AMERICAN CONTRACTORS INDEMNITY COMPANY, A CALIFORNIA CORPORATION vs ANCHORED TINY HOMES INCORPORATED, et al.

25CV007688: AMERICAN CONTRACTORS INDEMNITY COMPANY, A CALIFORNIA CORPORATION vs ANCHORED TINY HOMES INCORPORATED, et al. 08/24/2026 Hearing on Motion for Order of Discharge, Award of Costs and Attorney's Fees, for Deposit, and for Dismissal in Department 8C

Tentative Ruling

NOTICE:

PLEASE TAKE NOTICE that any oral arguments regarding this tentative ruling will be heard at 1:30 p.m. in Department 8C in the Tani G. Cantil-Sakauye Courthouse at 500 G Street, Sacramento, CA, the Hon. Richard C. Miadich presiding.

Any party who wishes to contest the tentative ruling below must:

(1) request a hearing by calling the Law and Motion Oral Argument Request Line for Department 8C at (916) 874-8380, by 4:00 p.m. the Court day before the noticed hearing date, and leave a voicemail message (a) identifying themselves as the party requesting oral argument; (b) indicating the specific matter/motion for which they are requesting oral argument; and (c) confirming that they have notified the opposing party of their intention to appear; and

(2) advise the opposing party of the location and time of hearing pursuant to Local Rule 1.06.

If a hearing is not requested by 4:00 p.m. on the Court day before the noticed hearing date, the tentative ruling will become the final order of the Court.

If a hearing is requested, the Court prefers in-person attendance by the parties. However, parties may appear by Zoom unless the Court specifically orders in-person attendance. Parties choosing to appear by Zoom are reminded, however, that a Zoom appearance is still a formal appearance before the Court. Parties appearing via Zoom should do so from a quiet location, free from undue distractions, and wear attire suitable for an in-person court appearance.

The parties may join the Zoom session for hearing on the tentative ruling by audio and/or video through the following link:

https://saccourt-ca-gov.zoomgov.com/j/16039062174

SIP Address:

16039062174@sip.zoomgov.com

25CV007688: AMERICAN CONTRACTORS INDEMNITY COMPANY, A CALIFORNIA CORPORATION vs ANCHORED TINY HOMES INCORPORATED, et al. 08/24/2026 Hearing on Motion for Order of Discharge, Award of Costs and Attorney's Fees, for Deposit, and for Dismissal in Department 8C

(833) 568-8864

ID: 16039062174

Parties requesting services of a court reporter will need to arrange for private court reporter services at their own expense, pursuant to Government code §68086 and California Rules of Court, Rule 2.956. Requirements for requesting a court reporter are listed in the Policy for Official Reporter Pro Tempore available on the Sacramento Superior Court website at https://www.saccourt.ca.gov/court-reporters/docs/crtrp-6a.pdf. Parties may contact Court- Approved Official Reporters Pro Tempore by utilizing the list of Court Approved Official Reporters Pro Tempore available at https://www.saccourt.ca.gov/court-reporters/docs/crtrp- 13.Pdf

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list.

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will be forward the form to the Court Reporter’s Office and an official reporter will be provided.

TENTATIVE RULING

***NOTICE: EFFECTIVE APRIL 13, 2026, THIS DEPARTMENT HAS MOVED TO THE TANI G. CANTIL-SAKAUYE COURTHOUSE LOCATED AT 500 G STREET SACRAMENTO, CA. ALL MOTIONS NOTICED FOR DEPARTMENT 28 WILL BE HEARD IN DEPARTMENT 8C OF THE NEW COURTHOUSE. ALL PAPERS FOR THIS DEPARTMENT MUST BE FILED AT THIS NEW LOCATION AND WILL NOT BE ACCEPTED AT THE HALL OF JUSTICE. ALL HEARINGS WILL TAKE PLACE AT THIS NEW LOCATION***

