NOTICE: NOT FOR PUBLICATION. 

UNDER ARIZ. R. SUP. CT. 111(c), THIS DECISION DOES NOT CREATE LEGAL PRECEDENT 

AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.

IN THE 

ARIZONA COURT OF APPEALS DIVISION ONE

QUICKEN LOAN, INC., a foreign corporation, 

Plaintiff/Appellant, 

v.

WENDY BEALE; LYDIA GARZA; DUSTIN ANDERSEN; COLIN 

KOROLSKY; AYRULA AYRULA; BARON TYLER COX; and WYMAN 

JACOBS, Defendants/Appellees,

LOANDEPOT, Intervenor/Appellee.

No. 1 CA-CV 13-0053 

 

Appeal from the Superior Court in Maricopa County 

CV2011-019793 

The Honorable Katherine M. Cooper, Judge 

AFFIRMED 

COUNSEL 

Littler Mendelson, PC, Phoenix 

By Peter C. Prynkiewicz 

Honigman Miller Schwartz & Cohn, LLP, Detroit, MI 

By Robert J. Muchnick, William D. Sargent 

Co-Counsel for Plaintiff/Appellant 
2 

Schneider & Onofry, PC, Phoenix 

By Luane Rosen, Michelle Swann 

Counsel for Defendants/Appellees

Sherman & Howard, LLC, Phoenix 

By John Alan Doran 

Counsel for Intervenor/Appellee

MEMORANDUM DECISION 

Presiding Judge Patricia A. Orozco delivered the decision of the Court, in 

which Judge Lawrence F. Winthrop and Judge Kenton D. Jones joined. 

O R O Z C O, Judge: 

¶1 Appellant Quicken Loans, Inc. (Quicken Loans) appeals 

from the trial court judgment granting summary judgment in favor of 

Appellees Wendy Beal, Lydia Garza, Dustin Andersen, Colin Korolsky, 

Ayrula Ayrula, Baron Tyler Cox, and Wyman Jacobs (collectively 

Employees), and Intervenor loanDepot (collectively Defendants). Quicken 

Loans also appeals from the trial court’s orders denying Quicken Loans’ 

motion for an evidentiary hearing regarding Defendants’ application for 

attorney fees, and awarding Defendants’ attorney fees and costs. For the 

reasons that follow, we affirm. 

FACTS AND PROCEDURAL HISTORY 

¶2 Employees are former employees of Quicken Loans, who 

subsequently worked for loanDepot. Quicken Loans and loanDepot are 

competitors in the online mortgage industry. As a condition of 

employment at Quicken Loans, all Employees signed an Employment 

Agreement (Agreement), which contained a covenant not to compete1 and 

a covenant not to raid Quicken Loans’ employees, also known as the 

 

1 Quicken Loans has not raised the covenant not to compete clause as 

an issue in this appeal. Therefore, we do not address it. See, e.g., Dawson 

v. Withycombe, 216 Ariz. 84, 100 n.11, ¶ 40, 163 P.3d 1034, 1050 n.11 (App. 

2007) (“By not raising the issue in their opening briefs, Appellants have 

waived [the issue] on appeal.”). 
QUICKEN LOAN v. BEALE, et al 

Decision of the Court 

3 

“Non-Contact Provision” (the Provision). Employees were given the 

Agreement to sign with their new hire paperwork, which included 

documentation such as federal and state tax forms and other forms of that 

nature. 

¶3 The Provision prohibited Employees from communicating 

with current Quicken Loans employees, as well as current employees of 

any of Quicken Loans’ forty associated entities, for two years. The 

Provision also prohibited Employees from communicating with any 

former employees of those forty entities for twelve months after the 

former employees’ employment terminated. Finally, the Agreement 

contained a provision stating, “This Agreement shall be construed in 

accordance with the laws of the State of Michigan.” 

¶4 Quicken Loans, a Michigan corporation, is a national 

company that provides mortgage loans to customers in all fifty states. 

Quicken Loans is a “full-service mortgage banking/personal finance 

company engaged in originating, closing, funding, servicing and 

marketing residential mortgage loans and consumer loans through 

various business channels.” 

¶5 Quicken Loans trains newly hired mortgage bankers to 

ensure their bankers have the proper knowledge and licensing 

requirements to sell mortgages. The training program includes both onthe-job training phases that employees must complete as well as an initial 

eight weeks of classroom training.2 Quicken Loans constantly has new 

employees starting the training program. Therefore, it does not replace 

individual employees as they leave, but always has a pipeline of new 

mortgage bankers entering the various phases of training. Although 

Quicken Loans has stated that it takes approximately nine months for a 

new hire to become productive, that time frame varies depending on 

experience. Quicken Loans paid the costs and fees associated with 

preparing Employees to take both federal and state licensing exams while 

employed at Quicken. Moreover, Quicken Loans paid an additional 

incentive of $1000 per license, up to $10,000, for each state license its 

employees acquired. 

