Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-07914/USCOURTS-cand-3_06-cv-07914-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1442 Petition for Removal

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ANCHOR BREWING COMPANY,

Plaintiff,

 v.

JULIO PEIX, et al.,

Defendants /

No. C-06-7914 MMC

ORDER GRANTING IN PART AND

DENYING IN PART MOTION TO

DISCHARGE STAKEHOLDER;

GRANTING DEFENDANT JULIO PEIX’S

MOTION TO DISMISS, CONSTRUED AS

MOTION FOR SUMMARY JUDGMENT;

VACATING HEARING

Before the Court is Anchor Brewing Company’s (“Anchor”) “Motion in US District

Court for Order Discharging Stakeholder, Restraining Adverse Claimants from Instituting or

Further Prosecuting Any Action in Any Court in this State Involving the Same Fund or

Property, and for Reasonable Attorney Fees and Costs of Suit from the Funds Deposited,”

filed January 10, 2007, as amended January 24, 2007. Defendant Julio Peix (“Peix”) has

filed opposition, to which Anchor has replied.

Also before the Court is Peix’s motion, filed January 26, 2007, to dismiss Anchor’s

Complaint in Interpleader pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. 

Plaintiff has filed opposition, and defendant United States has filed a response; Peix has

filed a reply.

Having considered the papers filed in support of and in opposition to the motions,

the Court deems the matters suitable for decision on the papers, VACATES the hearing

Case 3:06-cv-07914-MMC Document 52 Filed 02/28/07 Page 1 of 6
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Peix removed the instant matter to federal district court.

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“Deposit of the disputed funds in the [federal district] court’s registry . . . is not a

jurisdictional requirement to [R]ule 22(1) interpleader.” Gelfgren v. Republic Nat’l Life Ins.

Co., 680 F. 2d 79, 81-82 (9th Cir. 1982). The instant action, upon removal, proceeds under

Rule 22, and the Court has jurisdiction over the action in light of Anchor’s having alleged its

entitlement to an order finding it is not liable to the United States for any failure to withhold

employment taxes from the settlement monies. See Morongo Band of Mission Indians v.

California State Board of Equalization, 858 F. 2d 1376, 1384 (9th Cir. 1988) (holding district

court has jurisdiction over interpleader action under Rule 22 “if the cause(s) of action

anticipated by the plaintiff’s suit would arise under federal law”).

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scheduled for March 2, 2007, and rules as follows.

BACKGROUND

In Anchor’s complaint, initially filed in state court,1

 Anchor alleges Peix filed a civil

action against Anchor, in which Peix sought “accrued salary, vacation and severance pay,”

as well as “damages from loss of wages [and] emotional distress” and “punitive damages.” 

(See Compl. ¶ 3.) Anchor also alleges that Peix and Anchor settled Peix’s claims, but that

Peix and Anchor disagreed as to whether Anchor was required to withhold employment

taxes from the settlement monies, (see Compl. ¶¶ 4-10). At the time it filed its complaint,

Anchor deposited with the Clerk of the San Francisco Superior Court the sum of

$115,000.00, (see Widmann Decl., filed December 27, 2006, Ex. E), which amount is “the

amount payable under the settlement,” (see Compl. ¶ 4).2

DISCUSSION

A. Motion for Discharge

In its motion for discharge, Anchor argues it is entitled to an order discharging it from

liability to defendants on any claim pertaining to the interpleaded funds, an order restraining

defendants from prosecuting any other action against Anchor pertaining to the 

interpleaded funds, and an award of attorney’s fees and costs from the interpleaded funds. 

Under both federal and state law, a court has discretion to “discharge the plaintiff from

further liability,” to restrain claimants from “instituting or prosecuting any proceeding . . .

affecting the property, instrument or obligation involved in the interpleader action,” see 28

U.S.C. § 2361; see also Cal. Code Civ. Proc. § 386(f), and to award the plaintiff fees and

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This ruling does not apply to Peix’s motion for the imposition of sanctions against

Anchor, filed herein, which motion is noticed for hearing March 23, 2007.

