Ameriprise Financial Services LLC v. Roskelley

• Court: District Court, D. Arizona
• Decided: August 13, 2025
• Docket: 2:25-cv-00455
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Ameriprise Financial Services LLC, No. CV-25-00455-PHX-SMB

10 Plaintiff, ORDER

11 v.

12 Jared Bryce Roskelley, et al.,

13 Defendants. 14 15 Pending before the Court is Defendants Jared Roskelley, Matthew Tinyo, and Kyle 16 Robertson (the “Individual Defendants”) Application for Attorneys’ Fees (Doc. 37). 17 Plaintiff Ameriprise Financial Services LLC has filed a response brief (Doc. 38) and the 18 Individual Defendants have filed their reply brief (Doc. 39). Having reviewed the parties’ 19 briefs and the applicable law, the Court will deny the Individual Defendants’ Application 20 for Attorneys’ Fees. 21 I. BACKGROUND 22 This case arises out of the Individual Defendants transition from employment with 23 Ameriprise to its competitor, Defendant LPL Financial Services. (See Doc. 34 (setting 24 forth the background of this case); Doc. 1 (Complaint).) Ameriprise sought a temporary 25 restraining order and preliminary injunction against the Individual Defendants and LPL 26 stemming from their alleged solicitation of Ameriprise clients and retention and use of its 27 information. (See generally Doc. 1; Doc. 2; Doc. 3.) There, Ameriprise premised its 28 entitlement to relief on contract claims for alleged breaches of restrictive covenants in the 1 Individuals Defendants’ employment agreements and other tort-based claims. (See 2 generally Doc. 1.) 3 Under the Financial Industry Regulatory Authority (“FINRA”) rules, the parties 4 submitted their case to arbitration to determine whether a permanent injunction should 5 issue. Prior to that decision, Ameriprise proceeded under FINRA Rule 13804 to request a 6 temporary restraining order from this Court during the interim. (Doc. 2; Doc. 3.) Whether 7 the Court should issue that relief was the sole focus of the parties’ dispute. In denying 8 Ameriprise’s request, the Court generally found that it failed to tailor arguments to 9 particular claims and further failed to tie those claims to relevant evidence for particular 10 defendants. (See generally Doc. 34.) With arbitration set to resolve the parties’ remaining 11 disputes, the case was terminated. (Id.) The Individual Defendants proceeded to file their 12 Application for Attorneys’ Fees under Arizona Revised Statute § 12-341.01, which 13 generally permits an award of fees where a party is successful in any contested action 14 arising out of contract, i.e., their employment agreements. Ariz. Rev. Stat. § 12-341.01(A). 15 II. ATTORNEYS’ FEE AWARD 16 In federal cases where the controlling substantive law is state law, such as diversity 17 cases, attorneys’ fees may be awarded under state law. Rindlisbacher v. Steinway & Sons 18 Inc. (Rindlisbacher I), No. CV-18-01131-PHX-MTL, 2021 WL 2434207, at *2 (D. Ariz. 19 May 26, 2021), aff’d sub nom. Rindlisbacher v. Steinway, Inc. (Rindlisbacher II), No. 20 20-17331, 2021 WL 6067258 (9th Cir. Dec. 20, 2021). The parties seeking an award of 21 attorneys’ fees must show they are (1) eligible for an award, (2) entitled to an award, and 22 (3) that the amount sought is reasonable. LRCiv 54.2(c). The parties first dispute what 23 state’s law applies. (Doc. 38 at 3–4; Doc. 39 at 2–3.) 24 The Individual Defendants’ employment agreements provide: “The provisions of 25 this agreement shall be governed by and construed in accordance with the laws of the state 26 of Minnesota, without reference to the principles of choice of law thereof.” (See, e.g., Doc. 27 1-5 at 5.) Ameriprise contends that this provision precludes an award of attorneys’ fees 28 under Arizona Revised Statute § 12-341.01, the Individual Defendants did not move under 1 any other authority, and Minnesota law does not permit similar awards. (Doc. 38 at 3–4.) 2 The Individual Defendants argue that Ameriprise should be judicially estopped from 3 altering its position regarding what law governs the parties’ dispute. (Doc. 39 at 2–3.) 4 The Court begins with whether judicial estoppel is warranted. Judicial estoppel is 5 an equitable doctrine that precludes a party from gaining an advantage by asserting one 6 position, and then later seeking an advantage by taking a clearly inconsistent position. 7 Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778, 782 (9th Cir. 2001). The doctrine 8 prevents a party from “playing fast and loose with the courts by asserting inconsistent 9 positions.” United States v. Kim, 806 F.3d 1161, 1167 (9th Cir. 2015) (citation modified). 