Hill Brothers Chemical Co. V. Grandinetti

This consolidated appeal illustrates some of the frustrating procedural problems that a contractor's creditor may face in a race-to-judgment situation under A.R.S. § 32-1152 D. Western Casualty and Surety Company (Western Casualty) filed this interpleader action on August 24, 1976. Named as defendants were various creditors of Morley Swimming Pool Construction, Inc. (Morley). The defendants included the appellant, Hill Brothers Chemical Company (Hill Brothers), and the appellees in 1 CA-CIV 3801, who are referred to herein as Grandinetti and Encinas. Western Casualty's complaint alleged that it was the surety on Morley's $10,000 contractor's license bond that had been filed with the Registrar of Contractors pursuant to A.R.S. § 32-1152. It further alleged that Morley had ceased business on August 6, 1976, leaving unpaid numerous suppliers of labor and materials who now had claims against the surety bond. The complaint requested that the court determine the respective rights of Morley's creditors to the bond proceeds. With the filing of the complaint Western Casualty deposited into court the full penal sum of the bond.