1. Interpleader Actions
§ 22-3-10 (13) vests the magistrate courts with jurisdiction to entertain interpleader actions arising from real estate contracts for the recovery of earnest money, only if the sum claimed does not exceed $7,500.00. Generally, interpleader is an equitable remedy in which a person, who owes or is in possession of money or property in which he disclaims any title or interest but which is claimed by two or more persons, prays that the claimants be compelled to state their several claims, so that the court may adjudge to whom the matter or thing in controversy belongs.
§ 22-3-25 is narrowly drawn so that the only interpleader actions available in magistrates court arise when a real estate broker or agent is unable to determine whether the broker or seller is entitled to the return of earnest money, so the broker or agent asks the court to accept the money, dismiss him from the case, and allow the buyer and seller to plead their case to the court.
When an interpleader action is requested, the following directions shall apply. The forms referenced below may be found in the Rules section of this book.
1. Broker or agent, as plaintiff completes the Complaint for Interpleader (SCCA 756) and files the filing fee prescribed by § 22-3-25 ($90 total comprised of the $45 filing fee, $25 proviso fee, and $20 to serve process on two defendants). Complaint should be filed in county where earnest money is present and, if possible, where at least one defendant resides. If both defendants are non-residents of this State, service must be effectuated by certified mail. Be sure real estate contract is attached.
2. Serve defendant/buyer and defendant/seller with a copy of the Complaint, along with the Interpleader Summons (SCCA 757). You may wish to provide the defendant with a blank copy of Answer to Complaint in Interpleader (SCCA 758) at this time so they may complete the form and return it to the court within thirty (30) days.
3. Upon receipt of answers by the court, the judge shall review to determine if interpleader should be ordered. If neither the defendant/buyer nor the defendant/seller have a claim against the plaintiff/broker (agent), the court should accept the earnest money or require the plaintiff to hold the money until further ordered from the court. If there are no further claims against the plaintiff, the court may dismiss the plaintiff as a party to the action. However, the plaintiff may be needed for testimony. Complete Order for Interpleader and Summons for Hearing (SCCA 759). The order and summons should be mailed to the defendant/buyer and defendant/seller. If defendant/buyer or defendant/seller has a claim against plaintiff, all three parties should be summoned to determine the issues.
4. Hold hearing to determine which claimant should receive earnest money. Proof is by the preponderance of the evidence. Both parties should be given an opportunity to present their case. Since this is a matter in equity, parties do not have a right to a jury trial. If requested, costs may be imposed against the losing party and awarded to the plaintiff. Upon determination, court should issue an order granting relief as is appropriate.