Moody and Shea, P.A.

What is an Interpleader Lawsuit?

In the event there is a dispute between lienors as to amounts due, or yet to become due, them, the owner, or any other person holding funds for the improvement, has the right to file an interpleader lawsuit, wherein the funds are deposited with the court and the disputing parties then fight among themselves for the funds. If the interpleader is allowed by the court, the owner is then dismissed as a party, and the real property is free and clear of the liens after the funds are deposited in the court registry. One of the possible risks inherent in the interpleader procedure is that the lienor’s right to recover its attorney’s fees as the prevailing party in a lien foreclosure lawsuit may be effectively lost. This would happen when the owner, the party against whom attorney’s fees are recoverable in a successful lien foreclosure lawsuit, is dismissed as a party upon the deposit of the funds into the court registry. Then, the competing claimants do not have a claim against the real property after the dismissal of the owner.

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DISCLAIMER AND CAUTION: THESE MATERIALS ARE PROVIDED FOR GENERAL INFORMATIONAL PURPOSES ONLY AND ARE NOT INTENDED NOR SHOULD THEY BE CONSTRUED AS LEGAL ADVICE AS TO ANY PARTICULAR SET OF FACTS OR CIRCUMSTANCES. DUE TO THE COMPLEXITY OF THE CONSTRUCTION LIEN LAW STATUTES AND THE CASES INTERPRETING AND APPLYING THE STATUTES, IT IS RECOMMENDED THAT COMPETENT LEGAL COUNSEL BE CONSULTED IN REGARD TO ANY QUESTIONS AS TO THE APPLICABILITY OF CONSTRUCTION LIEN LAW TO ANY SET OF PARTICULAR FACTS.

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