Does interpleader immunity bar all claims against escrow agents? Old Republic v. Cap Fund 783 Explained

In Old Republic v. Cap Fund 783, the Utah Court of Appeals addressed the scope of interpleader immunity and its application to claims against escrow agents, providing important guidance for practitioners handling escrow disputes.

Background and Facts

Matt Baker entered into complex real estate transactions on behalf of Cap Fund 783 LLC, with Old Republic National Title Insurance Company serving as the escrow agent. When confusion arose about whether Matt or his brother Shane was entitled to $708,800 in escrowed assignment fees, Old Republic interpleaded the funds with the district court. Matt then filed counterclaims against Old Republic alleging breach of fiduciary duties, negligence, tortious interference, and civil conspiracy. The district court granted summary judgment to Old Republic on all claims, finding them barred by interpleader immunity or lacking merit.

Key Legal Issues

The primary issues were whether interpleader immunity barred Matt’s original claims against Old Republic and whether his additional claims for tortious interference and civil conspiracy could survive summary judgment. The court also addressed the proper application of the Bad Faith Statute for attorney fee awards.

Court’s Analysis and Holding

The Court of Appeals reversed the summary judgment on Matt’s original claims, holding that interpleader immunity does not apply when claims allege wrongdoing beyond merely interpleading funds and seek damages beyond the interpleaded amount. Old Republic conceded at oral argument that immunity did not bar claims alleging it caused the ownership dispute and miscalculated the escrowed funds. For the tortious interference claim, the court found that Old Republic owed Matt a duty as an escrow agent since he was an “intended beneficiary” of the transaction under Orlando Millenia. However, the court affirmed summary judgment on the civil conspiracy claim because Matt failed to adequately brief the issue on appeal.

Practice Implications

This decision clarifies that interpleader immunity has meaningful limits and does not provide blanket protection to escrow agents. When challenging such immunity, practitioners should specifically plead misconduct independent of the interpleader decision and seek damages beyond the interpleaded funds. The ruling also reinforces that escrow agents owe duties to all intended beneficiaries of a transaction, not just the named parties to the escrow agreement.