¶6 In its underlying complaint, Quicken Loans alleged, among 

other things, that Employees violated the Provision by communicating 

 

2 The eight-week classroom training program has since been reduced 

to six weeks.
QUICKEN LOAN v. BEALE, et al 

Decision of the Court 

4 

employment opportunities at loanDepot with other Quicken Loans 

employees. Quicken Loans sought injunctive relief and monetary 

damages for the alleged breaches of the Provision. 

¶7 Employees filed a motion to dismiss, arguing that the 

Provision was unreasonable and unenforceable as a matter of law. 

Subsequently, loanDepot filed a motion to intervene, and Quicken Loans 

requested that the trial court grant the motion. After the trial court 

granted the motion to intervene, loanDepot joined Employees’ motion to 

dismiss. The trial court denied the joint motion to dismiss. 

¶8 After conducting discovery, Employees joined loanDepot’s 

motion for summary judgment and individually filed separate statements 

of facts supporting the motion as the allegations related to each 

employee’s involvement. The trial court granted Defendants’ motions for 

summary judgment. The trial court found that the restrictive covenants at 

issue were “overbroad and unreasonably restrictive on the employee.” 

The trial court further noted that Quicken Loans failed to meet its burden 

of proof “establishing a legitimate business interest in these provisions as 

written.” The trial court also declined to amend the Provision as written 

to create enforceable ones, holding that the Provision was not severable 

and was intertwined “with an integral part of overbroad covenants that 

are unenforceable as a matter of law.” 

¶9 As the prevailing parties, the Employees and loanDepot 

applied to recover their costs and attorney fees. Although Quicken Loans 

argued that various individual defendants and loanDepot were not 

entitled to attorney fees, the trial court awarded Employees and 

loanDepot what it determined to be reasonable attorney fees and costs. 

Finally, the trial court found that “[w]hile loanDepot neither asserted nor 

defended a direct claim, [Quicken Loans] – which initiated the lawsuit 

that prompted loanDepot’s intervention – was obligated to pay 

loanDepot’s costs as a successful party under [Arizona Revised Statutes 

(A.R.S.) section 12-341.]” 

¶10 Quicken Loans timely appealed. We have jurisdiction to 

decide this appeal pursuant to Article 6, Section 9, of the Arizona 

Constitution, A.R.S. §§ 12-120.21.A.1 (2003), and -2101.A.1 (Supp. 2013).3

 

3 We cite to the current version of the applicable statutes when no 

material revisions have since occurred. 
QUICKEN LOAN v. BEALE, et al 

Decision of the Court 

5 

DISCUSSION 

I. Non-Contact Provision 

A. Applicable Law 

¶11 The Agreement contained a choice-of-law provision 

selecting Michigan law as the applicable law. Assuming without deciding 

that Michigan law applies, we hold that the Provision is overbroad and 

unenforceable.4

B. Standard of Review 

¶12 We review the trial court’s grant of a summary judgment 

motion de novo. Kosman v. State, 199 Ariz. 184, 185, ¶ 5, 16 P.3d 211, 212 

(App. 2000). In our review, we determine “whether genuine issues of 

material fact preclude summary judgment and whether the trial court 

properly applied the law.” Id.

¶13 In granting summary judgment in favor of Defendants, the 

trial court found that the Agreement was unenforceable as a matter of law 

because the Provision “[was] overbroad with respect to who can be 

contacted, the subject matter of the communications, and the [two-]year 

length of time.” We agree. 

C. The Provision is Unreasonable and Therefore Unenforceable 

as a Matter of Law 

¶14 In its reply brief, Quicken Loans argues that the Agreement 

is reasonable and enforceable under Michigan law when blue-penciled to 

 

4 Arizona has a long-standing policy precluding courts from 

rewriting unenforceable, overbroad restrictive covenants to create new, 

enforceable restrictive covenants. See Orca Commc’ns Unlimited, LLC v. 

Noder, 233 Ariz. 411, 418, ¶ 23, 314 P.3d 89, 96 (App. 2013); see also Valley 

Med. Specialists v. Farber, 194 Ariz. 363, 372, ¶ 31, 982 P.2d 1277, 1286 (1999) 

(“the court cannot create a new agreement for the parties to uphold the 

contract”); Olliver/Pilcher Ins., Inc. v. Daniels, 148 Ariz. 530, 533 P.2d 1218, 

1221 (1986) (“Generally, courts do not rewrite contracts for parties.”). 

Because of this policy, under Arizona law, the Provision would be 

unenforceable.
QUICKEN LOAN v. BEALE, et al 

Decision of the Court 

6 

remove various grammatically severable clauses, resulting in the 

following restrictive covenant: 

2. You agree that for a period of 2 years after your 

termination, resignation, or separation of the employment 

relationship for any reason, you shall not, directly or 

indirectly (whether on your own behalf, working with 

others, or on behalf of any other person, business or entity): 

(a) “Communicate” (as defined in Attachment A) or 

attempt to Communicate with any person employed by or 

under contract with [Quicken Loans] to in any way 

terminate or change his or her employment relationship 

with [Quicken Loans]; and/or 

(b) hire, attempt to hire, employ, offer employment to, 

assist in offering employment to or solicit for purposes of 

employing or obtaining the services of (through any IRS-W2, 

IRS-1099, staffing company, employee leasing, partnership, 

company affiliation or other arrangement) any person 

employed by or under contract with [Quicken Loans]. 

