Bank's Failure To Deposit Interpleader Funds With Court Waives Claim For Attorney's Fees
If a bank files an interpleader action and freezes the funds in dispute - but does not deposit them with the court - may this bank still recover its attorney's fees?
No, according to the Third District Court of Appeal in Wells Fargo Bank, N.A. v. Zinnel, 04 C.D.O.S. 11370 (Dec. 28, 2004).
In this case, the bank, faced with conflicting demands to almost $90,000 in an account, filed an interpleader action but did not deposit the disputed funds with the court. Instead, the bank placed a hold on the account and moved the court for an order directing their deposit and discharging the bank from the action. Finding that one or more of the other parties might assert claims against the bank, the court denied the motion.
Three months later, the bank brought a new motion seeking to discharge its liability (granted) and later moved to recover its legal fees (also granted). On appeal, the court reversed the fees award, holding that since the bank did not voluntarily deposit the disputed funds with the trial court, it had waived its fees claim.
Your use of the Sheppard, Mullin, Richter & Hampton LLP Financial Institution Law Blog does not create an attorney-client relationship between you and Sheppard, Mullin, Richter & Hampton LLP. Your e-mail will not create an attorney-client relationship. Sheppard, Mullin, Richter & Hampton LLP will have no duty to keep confidential the information that you are now submitting to the firm.