Plaintiff American Contractors Indemnity Company’s (“Plaintiff”) motion for an order of discharge is ruled upon as follows.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV007688: AMERICAN CONTRACTORS INDEMNITY COMPANY, A CALIFORNIA CORPORATION vs ANCHORED TINY HOMES INCORPORATED, et al. 08/24/2026 Hearing on Motion for Order of Discharge, Award of Costs and Attorney's Fees, for Deposit, and for Dismissal in Department 8C

The notice of motion does not provide notice of the Court’s tentative ruling system, as required by Local Rule 1.06. Moving counsel is directed to contact the opposing parties and advise of Local Rule 1.06 and the Court’s tentative ruling procedure and the manner to request a hearing. If moving counsel is unable to contact the opposing parties prior to the hearing, moving counsel is ordered to appear at the hearing by Zoom or in person.

Background

This is an interpleader action arising from two separate Contractor License Bonds issued by Plaintiff to Defendant Anchored Tiny Homes Incorporated (“ATHI”) pursuant to sections 7071.5 through 7071.11 of the Business and Professions Code. The Complaint was filed on March 28, 2025 and alleges an interpleader cause of action and an injunctive relief cause of action for each bond, for a total of four causes of action. The Complaint names ATHI, Anchored Tiny Homes LLC, and a slew of individual potential claimants. All defendants have been dismissed except for pro per Defendants MAJ Steve Sonza (RET) (“Sonza”), Kevin Lee Baker (“Baker”), Lara Zanzucchi (“Zanzucchi”), and Madhu (Madhusudan) Bangalore (“Bangalore”) (collectively, “Defendants”).

The penal sum of each bond is $25,000.00. Via this motion, Plaintiff seeks an order discharging Plaintiff from all liability arising out of the issuance of the bonds and dismissing Plaintiff from this action without prejudice upon the deposit of $20,000.00 from each bond’s penal sum with the Clerk of the Court, for a total of $40,000.00, to be distributed pursuant to the interpleader action. Plaintiff also seeks attorney’s fees and costs in the amount of $5,000.00 from each bond, for a total of $10,000.00.

Sonza has filed an opposition to the motion that challenges amount of attorney’s fees requested. Sonza does not object to Plaintiff’s motion to the extent it seeks a discharge of liability, a dismissal, or an order to deposit funds with the Clerk.

Discussion

Code of Civil Procedure section 386(b) states:

Any person, firm, corporation, association or other entity against whom double or multiple claims are made, or may be made, by two or more persons which are such that they may give rise to double or multiple liability, may bring an action against the

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV007688: AMERICAN CONTRACTORS INDEMNITY COMPANY, A CALIFORNIA CORPORATION vs ANCHORED TINY HOMES INCORPORATED, et al. 08/24/2026 Hearing on Motion for Order of Discharge, Award of Costs and Attorney's Fees, for Deposit, and for Dismissal in Department 8C

claimants to compel them to interplead and litigate their several claims.

When the person, firm, corporation, association or other entity against whom such claims are made, or may be made, is a defendant in an action brought upon one or more of such claims, it may either file a verified cross-complaint in interpleader, admitting that it has no interest in the money or property claimed, or in only a portion thereof, and alleging that all or such portion is demanded by parties to such action, and apply to the court upon notice to such parties for an order to deliver such money or property or such portion thereof to such person as the court shall direct; or may bring a separate action against the claimants to compel them to interplead and litigate their several claims.

The action of interpleader may be maintained although the claims have not a common origin, are not identical but are adverse to and independent of one another, or the claims are unliquidated and no liability on the part of the party bringing the action or filing the cross-complaint has arisen. The applicant or interpleading party may deny liability in whole or in part to any or all of the claimants. The applicant or interpleading party may join as a defendant in such action any other party against whom claims are made by one or more of the claimants or such other party may interplead by cross-complaint; provided, however, that such claims arise out of the same transaction or occurrence.

(Code Civ. Proc. § 386(b).)

The Court agrees that this interpleader action has been properly brought, since Defendants have competing claims on the bonds, thereby giving rise to multiple liability against Plaintiff. Thus, Plaintiff is entitled to an order discharging it from liability and dismissing it from this action upon deposit of the funds with the Clerk.

