Legal Definitions - enterpleder

Enterpleder is an older, less commonly used term for interpleader.

Interpleader is a legal procedure that allows a party, often called the "stakeholder," who possesses property, money, or a contractual obligation that is claimed by two or more other parties, to bring all the claimants into court. The stakeholder asks the court to determine who among the claimants has the rightful claim to the disputed item, thereby releasing the stakeholder from potential liability and avoiding the risk of being sued multiple times by different claimants for the same thing. Essentially, the stakeholder is saying, "I have this item, multiple people claim it, I don't know who is right, so please, court, you decide, and remove me from the dispute."

Here are some examples:

• Life Insurance Payout Dispute: Imagine a life insurance company holds a significant payout after a policyholder passes away. The policy states the beneficiaries are "my children." However, the deceased had both biological children and adopted children, and there's a legal dispute among them about whether the adopted children qualify under the policy's specific wording. The insurance company, as the stakeholder, doesn't want to risk paying the wrong group and then being sued by the rightful heirs. Through an interpleader action, the company can deposit the funds with the court and ask the judge to decide which children are the legitimate beneficiaries, thus relieving the company of liability.
• Conflicting Demands on a Bank Account: A bank holds a substantial sum in a joint savings account for a married couple. The couple divorces acrimoniously, and both individuals send separate, conflicting instructions to the bank regarding the entire balance – one demands a full withdrawal, while the other insists the funds be frozen pending a divorce settlement. The bank, caught between these two claimants, faces the risk of being sued by either party if it complies with the other's request. The bank can initiate an interpleader action, depositing the funds with the court and asking the court to determine how the money should be distributed or held, thereby protecting itself from liability.
• Construction Project Retainage: A general contractor has completed a large construction project and is holding a final payment (often called "retainage") that is due to a subcontractor. Before the general contractor can release the funds, two different material suppliers claim that the subcontractor never paid them for materials used on the project and demand that the general contractor pay them directly from the retainage. The subcontractor, meanwhile, is demanding the full retainage payment. The general contractor, as the stakeholder, is unsure who is rightfully owed the money. By filing an interpleader, the general contractor can deposit the retainage with the court and let the court decide which parties are entitled to receive payment, avoiding potential lawsuits from all three claimants.