43 Cal.App.5th 57
Cal. Ct. App.2019Background
- Plaintiff/stakeholder Gregory S. Hood was retained to assist distribution of settlement proceeds from Gonzales’s personal‑injury litigation after Gonzales twice refused to endorse a $299,999.99 settlement check (and other funds previously advanced by counsel). Hood deposited funds and the unendorsed check with the court and filed an interpleader complaint naming Gonzales and multiple lienholders (former counsel, a case-advance lender, medical provider, and insurer).
- Prior counsel (Silvers; Panish, Shea & Boyle) had advanced loans/costs (~$60,744.03 and $50,844.58). Jacobs obtained the $299,999.99 PCI settlement under a CCP § 998 offer; he claimed a 40% contingent fee and ~340 hours of work.
- Hood moved for appointment of an elisor (court clerk) to endorse the check, discharge under CCP § 386.5, and fees under CCP § 386.6; the trial court granted the elisor request, discharged Hood, and awarded fees/costs to Hood.
- At an October 27 hearing the parties submitted a lienholder stipulation; Gonzales conceded the amounts owed to Silvers, PSB, and Case Advance but disputed Jacobs’, Nexus’s, Everence’s claims and Hood’s fees. The court reduced Jacobs’s requested award by $40,000 and distributed net proceeds among lienholders and Gonzales.
- Gonzales appealed, arguing (among other things) interpleader was improper, appointment of an elisor was erroneous, Hood’s fee award was improper, arbitration was waived incorrectly, and Jacobs’s award was excessive. The Court of Appeal affirmed.
Issues
| Issue | Plaintiff's Argument (Gonzales) | Defendant's Argument (Hood / Lienholders) | Held |
|---|---|---|---|
| 1. Was interpleader a proper procedure? | Interpleader improper because funds were sufficient, Hood didn’t “control” the unendorsed check, and no imminent threat of double liability was shown. | Multiple claimants (attorney liens, loans, medical/supplemental claims) created conflicting claims and potential double vexation; Hood disavowed interest and deposited funds. | Interpleader proper; statutory text and precedent allow interpleader when conflicting claims to the same fund exist regardless of whether claims exceed deposited amount. |
| 2. Did Gonzales forfeit or invite error by not objecting at trial? | He preserved objections and lacked adequate opportunity to oppose. | Gonzales conceded key amounts at hearing, answered the complaint agreeing court should determine liens, and did not provide reporter’s transcript of the unreported hearing. | Gonzales estopped/forfeited many objections (invited error); absence of reporter’s transcript precludes overturning discretionary rulings. |
| 3. Was appointment of an elisor (court clerk) to endorse check proper? | Appointment improper because Hood didn’t show necessity and the check wasn’t within Hood’s “control.” | Gonzales repeatedly refused to endorse; local rule authorizes appointment where a party will not execute required documents; Hood disavowed interest. | Appointment appropriate under local rule and equitable discretion; court did not abuse discretion. |
| 4. Were Hood’s discharge and fee award under CCP §§ 386.5–386.6 proper? | Hood used ex parte procedure improperly and Gonzales lacked opportunity to contest fees. | Hood followed statutory procedure, disavowed interest, deposited funds, gave notice, and sought discharge/fees. | Award and discharge were proper; court acted within discretion and Gonzales had notice. |
| 5. Was the distribution—particularly Jacobs’s reduced fee and denial of arbitration—proper? | Jacobs agreed (per Gonzales) to a lower fee; Gonzales’s right to arbitration on fee disputes was not preserved. | Jacobs filed an answer perfecting lien rights and sought fees; Gonzales’s filing of interpleader/answer waived arbitration rights; trial judge prudently adjusted award. | Distribution affirmed: court permissibly reduced Jacobs’s claim by $40,000 and exercised discretion in awarding fees; Gonzales waived arbitration by seeking judicial resolution. |
Key Cases Cited
- Norgart v. Upjohn Co., 21 Cal.4th 383 (doctrine of invited error; party who induced ruling cannot complain on appeal)
- Redevelopment Agency v. City of Berkeley, 80 Cal.App.3d 158 (invited error waiver principle)
- Southern California Gas Co. v. Flannery, 232 Cal.App.4th 477 (interpleader appropriate where potential attorney lien and double vexation exist)
- Southern California Gas Co. v. Flannery, 5 Cal.App.5th 476 (posture on interpleader discharge and fee allowance)
- Fracasse v. Brent, 6 Cal.3d 784 (quantum meruit for discharged attorneys; when full contingent fee may still be reasonable)
- Levin v. Gulf Ins. Group, 69 Cal.App.4th 1282 (liability for paying settlement in disregard of attorney lien; interference with prospective economic advantage)
- Blueberry Properties, LLC v. Chow, 230 Cal.App.4th 1017 (appointment of clerk as elisor to sign documents on behalf of a recalcitrant party)
- In re Estate of Fain, 75 Cal.App.4th 973 (absence of reporter’s transcript = presumption of correctness on evidentiary matters)