Attorney’s Fees

Attorney’s fees in an interpleader action are governed by Code of Civil Procedure section 386.6, which states:

A party to an action who follows the procedure set forth in Section 386 or 386.5 may insert in his motion, petition, complaint, or cross complaint a request for allowance of his costs and reasonable attorney fees incurred in such action. In ordering the discharge of such party, the court may, in its discretion, award such party his costs and reasonable attorney fees from the amount in dispute which has been deposited with the court. At the time of final judgment in the action the court may make such further provision for

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV007688: AMERICAN CONTRACTORS INDEMNITY COMPANY, A CALIFORNIA CORPORATION vs ANCHORED TINY HOMES INCORPORATED, et al. 08/24/2026 Hearing on Motion for Order of Discharge, Award of Costs and Attorney's Fees, for Deposit, and for Dismissal in Department 8C

assumption of such costs and attorney fees by one or more of the adverse claimants as may appear proper.

(Code Civ. Proc. § 386.6(a).)

Plaintiff contends that it has incurred $8,322.93 in fees and costs related to Bond A and $6,281.21 related to Bond B. (Kim Decl., ¶ 4.) Plaintiff’s counsel submits billing ledgers detailing the work performed by attorneys on the case. (Kim Decl., Exh. 1.) The hourly rates charged range from $205.00 to $375.00. The claimed hours for Bond A total 31.80, while the claimed hours for Bond B total 23.10. Per the ledger, the fees incurred from Bond A total $8,048.50, with $274.43 in costs, and the fees incurred from Bond B total $5,581.50, with $699.71 in costs.

In his opposition, Sonza contends that the majority of the billed work is not recoverable under Code of Civil Procedure section 386.6 pursuant to the rule articulated in Sweeney v. McClaran (1976) 58 Cal.App.3d 824. Sonza also contends that the 20% depletion of the bonds that would result from the requested fee award is inequitable to claimant homeowners and defeats the purpose of interpleader. Sonza also contends that the costs related to this motion are billed only to Bond A and should not be shared from Bond B. Sonza thus contends that the fee award should be reduced to a total of $2,076.50, representing $1,404.50 from Bond A and $672.00 from Bond B.

Attorney’s fees under section 386.6 “must be limited to those incurred only in pursuit of the stakeholder’s remedy, whether by complaint or cross-complaint.” (Sweeney, supra, 58 Cal.App.3d at p. 830.) In Sweeney, the stakeholder was originally named as a defendant in an action to enforce the stakeholder’s liability on a contractor’s license bond, and the stakeholder initiated the interpleader via cross-complaint in the same action. In a 2-1 decision, the Court of Appeal held it was error for the trial court to award fees under section 386.6 incurred in relation to the stakeholder’s defense of the original action or in pursuit of non-interpleader claims in the cross-complaint, which were for declaratory relief and indemnification. The court concluded:

To the extent that fees were allowed for legal work on the original defense and cross- complaint, the court committed error. Fees incurred for such activities as negotiations, investigation, dispute over validity of claims (or their amount), cross-complaints for affirmative relief, and the like, are not properly allowable under Code of Civil Procedure section 386.6. As above stated, the trial court, in its discretion, may allow only such fees as relate solely to the pursuit of the stakeholder remedy of Code of Civil Procedure

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV007688: AMERICAN CONTRACTORS INDEMNITY COMPANY, A CALIFORNIA CORPORATION vs ANCHORED TINY HOMES INCORPORATED, et al. 08/24/2026 Hearing on Motion for Order of Discharge, Award of Costs and Attorney's Fees, for Deposit, and for Dismissal in Department 8C

section 386 et seq. (including fees incurred to overcome resistance to the remedy).

(Sweeney, supra, at pp. 830-831, fn. omitted.)

