It is, in effect, an attachment. . . . Such a result does violence to the concept of interpleader as an equitable proceeding.” (Id.at p. 1126.) “Interpleader speaks of conflicting claims against the same obligor over the same fund; not on the possible eventual right to a judgment that might be satisfied out of that fund.” (Ibid.) Thus, Dunlap has no cognizable interest in ensuring that plaintiffs interplead funds and is not aggrieved by an order requiring those funds to be returned to plaintiffs. To the extent he may have meritorious claims against Lents, he must litigate those in the same manner as any other civil litigant and cannot take advantage of plaintiffs’ desire to interplead as an alternative means to accomplish a prejudgment attachment.

Since we find that Dunlap is not a party aggrieved by the trial court’s order sustaining the demurrer to the complaint in interpleader; the subsequent judgment of dismissal of that pleading; or the order directing that funds deposited by plaintiffs be returned, we conclude that Dunlap has no standing to appeal from these orders and grant Lents’s motion to dismiss Dunlap’s cross-appeal.

IV. DISPOSITION

The appeal and cross-appeal are dismissed and the remittitur is to issue forthwith. The parties shall bear their own costs.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

FIELDS

J.

We concur:

McKINSTER

Acting P. J.

RAPHAEL

J.