Which court action is used when a broker does not claim any rights to the escrow deposit under dispute and funds are turned over to the registry pending settlement?

• A. Bill of interpleader
• B. Declaratory decree
• C. Mediation
• D. Arbitration

Answer: (A)

Interpleader is used when a person who holds money or property isn’t asserting a claim to it but there are competing claims to the same asset. In an escrow situation, the broker has the funds but there’s a dispute over who should receive them, and the broker does not claim the funds themselves. By filing a bill of interpleader, the broker asks the court to step in, deposit the escrow money with the court’s registry, and resolve who among the claimants is entitled to the funds. This protects the broker from multiple liability and avoids favoritism, because the court will determine the rightful owner and issue a distribution order.

Declaratory decree, on the other hand, simply clarifies rights and duties under a contract or statute without necessarily directing the disposition of disputed funds. Mediation and arbitration are alternative dispute resolution methods that occur outside court proceedings and do not involve depositing the disputed funds with a registry to be held while the dispute is settled.