Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-01402/USCOURTS-casd-3_15-cv-01402-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

---

1 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

HDR ENVIRONMENTAL, 

OPERATIONS AND CONSTRUCTION, 

INC., a Nebraska Corporation, and DOES 

1-50, inclusive 

Plaintiff, 

vs. 

DARWIN DEASON, an individual; and 

DOES 1-50 inclusive 

Defendants. 

AND RELATED COUNTERCLAIM 

 Case No.: 15cv1402 JAH (NLS) 

ORDER DENYING DEFENDANT 

AND COUNTERCLAIMANT 

DARWIN DEASON'S MOTION FOR 

LEAVE TO DEPOSIT FUNDS 

INTRODUCTION 

 Pending before the Court is Defendant and Counterclaimant, Darwin Deason’s 

(“DEASON”) Motion for Order Approving Deposit of Funds pursuant to Rule 67(a) of the 

Federal Rules of Civil Procedure and California Code of Civil Procedure §1025. [Doc. No. 

49]. DEASON seeks to deposit $58,621.71 with the Court as the balance of the “not to 

exceed” amount under the terms of the contract that is subject of the instant dispute. After 

Case 3:15-cv-01402-JAH-NLS Document 58 Filed 05/17/18 PageID.<pageID> Page 1 of 3
2 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

a careful review of the pleadings, relevant law, and reasons set forth below, DEASON’s 

motion is DENIED. 

BACKGROUND 

 Plaintiff and Counter-Defendant HDR ENVIRONMENTAL OPERATIONS AND 

CONSTRUCTION, INC. (“HDR”) alleges four causes of action against DEASON 

relating to a contract dispute, including Breach of Contract, Open Book Account, 

Quantum Meriut and Promissory Fraud. HDR’s prayer for relief includes damages in the 

amount of $1,125,486.16. DEASON filed a counterclaim for Declaratory Judgment, 

Injunctive Relief, and Breach of Contract, including a request for damages estimated at 

no less than $1,000,000.00. 

DISCUSSION 

Federal Rules of Civil Procedure Rule 67(a) provides that ‘in an action in which any 

part of the relief sought is a judgment for a sum of money . . .a party . . . by leave of court, 

may deposit with the court all or any part of such sum . . . .’ Fed. R. Civ. P. Rule 67; Rule 

67 is typically employed when an interpleader, usually a bank or insurance company, 

disclaims all interest in a definite sum of money, and requests the court's permission to 

deposit the money into the registry of the court until it can be determined how the funds 

should be divided among the multiple parties claiming entitlement. See Bank of China v. 

Wells Fargo Bank & Union Tr. Co., 209 F.2d 467 (9th Cir. 1953) (bank); New York Life 

Ins. Co. v. Apostolidis, E.D.N.Y.2012, 841 F.Supp.2d 711(insurance company). Rule 67 

has been described as a “procedural device intended to provide a place for safekeeping for 

funds pending resolution of a legal dispute and not to provide a means of altering the 

contractual relationships and legal duties of each party.” Brady v. Basic Research, L.L.C., 

E.D.N.Y.2016, 312 F.R.D. 304. The mechanism is intended to relieve a depositor of the 

burden of administering an asset. Id. A motion to deposit funds in the court should only be 

granted when the question of entitlement is genuinely in dispute. Alstom Caribe, Inc. v. 

George P. Reintjes Co., 484 F.3d 106, 113 (1st Cir. 2007). 

Case 3:15-cv-01402-JAH-NLS Document 58 Filed 05/17/18 PageID.<pageID> Page 2 of 3
3 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

DEASON acknowledges that a difference of $58,621.27 exists between the amounts 

paid by DEASON to HDR and the full “not-to-exceed” price listed under the terms of the 

contract. However, in DEASON’s counterclaim he contends the balance is not due because 

of offsetting damages caused as a result of the negligence, delays, and breach of written 

contract by HDR. In addition, HDR asserts various theories for relief, some which are 

alternatives to the breach of contract claim and wholly independent of the contract terms. 

Money damages requested in HDR’s Third Amended Complaint are nearly twenty-times 

greater than that DEASON wishes to deposit. 

Accordingly, the Court finds the reasoning of the District Court of Puerto Rico 

persuasive. The District Court held that because there was no certain sum which the parties 

agreed was disputed, the court could not ascertain which funds the parties would 

unequivocally be entitled to at the end of the litigation. CASCO, Inc. v. John Deere Const. 

Co. & Forestry Co., 293 F.R.D. 99, 100 (D.P.R. 2013). Therefore, the rule providing for 

deposit of funds to the court did not apply. Id. As in CASCO, Plaintiff and Defendant have 

various claims and counterclaims against each other. DEASON, similar to the defendant 

in CASCO, attempts to deposit with the court an amount he might have to pay at the end of 

litigation if the jury sides with him in the primary action and against him in the counter 

suit. See Id. at 100. The CASCO court found Rule 67 inapposite. The Court finds the same 

reasoning and logic applies. 

CONCLUSION AND ORDER 

Based on the foregoing, IT IS HEREBY ORDERED: Defendant and Counterclaimant, 

Darwin Deason’s Motion for Order Approving Deposit of Funds is DENIED.

IT IS FURTHER ORDERED: 

The hearing for Darwin Deason’s Motion for Order Approving Deposit of Funds, set 

for May 21, 2018 is VACATED. 

DATED: May 16, 2018 

 _________________________________ 

 Hon. JOHN A. HOUSTON

 UNITED STATES DISTRICT JUDGE

Case 3:15-cv-01402-JAH-NLS Document 58 Filed 05/17/18 PageID.<pageID> Page 3 of 3