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 Texas, when there is a dispute over funds or property held by a third party not involved in the dispute, the third party can use an interpleader action to deposit the disputed assets with the court. This legal process allows the court to hold the funds or property in its registry while the dispute is resolved. The Texas Rules of Civil Procedure provide the framework for interpleader actions, which are designed to protect stakeholders from multiple liabilities and lawsuits over the same property or funds. By filing an interpleader, the stakeholder acknowledges that there is a dispute but does not take a position on who is entitled to the assets. The court then notifies the claimants, who must then litigate or settle their claims to the court-held assets. The stakeholder may be discharged from further liability regarding the disputed assets once the funds or property are deposited with the court.
