In rare circumstances, you can be brought into court without being a traditional plaintiff or defendant. With an interpleader action, a third party may cause litigation to be initiated between two (2) or more claimants to resolve a dispute. There are two (2) basic substantive requirements for a party to initiate an interpleader: (1) that persons have claim(s) against the party seeking the interpleader and (2) that those claims are of such nature that the party may be exposed to double or multiple liability. State ex rel. Creswell v. Scott, 491 S.W.2d 343, 345 (Mo. Ct. App. 1973).
Procedurally, an interpleader involves two (2) successive litigations. First, the court determines whether the requirements for the party seeking an interpleader have been met. Amwest Sur. Ins. Co. v. Stamatiou, 996 S.W.2d 708, 712 (Mo. Ct. App. 1999). The main point in the first phase is to determine whether an interpleader is appropriate for the party seeking interpleader and it is fair and reasonable for the rival claimants. Id. Second, assuming the requirements in step one are met, the claims and disputes between the two (2) rival claimants are disposed of by the court Id. From there, the court will enter an order and judgment and discharging the party that requested the interpleader from further liability.
By far the most common circumstance involving an interpleader is earnest money in a real estate transaction (residential or commercial). It is common practice for the purchaser in a real estate transaction to advance some funds at the beginning of the transaction to demonstrate his/her good faith. Those funds are usually held in escrow by a title company and are often applied to the closing costs when the transaction is completed. If, however, the transaction falls through, the buyer, seller or a combination of the two (2) may be entitled to the earnest money depending on the reason the contract fell through. If the dispute cannot be resolved, a title company may initiate an interpleader to get the money off their books and to force the parties to the real estate contract to resolve the dispute.
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