10 In determining whether judicial estoppel is warranted, courts evaluate three factors: 11 (1) a party’s later position must be clearly inconsistent with its earlier position; (2) whether the party succeeded in its prior position, because absent 12 success in a prior proceeding, a party’s later inconsistent position introduces no risk of inconsistent court determinations; and (3) whether the party 13 seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped. 14 15 Id. (citation modified). These factors are not an exhaustive formula that precludes 16 additional considerations, rather they merely inform the determination. New Hampshire v. 17 Maine, 532 U.S. 742, 751 (2001). 18 Here, although Ameriprise cited Arizona cases addressing enforceability of 19 non-solicitation agreements and restrictive covenants, it never specifically argued that 20 Arizona law, rather than Minnesota law, applied. (See generally Doc. 3; Doc. 22; Doc. 21 24.) Nor did the Court make an explicit finding that Arizona law applied. (See generally 22 Doc. 34.) The Individual Defendants, however, posit that this issue was a point of 23 contention between the parties. (Doc. 39 at 2–3.) Not so. First, the Individual Defendants 24 never argued that Minnesota law should apply and cited Arizona law in their response brief 25 opposing issuance of a temporary restraining order. (See generally Doc. 21.) LPL, not the 26 Individual Defendants, noted that the employee agreements are governed by Minnesota 27 law, alluded to the potential application of the wrong state’s law, and in a footnote, reserved 28 the right to argue Minnesota law should apply. (See Doc. 19 at 18–19 & n.17.) Second, 1 as the Court noted previously, LPL is not a party to the employment agreements and 2 Ameriprise asserted claims sounding in tort against LPL. (See Doc. 34 at 5–7.) Finally, 3 neither the Individual Defendants nor Ameriprise ever addressed the applicability of the 4 choice of law provision in briefing the temporary restraining order matter. (See Doc. 21; 5 Doc. 22; Doc. 24.) 6 Even if the Court assumes LPL’s lack of conviction in raising the issue and 7 Ameriprise relying on Arizona cases without taking a direct stance on what law applies 8 justifies the Court finding that Ameriprise’s position is now “clearly” inconsistent with its 9 prior position, Ameriprise did not benefit from that position. The Court denied the request 10 for a temporary restraining order. Therefore, the second factor does not weigh in favor of 11 estoppel. Additionally, as it relates to the third factor, there is no unfair detriment. Had 12 Ameriprise argued under Minnesota law—which the Individual Defendants argue it would 13 have fared no better, (see Doc. 39 at 2 n.1)—there is no dispute that Arizona Revised 14 Statute § 12-341.01 would not have applied given the choice of law provision in the 15 employment agreements pointing to Minnesota law. In other words, had Ameriprise 16 proceeded under Minnesota law and the Court’s ultimate conclusion remained the same, 17 or even if the Court granted the temporary restraining order, the Individual Defendants 18 would have had no avenue to an award of attorneys’ fees under § 12-341.01. This is to 19 say, while the Individual Defendants may suffer a detriment in paying for their own 20 attorneys’ fees, the Court cannot conclude that any inconsistent position Ameriprise took 21 imposed an unfair detriment based on fees for which the Individual Defendants were not 22 otherwise entitled. See, e.g., Spirit Master Funding IV LLC v. Martinsville Corral Inc., 23 No. CV-14-00720-PHX-GMS, 2016 WL 4877622, at *4 (D. Ariz. Sept. 15, 2016). Thus, 24 in consideration of these factors, the Court finds that judicially estopping Ameriprise from 25 asserting Minnesota law should control is not warranted under the circumstances of this 26 case. 27 Under Minnesota law, recovery of attorneys’ fees must be based on either statute or 28 contract. Kvidera v. Rotation Eng’g & Mrg. Co., 705 N.W.2d 416, 424 (Minn. Ct. App. 1 2005). Arizona follows a similar rule, however, in contrast, it permits an award to a 2 “successful party” in a contested action “arising out of contract.” Ariz. Rev. Stat. 3 § 12-341.01(A). The Court is not aware of, nor have the parties pointed to, a similar statute 4 under Minnesota law. Therefore, the Individual Defendant’s ability to recover depends on 5 what law applies. 