Sonza contends that under Sweeney, Plaintiff cannot recover fees for ministerial tasks such as communicating and corresponding with claimants, seeking entries of default, and filing dismissals for claimants who withdrew their claims. However, the Court agrees with Plaintiff’s argument in reply that the rule from Sweeney is not as rigid as Sonza suggests. The issue the majority had with the trial court’s fee award was its blanket inclusion of fees for all work in the action, not just in relation to the pursuit of the interpleader action. This does not mean that a stakeholder is precluded from recovering fees for the ministerial tasks performed in pursuit of the interpleader action.

Sonza’s opposition states

The controlling California authority is Sweeney v. McClaran, 58 Cal.App.3d 824, 830 (1976), which held:

“Interpleader fees, under the statute, must be limited to efforts made in filing the interpleader, defending the status of the moving party as an interpleader if such standing is challenged, and in obtaining a discharge.”

(Opp. p. 3.)

This quote is not found in the Sweeney opinion and appears to have been fabricated by the artificial intelligence (“AI”) system used by Sonza in preparing his opposition. While the Court appreciates Sonza’s transparency in disclosing his use of an AI system, Sonza is admonished for failing to adequately verify the accuracy of the AI system’s work product. The fabricated quote is generally consistent with Sweeney, but it is also more specific than anything the Court of Appeal held, and thus it improperly suggests that fees under section 386.6 are more limited than they actually are. Notably, in the 50 years since Sweeney was published, no published decision has read Sweeney as narrowly as Plaintiff proposes.

Instead, the Court concludes that Plaintiff’s fee request is subject to the same analysis as any other fee request, which is whether the amount claimed represents a reasonable number of hours expended at a reasonable hourly rate. (Bernardi v. County of Monterey (2008) 167 Cal.App.4th 1379, 1393.) The California Supreme Court has further instructed that attorney fee awards

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV007688: AMERICAN CONTRACTORS INDEMNITY COMPANY, A CALIFORNIA CORPORATION vs ANCHORED TINY HOMES INCORPORATED, et al. 08/24/2026 Hearing on Motion for Order of Discharge, Award of Costs and Attorney's Fees, for Deposit, and for Dismissal in Department 8C

“should be fully compensatory.” (Id., citing Ketchum v. Moses (2001) 24 Cal. 4th 1122, 1133.) Thus, an attorney fee award should ordinarily include compensation for all of the hours reasonably spent, including those relating solely to the fee. (Bernardi, supra, 167 Cal.App.4th at p. 1394.)

“[C]ounsels’ time records [should be used] as the starting point for [a court’s] lodestar determination.” (Horsford v. Board of Trustees of CSU (2005) 132 Cal.App.4th 359, 397.) However, “the trial court [is vested] with discretion to decide which of the hours expended by the attorneys were ‘reasonably spent’ on the litigation.” (Meister v. Regents of Univ. of Cal. (1998) 67 Cal.App.4th 437, 449.) “A trial court may not rubberstamp a request for attorney fees, but must determine the number of hours reasonably expended.” (Donahue v.

Donahue (2010) 182 Cal.App.4th 259, 271 [internal quotation marks and citations omitted].) “In evaluating whether the attorney fee request is reasonable, the trial court should consider whether the case was overstaffed, how much time the attorneys spent on particular claims, and whether the hours were reasonably expended.” (Morris, supra, 41 Cal.App.5th at p. 38 [internal quotation marks and citations omitted].) “Reasonable compensation does not include compensation for padding in the form of inefficient or duplicative efforts.” (Ibid. [internal quotation marks and citations omitted].)

“Reasonable hourly compensation is based on ‘prevailing hourly rates’ in the community, thereby ‘anchoring the calculation’ to an objective standard. [Citation.]” (Reynolds, supra, 47 Cal.App.5th at p. 1112.) However, “[i]n making its calculation of a reasonable hourly rate, the court may rely on its own knowledge and familiarity with the legal market, as well as the experience, skill, and reputation of the attorney requesting fees, the difficulty or complexity of the litigation to which that skill was applied, and affidavits from other attorneys regarding prevailing fees in the community and rate determinations in other cases.” (Morris v. Hyundai Motor America (2019) 41 Cal.App.5th 24, 34 [internal quotation marks, citations, and alterations omitted].)