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Anchor has not advised the Court, either in its complaint or in any other filing, as to

the amount it believes it may have been required to withhold.

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costs from the interpleaded funds, see Schirmer Stevedoring Co. v. Seaboard Stevedoring

Corp., 306 F. 2d 188, 194-95 (1962) (holding district court has discretion to award plaintiff

in interpleader action fees and costs from interpleaded funds); see also Cal. Code Civ.

Proc. § 386.6(a).

In that Anchor does not claim an interest in the subject funds, Anchor is entitled to

an order discharging it from any further liability to defendants on any claim pertaining to the

interpleaded funds and restraining defendants from prosecuting any other action that

pertains to the interpleaded funds.3

 See, e.g., Aon Corp. v. Hohlweck, 223 F. Supp. 2d

510, 514 (S.D. N.Y. 2002) (holding “stakeholder having no claim to the subject matter of

the action” may be discharged from action, leaving “competing claimants” to establish their

entitlement to interpleaded funds).

With respect to Anchor’s claim for fees and costs from the interpleaded funds, the

Court declines to exercise its discretion to award such fees and costs. Assuming,

arguendo, Anchor had a good faith belief that it may have been required to withhold

employment taxes at the time it instituted the instant action, Anchor nevertheless had no

basis to interplead the entire settlement amount, but only the relatively small portion thereof

it believed was reasonably subject to withholding.4 Stated otherwise, there is no dispute

that Peix is entitled, and has always been entitled, to receive the bulk of the settlement

funds. Consequently, Anchor has, for a period of close to four months, unnecessarily

deprived Peix of the benefits of the majority of the settlement monies. Further, the

evidence offered by both Anchor and Peix establishes Anchor, in advising Peix of its

position that employment taxes should be withheld, waited until after the parties had signed

a written settlement agreement that is silent both as to any allocation of the settlement

funds among Peix’s wage and other claims, and as to the subject of withholding. (See

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Peix also argues the complaint should be dismissed on the ground that Anchor has

“unclean hands.” (See id. at 8:8-12.) Peix fails, however, to demonstrate that he is entitled

to dismissal on such grounds.

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Peix’s Req. for Judicial Notice, filed January 26, 2007, Ex. B (Ex. A attached thereto); Peix

Decl., filed February 9, 2007, ¶ 3; Harrington Decl., filed January 10, 2007, Ex. B). By

waiting to raise the question of withholding until a time after the settlement agreement had

been executed, Anchor effectively deprived Peix of the opportunity to negotiate as to the

inclusion therein of a provision indicating what portion of the settlement monies represented

payment for wage claims; such negotiation, in all likelihood, would have resolved the issue

without the need for court intervention. Under the circumstances, Anchor has not shown its

entitlement to an award of fees and costs from the interpleaded funds.

B. Motion to Dismiss

In his motion to dismiss, Peix argues the complaint should be dismissed on the

ground that the settlement monies are not subject to withholding, and, in reliance on such

argument, asserts he is entitled to an “order that the settlement monies on deposit with the

San Francisco Superior Court be forthwith paid over to him.” (See Peix’s Mot. to Dismiss,

filed January 26, 2007, at 10:16-17.) In essence, Peix is requesting that the Court

determine the merits of the claim alleged in the complaint, an issue more properly

addressed by way of a motion for summary judgment.5 See, e.g., Aon Corp., 223 F. Supp.

2d at 517 (determining, in context of motion for summary judgment brought by claimants,

whether claimants were entitled to interpleaded funds). Indeed, Peix, Anchor, and the

United States have all offered evidence in support of their respective positions. 

Accordingly, the Court will treat the motion to dismiss as a motion for summary judgment. 

