Bunker Hill Apartments, LLC vs. GMS Group Inc.

suggests that Defendant was not interested in meaningfully mediating at all, but rather, sought mediation to delay the case. However, indicating a willingness to voluntarily mediate on a CMC is not grounds for sanctions. Also, the Stipulations and Orders herein indicate a need for discovery, not a need to complete mediation, as the basis for trial continuance. (See ROAS 34, 44.)

Defendant to give notice.

12 Bunker Hill Motion for Order to Deposit Escrow Funds with the Apartments, LLC vs. GMS Group Court Inc. Plaintiffs Bunker Hill Apartments LLC and Tony 25-01505195 Holder (“Plaintiffs”) move for an order directing that escrow funds currently held by La Costa Escrow, Inc. (“La Costa”) in the amount of approximately $958,843.27 be deposited with the Clerk of the Orange County Superior Court.

Plaintiffs’ Notice of Motion references Code of Civil Procedure sections 386, 386.1, and 386.5, which are interpleader statutes. Section 386.5 provides that a mere stakeholder may apply to the Court for an order discharging him or her from liability upon deposit with the Clerk of the Court the amount in dispute. These sections do not apply, as Plaintiffs are not the stakeholders here.

Plaintiffs also move pursuant to Code of Civil Procedure section 572. That section provides:

When it is admitted by the pleadings, or shown upon the examination of a party to the action, that he or she has in his or her possession, or under his or her control, any money or other thing capable of delivery, which, being the subject of litigation, is held by him or her as trustee for another party, or which belongs or which is due to another party or which should, under the circumstances of the case be held by the court pending

final disposition of the action, the court may order the same, upon motion, to be deposited in court or delivered to such party, upon those conditions that may be just, subject to the further direction of the court.

This action involves the sale of real property by Plaintiffs to GMS Group Inc. (“GMS”). Plaintiffs allege that they relied upon a fabricated proof of funds in accepting GMS’s purchase offer, but after GMS failed to close escrow, Plaintiffs lawfully canceled the purchase agreement.

Plaintiffs argue that the escrow funds currently held by La Costa in the amount of approximately $958,843.27 should be deposited with the Court because La Costa is facing conflicting demands on the funds, the funds were tendered after default and cancellation, and the underlying sale was induced by fraud. Plaintiffs argue that they are not seeking a prejudgment writ of attachment, and they are instead seeking to preserve the specific subject matter of this dispute.

The Court finds that Plaintiffs’ arguments have no merit. Under section 572, it is not enough that a stakeholder be facing conflicting claims to funds to support an order to deposit the funds with the Court. Instead, Plaintiffs must show that La Costa is holding the funds as trustee for another party, the funds are due to another party, or the funds should under the circumstances be held by the Court pending final disposition of the action. Plaintiffs have set forth no evidence showing that La Costa is acting as any party’s trustee.

Further, Plaintiffs have not demonstrated that the funds are due to them or any other party. The purchase agreement attached to the Complaint provides that Plaintiffs as the sellers have the right to cancel but also provides that they “shall authorize the return of Buyer’s deposit, except for fees incurred by Buyer.” Thus, to the extent Plaintiffs’ Motion is based on their own entitlement to the funds held by La Costa, they have

failed to carry their burden. Moreover, the fact that Plaintiffs claim over $1.27 million in documented losses unrelated to the escrow funds does not support their Motion, as Plaintiffs impliedly concede that such damages cannot be the basis for deposit of the funds held by La Costa.

While the circumstances of this action may warrant the funds being held by the Court pending final disposition of the action, the issue is more suited for disposition pursuant to La Costa’s motion to interplead the funds, which was filed on May 8, 2026, as La Costa is the party with actual standing under the interpleader statutes.

Based on all the above, the Motion is DENIED.

Moving party to give notice