As Plaintiff notes in reply, Sonza does not challenge Plaintiff’s counsel’s hourly rates. Thus, the Court finds the rates charged to be reasonable. Of the time entries challenged by Sonza, the only one that is potentially unreasonable is the 3.40 hours billed on March 20, 2025 by an attorney identified as “SL” at $300.00 per hour for work described as, “Conducted a claims analysis.” (Kim Decl., Exh. 1, p. 1.) This entry is vague, and under Sweeney, fees are not recoverable for work assessing the validity of claims. (Sweeney, supra, 58 Cal.App.3d at pp. 830-831.) However, eliminating this entry from the ledger still results in incurred fees that exceed the amount requested of $5,000.00 from each bond. The remaining challenged time entries are for ministerial

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV007688: AMERICAN CONTRACTORS INDEMNITY COMPANY, A CALIFORNIA CORPORATION vs ANCHORED TINY HOMES INCORPORATED, et al. 08/24/2026 Hearing on Motion for Order of Discharge, Award of Costs and Attorney's Fees, for Deposit, and for Dismissal in Department 8C

tasks that were reasonably necessary in Plaintiff’s pursuit of the interpleader action.

Regarding Plaintiff’s contention that a 20% depletion of the bonds would be inequitable and inconsistent with the purposes of interpleader, Plaintiff fails to cite any authority establishing the equitable interests that the Court should consider or showing why the requested fees would be inequitable. Code of Civil Procedure section 386.6 expressly allows the recovery of fees and costs in an interpleader action, and nothing in Business and Professions Code sections 7071.5 through 7071.11 limits the surety’s right to recover fees in an interpleader action, despite the relatively common occurrence of claims on contractor license bonds being resolved in interpleader.

Accordingly, the Court finds the requested fees and costs to be reasonable.

Paragraph 9 of Plaintiff’s Proposed Order

Sonza also objects to paragraph 9 of Plaintiff’s proposed order, which states, “In the event the Court does not order any disbursement or otherwise merely orders a partial disbursement of the Bond A’s penal sum of $20,000.00 or Bond B’s penal sum of $20,000.00 to the claimants, the balance of monies held by this Court shall be returned to ‘American Contractors Indemnity Company.’” (Plaintiff’s Proposed Order, ¶ 9.) Plaintiff contends that this term is legally improper, but Plaintiff again does not cite any authority supporting this contention.

Even so, the Court finds that paragraph 9 is improper and should not be included in the order. Code of Civil Procedure section 386(c) states, in part: “Any amount which a plaintiff or cross-complainant admits to be payable may be deposited by him with the clerk of the court at the time of the filing of the complaint or cross-complaint in interpleader without first obtaining an order of the court therefor.” (Code Civ. Proc. § 386(c), emphasis added.) By depositing funds with the Clerk, Plaintiff is admitting that the funds are payable to the claimants, and in exchange Plaintiff receives the benefit of a discharge of any liability on claims to the interpleaded funds. (See Dial 800 v.

Fesbinder (2004) 118 Cal.App.4th 32, 43 [“Upon an admission of liability and deposit of monies with the court, the plaintiff may be discharged from liability and dismissed from the interpleader action”].) Plaintiff has not cited any authority showing it is entitled to any residual funds, particularly in the face of Code of Civil Procedure section 386(c).

Disposition

Plaintiff’s motion is GRANTED.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV007688: AMERICAN CONTRACTORS INDEMNITY COMPANY, A CALIFORNIA CORPORATION vs ANCHORED TINY HOMES INCORPORATED, et al. 08/24/2026 Hearing on Motion for Order of Discharge, Award of Costs and Attorney's Fees, for Deposit, and for Dismissal in Department 8C

The Clerk is instructed to strike paragraph 9 from Plaintiff’s proposed order. The Court will sign the proposed order with paragraph 9 stricken.