When there is a dispute over money (funds) or property, and the money or property is held by a person or entity who is not a party to the dispute—such as an insurance company in possession of insurance proceeds or a payment due a business under a contract in which a former employee or business partner claims an ownership interest—the party holding the disputed funds or property may place it in the registry of the court (by filing an interpleader action) and allowing the court to safeguard the funds or property until it determines the rightful owner.
In Washington State, when there is a dispute over funds or property that is held by a third party not involved in the dispute, the third party can use a legal process called 'interpleader' to avoid liability and to have the court determine the rightful owner. This is often used by insurance companies, banks, or other entities that hold assets which are claimed by multiple parties. By filing an interpleader action in the appropriate court, the entity can deposit the disputed funds or property with the court, known as placing it in the 'registry of the court.' The court then holds the funds or property in trust while the dispute is resolved. This process ensures that the third party is protected from multiple liabilities and that the funds or property are distributed according to the court's determination of rightful ownership. The specific procedures and requirements for filing an interpleader action in Washington are governed by state statutes and court rules.