[WSBARP] Earnest Money Interpleader Question

[Eric Lanza]

I am in a similar situation, and recently received some insight from the attorney for the escrow company as to how the interpleader process plays out. Here is my understanding of the process after speaking with the escrow company's attorney.

An interpleader action proceeds in two stages:
1) determining the propriety of interpleading adverse claimants to a fund held by a disinterested stakeholder, and discharging the stakeholder; and
2) equitably dispensing the fund among the claimants.

The complaint in interpleader filed by the stakeholder, setting forth its request to be discharged from liability in connection with a fund subject to adverse claims, is relevant only to the first stage of the proceeding.

The nature of claims against the fund--determined in the proceeding's second stage--is controlled by the answers filed by the claimants.

The answer should include a cross-claim against the other named defendant. The cross claim against the co-defendant requests that the earnest money be released to your client, and cites the reasons why your client is entitled to earnest money.

The case is ultimately adjudicated (and funds released) upon resolution of the cross claim(s).


Eric J. Lanza, J.D.
[Logo Color 946x243 pixels]
1800 Cooper Point RD SW NO. 8  |  Olympia, WA 98502
Telephone 360.352.1970  |  Fax 360.357.0844 |  www.jaglaw.net<http://www.jaglaw.net/>
eric at jaglaw.net<mailto:eric at jaglaw.net>

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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Wesley C. McMahon
Sent: Thursday, September 13, 2018 9:39 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] Earnest Money Interpleader Question

Every earnest money dispute I've been involved with was settled prior to being sent to interpleader...until now.  I was wondering if someone out there has experience with the process of an interpleader action pertaining to an earnest money dispute.

I understand the escrow company is the plaintiff, and the buyer and seller are the defendants in the initial interpleader action.  Is the case then completely adjudicated in that action, or is another complaint by the buyer/seller necessary to adjudicate disposition of funds?

Wesley C. McMahon
Partner
Moultray & McMahon, PS
www.Moultray.com<http://www.moultray.com/>
11661 SE 1st Street
Suite 201
Bellevue, WA 98005
Phone: 206-777-1435
E-Mail: Wes at Moultray.com<mailto:Wes at Moultray.com>

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