Interpleader and how it can help your company avoid conflicting claims and liability

Interpleader and how it can help your company avoid conflicting claims and liability

If you work as inhouse counsel for a company that handles money or property for others, you can often face a situation where you receive conflicting requests for said property. Be it a bank, insurance company, or other financial institution, it is important to know what to do if you are receiving conflicting requests for the same property.  If multiple parties are making claim to the same property and there is doubt about who this property goes to, you should not simply choose someone to award the money to.  If you do this, your office could face liability to the other parties if it is determined that they were in fact the proper owners of the property.

If it cannot be easily determined who the true owner of the property is, the next step taken by your organization is to file a Complaint for Interpleader.  This should be filed in the county where the money is being held.  Your complaint will be brought under 735 ILCS 5/2-409.  You will lay out the facts resulting in the disputed property, making it clear to the Court that your client has no interest in the property themselves, and your prayer for relief will request that you or your client be allowed to deposit the money with the Court and then be dismissed from the matter.

Once a Complaint for Interpleader is brought, the trial court will determine if there is indeed a conflict between the requests.  If it is agreed by the Court that there is a reasonable dispute over who is the proper owner, they will grant the request for interpleader and the Court will take possession of the disputed property.  Upon the deposit of the funds or property with the Court, you or your client will be dismissed from the matter.  From there, the disputing parties will have their arguments heard by the Court as to why they are the proper owners.  The Court will then make a decision as to who is entitled to the money and award possession.

Regardless of who is inevitably awarded the money, filing your Complaint for Interpleader is how you or your company can avoid liability to conflicting parties.  Leave the decision making in the Court’s hands and avoid making that decision yourself if it is not a clear choice.

If you work for, or operate, a company that is currently facing multiple requests for the same property and want to consider filing for Interpleader, consider contacting the offices of Andrew Szocka P.C. at 815-455-8430 or by emailing us at info@szocka.com.

 

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