See Fed. R. Civ. P. 12(b) (providing where, in support of motion to dismiss, “matters

outside the pleadings are presented to and not excluded by the court, the motion shall be

//

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Ordinarily, the Court would be required to give the parties notice of its intent to treat

a motion to dismiss as a motion for summary judgment. Here, as discussed, each

defendant has submitted evidence, and/or a disclaimer, of its entitlement to the

interpleaded funds. Under such circumstances, the Court perceives no need to continue

the matter.

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treated as one for summary judgment”).6

On the merits, the only alleged claimants identified in the complaint are the United

States, the State of California, and Peix. Peix’s position is set forth above. The respective

positions of the remaining defendants are set forth below.

First, on or about December 19, 2006, the State of California Franchise Tax Board

filed a Disclaimer, in which it “disclaim[ed] any right, title or interest in or to the property

described in the complaint,” and requested that “judgment be entered accordingly.” (See

Peix’s Req. for Judicial Notice, filed January 26, 2007, Ex. E at 1:19-21, 2:4.) Thereafter,

on February 15, 2007, the State of California Employment Development Department filed a

Disclaimer, in which it similarly “disclaim[ed] all right, title and interest of whatsoever

character and extent in the property described in the Complaint,” and requested that

“judgment be entered accordingly.” (See Disclaimer, filed February 15, 2007, at 1:18-21,

1:24.)

Lastly, the United States, on February 5, 2007, filed a Response, in which it

“disclaim[ed] any interest” in the interpleaded funds “except to the extent of $7,069.22,

which [Peix] owes for the 2005 tax year.” (See United States’s Response, filed February 5,

2007, at 1:17-18.) The United States does not, however, identify any ground on which

Anchor would have been required to withhold such sum from the settlement monies to

satisfy Peix’s prior obligation. Nor, given the language of the disclaimer, is the United

States arguing that Anchor was required to withhold employment taxes from the settlement

monies. Consequently, the United States has made no showing, or articulated a theory to

support a finding, that Anchor was required to withhold any sum from the interpleaded

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Peix concedes he owes the United States “approximately $7,000 in penalties and

interest.” (See Peix Decl., filed February 9, 2007, ¶ 2.) The issue before the Court,

however, is whether Anchor is required to withhold said amount from the settlement funds.

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Ordinarily, the Court would direct the Clerk of the District Court to deliver the funds

to Peix at his request. Here, however, Peix removed the case to federal court, and the

interpleaded funds remain in the possession of the Clerk of the Superior Court. Peix cites

no statutory or case law authorizing this Court to issue a similar directive to the Clerk of the

Superior Court.

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funds.7

Based on the State of California’s express disclaimer of any rights to the settlement

funds, the absence of an assertion by the United States that Anchor was required to

withhold any sum from the settlement funds, and the Court’s having exercised its discretion

to deny Anchor an award of attorney’s fees and costs from those funds, the Court finds that

Peix is, as a matter of law, entitled to the interpleaded funds.

CONCLUSION

For the reasons stated above:

1. Anchor’s motion for discharge is hereby GRANTED in part and DENIED in part

as follows. To the extent Anchor seeks an order of discharge, the motion is hereby

GRANTED; Anchor is hereby DISCHARGED from further liability to defendants on any

claim pertaining to the interpleaded funds, and defendants are hereby RESTRAINED from

prosecuting any other action against Anchor pertaining to the interpleaded funds. In all

other respects, Anchor’s motion is DENIED.

2. Peix’s motion to dismiss, construed as a motion for summary judgment, is hereby

GRANTED.

2. Peix is hereby ordered to submit, no later than March 19, 2007, a proposed form

of judgment accompanied by a supplemental memorandum of points and authorities

supporting such specific form of judgment.8

IT IS SO ORDERED.

Dated: February 28, 2007 

MAXINE M. CHESNEY

United States District Judge

Case 3:06-cv-07914-MMC Document 52 Filed 02/28/07 Page 6 of 6