6 Where there is a conflict of law in diversity cases, as is the case here, district courts 7 must apply the choice-of-law rules of the state in which it sits. Abogados v. AT&T, Inc., 8 223 F.3d 932, 934 (9th Cir. 2000). This Court sits in Arizona, and therefore Arizona’s 9 choice-of-law rules apply. “In a contract action, Arizona follows the Restatement (Second) 10 of Conflict of Laws (‘Restatement’).” Spirit Master Funding, 2016 WL 4877622, at *2 11 (citing Swanson v. Image Bank, Inc., 77 P.3d 439, 441 (Ariz. 2003)). Because the 12 employment agreements include a choice of law provision, § 187 of the Restatement 13 provides the test for whether the provision is valid and effective. See id. (citation omitted). 14 Under that test, if the “particular issue,” i.e., attorneys’ fees, “is one which the parties could 15 have resolved by an explicit provision in their agreement directed to that issue,” then the 16 provision is valid and effective. See id. (citation omitted). The Court finds no basis to 17 conclude the parties could not have explicitly contracted to address this situation. See id. 18 at *3 (noting Ariz. Rev. Stat. § 12-341.01(A) permits contractual provisions that modify 19 the default rule). Therefore, the Court finds the choice of law provision is valid and 20 effective and calls for the application of Minnesota law. Given this finding, the Court need 21 not reach the remainder of the § 187 test to evaluate whether applying Minnesota law would 22 violate a fundamental policy of Arizona. See Swanson, 77 P.3d at 443–44. 23 As noted, the Individual Defendants only move under Arizona Revised Statute 24 § 12-341.01(A) and have not pointed the Court to any Minnesota law or language in their 25 employment agreements permitting their recovery of attorneys’ fees. This Court has 26 declined to apply § 12-341.01 to award attorneys’ fees where another state’s law governed 27 the parties’ agreement. See, e.g., Frontier Airlines Inc. v. Menzies Aviation (USA) Inc., 28 No. CV-20-01432-PHX-ESW, 2022 WL 103526, at *4 (D. Ariz. Jan. 11, 2022); Aspect 1 Sys., Inc. v. Lam Rsch. Corp., No. CV 06-1620-PHX-NVW, 2009 WL 1390837, at *12 (D. 2 Ariz. May 15, 2009), aff’d in part, 404 F. App’x 136 (9th Cir. 2010); see also 3 Rindlisbacher I, 2021 WL 2434207, at *5 (finding that the choice of law provision in a 4 contract did not preclude an award of attorneys’ fees under § 12-341.01 where only tort 5 claims that arose from a business relationship remained at issue and noting “[i]f the 6 requested fee award instead arose from the [plaintiff’s] breach of contract claim, to which 7 the choice-of-law provision applies, the Court’s conclusion might be different”). 8 To further dispel any potential application of § 12-341.01, the Court is cognizant 9 that a contract governed by non-Arizona law does not necessarily preclude applying the 10 statute. See, e.g., Rindlisbacher v. Steinway & Sons Inc. (Rindlisbacher III), 11 No. CV-18-01131-PHX-MTL, 2021 WL 2334407, at *2 (D. Ariz. June 8, 2021) (citing 12 ZB, N.A. v. Hoeller, 395 P.3d 704, 709 (Ariz. Ct. App. 2017) (finding a unilateral fees 13 provision governed by non-Arizona law did not preclude an award under § 12-341.01 for 14 the party that was not covered by that provision)). But the Arizona Supreme Court has 15 explained that § 12-341.01 “is inapplicable by its terms if it effectively conflicts with an 16 express contractual provision governing recovery of attorney’s fees.” Am. Power Prods., 17 Inc. v. CSK Auto, Inc., 396 P.3d 600, 604 (Ariz. 2017). Additionally, “rather than being 18 completely supplanted by any attorney fee provision in the parties’ contract, the 19 statute—consistent with its plain language—applies to ‘any contested action arising out of 20 contract’ to the extent it does not conflict with the contract.” Id. (quoting § 12-341.01). 21 Permitting an award here would effectively conflict with and rewrite their employment 22 agreements to allow attorneys’ fees that are not permitted under Minnesota law. Therefore, 23 the Individual Defendants have not established that § 12-341.01 applies, and thus the Court 24 will deny their request for attorneys’ fees. 25 … 26 … 27 … 28 … I. CONCLUSION 2 Accordingly, 3 IT IS HEREBY ORDERED denying the Individual Defendants’ Application for 4|| Attorneys’ Fees (Doc. 37). 5 Dated this 13th day of August, 2025. 6 . 7 SO ts g A lonorable Susan M. Brnovich United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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