United States District Court, D. Oregon, Medford Division
OPINION & ORDER
CLARKE, Magistrate Judge.
an interpleader action brought by Plaintiff Hudson Insurance
Company ("Hudson") to resolve competing claims to a
$40, 000 motor vehicle dealer bond held by Hudson on behalf
of Defendant Klamath Superior Motor Company, Inc.
("Klamath"). At issue is how to properly disperse
the bond among the competing claimants.
23, 2017, Hudson, Klamath's surety, posted a $40, 000
motor vehicle bond with the Court on Klamath's behalf.
Hudson alleged that the claimants have or would assert claims
against the bond. The claimants are individuals and
businesses who either placed motor vehicles on consignment
with Klamath to be marketed for sale, entered into purchase
agreements with Klamath to buy motor vehicles, or sold motor
vehicles to Klamath. Each claimant contends Klamath either
failed to pay the amount agreed upon in the consignment
agreement or purchase order or failed to deliver possession
of a motor vehicle after receiving the necessary payment. ORS
§ 822.030 entitles any person to a right of action
against a motor vehicle bond "if the person suffers any
loss or damage by reason of the vehicle dealer's
[Klamath's] fraud, fraudulent representations or
violations of provisions of the vehicle code relating to . .
. [t]he transfer ... of vehicles."
alleged that the aforementioned claims exceeded the value of
the bond, exposing it to multiple and vexatious litigation
unless it was allowed to interplead the disputed funds into
the Registry of the Court for determination of the
claimants' rights. Accordingly, on October 27, 2017,
Hudson moved for a court order requiring the disputed funds
to be deposited with the Registry of the Court, discharging
it from any further liability as to the disputed funds, and
enjoining all parties to this action from commencing any
other action against Hudson concerning the disputed funds.
Hudson also moved for $4, 395.00 in costs and attorney fees
to be paid from the bond proceeds, as well as for an order to
set aside a pro rata share of the interpleaded funds
for Claimant Zachary J. Taylor, who is deployed overseas on
active-duty military service. The parties stipulated to
Hudson's motion, and the Court granted it.
issue is how to disperse the remaining amount of the
deposited funds among the claimants-Dorothy M. Silani, Neil
A. Westfall, Kristi Singleton, Ralph Stearns, Glen R. Sitz,
Zachary J. Taylor, and Meador Motors, Inc. All claimants,
save for Mr. Taylor, have moved for summary judgment; each
asks that the proceeds first be paid on a pro rata
basis to the named claimants who have obtained judgment
against the proceeds. Then, if any balance remains, the
claimants ask that non-consumer creditors who also have
obtained judgment be paid on a pro rata basis, with
any remaining balance then remitted to Hudson. See
Silani & Westfall Mot. for Summ. J. [CM/ECF No. 40.];
Sitz Mot. for Summ. J. [CM/ECF No. 48.]; Stearns Mot. for
Summ. J. [CM/ECF No. 50.]; Meador Motors Mot. for Summ. J.
[CM/ECF No. 52.]; Singleton Mot. for Summ. J. [CM/ECF No.
55.]. No claimant challenges any other claimant's claim
to the deposited funds; in fact, each of the six claimants
who filed for summary judgment attached copies of their
contractual agreements demonstrating their entitlement to a
share of the deposited funds.
judgment shall be granted when the record shows that there is
no genuine dispute as to any material of fact and that the
moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247 (1986). The moving party has the initial
burden of showing that no genuine issue of material fact
exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986); Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th
Cir. 2001) (en banc). The court cannot weigh the evidence or
determine the truth but may only determine whether there is a
genuine issue of fact. Playboy Enters., Inc. v.
Welles, 279 F.3d 796, 800 (9th Cir. 2002). An issue of
fact is genuine "if the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party." Anderson, 477 U.S. at 248.
properly supported motion for summary judgment is made, the
burden shifts to the opposing party to set forth specific
facts showing that there is a genuine issue for trial.
Id. at 250. Conclusory allegations, unsupported by
factual material, are insufficient to defeat a motion for
summary judgment. Taylor v. List, 880 F.2d 1040,
1045 (9th Cir. 1989). Instead, the opposing party must, by
affidavit or as otherwise provided by Rule 56, designate
specific facts which show there is a genuine issue for trial.
Devereaux, 263 F.3d at 1076. In assessing whether a
party has met its burden, the court views the evidence in the
light most favorable to the non-moving party. Allen v.
City of Los Angeles, 66 F.3d 1052, 1056 (9th Cir. 1995).
is a two-stage action. In the first stage, the Court
determines whether interpleader is appropriate, " and in
the second, the Court ascertains the merits of the competing
claims. Williams v. Lincoln Nat'l Life Ins. Co.,
121 F.Supp.3d 1025, 1029 (D. Or. 2015). A statutory
interpleader claim, such as that brought by Hudson, requires
(1) claims to a stake valued at $500 or more; (2) by two or
more claimants of diverse citizenship; and (3) a deposit by
the plaintiff to the stake claimed or a bond to ensure the
plaintiffs compliance with the court order. 28 U.S.C. §
no party disputes that interpleader is appropriate. The
bond-the stake-is valued at $40, 000; two or more claimants
are of diverse citizenship, with claimants residing in Idaho,
Oregon, and Florida; and, finally, Hudson has deposited the
bond with the Registry of the Court. Consequently, the first
stage of interpleader is satisfied. The only issue that
remains is to ascertain the respective rights of the
The claimants' respective rights to the bond
assessing the claimants' competing claims to the bond,
the Court finds that no dispute exists as to each
claimants' right to a share of the bond proceeds, and the
Court holds that the bond should be distributed to the
claimants on a pro rata basis. Funds should be
distributed on a pro rata basis when all claimants
have equal priority to the stake. The case Hebel v.
Ebersole,543 F.2d 14 (7th Cir. 1976) sets forth this
principle clearly and succinctly. Hebel was an
interpleader action involving three claimants seeking to
recover funds held by a bank. Id. at 16. The three
claimants had each sold cattle to the defendant, who
proceeded to consign the cattle to an auctioneer.
Id. The stake consisted of the proceeds of the
auctioneer's sale. Id. The Seventh Circuit
upheld the district court's pro rata
distribution of the funds, noting that "[t]he ...