F. “Communicate” -- For purposes of this Agreement, 

“Communicate” includes, but is not limited to, any contact, 

written or oral communication, statements or dialogue with 

a person through any form of communication (whether 

initiated by you or by any other person) in which any part of 

the contact, communication, statement or dialogue, directly 

or indirectly: (c) suggests, asks or induces a person to: (iii) 

conduct business related to Mortgage-Related Products or 

Services with another person, business or enterprise; or (v) 

change or end their employment or business relationship 

with [Quicken Loans]. To “communicate” includes assisting 

or working with others, directly and indirectly, in 

conducting the foregoing activities. 

¶15 Under Michigan law, restrictive covenants are enforceable as 

long as they are reasonable. See Coates v. Bastian Bros., Inc., 276 Mich. App. 

498, 506, 741 N.W.2d 539, 545 (2007). Reasonableness, however, is a factintensive inquiry which requires our evaluation of the totality of the 

circumstances surrounding the agreement. See Cuddington v. United Health 

Servs., Inc., 298 Mich. App. 264, 274, 826 N.W.2d 519, 524 (2012). As the 

party seeking enforcement, Quicken Loans bears the burden of 
QUICKEN LOAN v. BEALE, et al 

Decision of the Court 

7 

demonstrating the validity, and thus enforceability, of the Provision. See 

Coates, 276 Mich. App. at 508, 741 N.W.2d at 545. 

¶16 A restrictive covenant must (1) be reasonable as far as the 

restrictive covenant’s temporal duration, geographical scope, and the type 

of employment or line of business limited by the agreement; (2) be limited 

to protecting an employer’s reasonable competitive business interest; and 

(3) be reasonable as between the parties, and “it must not be . . . injurious 

to the public.” See St. Clair Med., P.C. v. Borgiel, 270 Mich. App. 260, 266, 

269-70, 715 N.W.2d 914, 919, 920-21 (2006); see also Coates, 276 Mich. App. 

at 506-07, 826 N.W.2d at 545. “To the extent any such agreement or 

covenant is found to be unreasonable in any respect, a court may limit the 

agreement in order to render it reasonable in light of the circumstances in 

which it was made and specifically enforce the agreement as limited.” St. 

Clair Med., P.C., 270 Mich. App. at 265, 715 N.W.2d at 918 (quoting Mich. 

Comp. Laws § 445.774a (West 2013)). However, “courts are not to rewrite 

the express terms of contracts.” McDonald v. Farm Bureau Ins. Co., 480 

Mich. 191, 199-200, 747 N.W.2d 811, 817 (2008). 

¶17 “With respect to duration, Michigan courts have not 

provided any bright line rules. Rather they have upheld [restrictive 

covenants] covering time periods of six months to three years.” Certified 

Restoration Dry Cleaning Network, L.L.C. v. Tenke Corp., 511 F.3d 535, 547 

(6th Cir. 2007) (collecting cases) (internal quotation marks omitted). 

Nonetheless, we find the Provision’s two-year time period is unreasonable 

because it is not an attempt to protect Quicken Loans’ proprietary 

information, it is an attempt, rather, to preclude Employees from using the 

skills and knowledge learned at Quicken Loans about the mortgage 

industry. Although longer provisions have been approved, these longer 

periods are generally limited to situations where the restrictive covenant 

was designed to protect proprietary or confidential information the 

employee learned in the course of employment about the employer or its 

customers but it cannot “prohibit the employee from using general 

knowledge or skill.” See Rooyakker & Sitz, P.L.L.C. v. Plante & Moran, 

P.L.L.C., 276 Mich. App. 146, 158, 742 N.W.2d 409, 418 (2007). When an 

employee’s knowledge of proprietary information is not at issue, courts 

are more likely to enforce a restriction twelve months or less in duration. 

See, e.g., Coates, 276 Mich. App. at 508, 741 N.W.2d at 546 (enforcing a 

noncompetition clause that applied for one year and applied to 

competitors within 100 miles). 

¶18 Furthermore, the Provision’s two-year preclusion from 

communication between employees and former employees of Quicken 
QUICKEN LOAN v. BEALE, et al 

Decision of the Court 

8 

Loans is unreasonable because it exceeds that which is necessary to 

protect Quicken Loans’ reasonable competitive business interests. See id. 

(holding that a competitive business interest sufficient to justify imposing 

a restrictive covenant must be “greater than merely preventing 

competition.”). Quicken Loans proffers that a two-year requirement 

forbidding communication between employees is reasonable to protect its 

investment in the time it took to train new employees. Although Quicken 

Loans does invest time and money to ensure that its bankers have the 

proper knowledge and licenses to sell mortgages, the classroom training 

program that Employees went through was only eight (now six) weeks 

long. Moreover, most Quicken Loans employees become profitable 

within months of completing this training and beginning to solicit clients. 

¶19 With regards to competitive business interests, a reasonable 

restrictive covenant will protect “against the employee’s gaining some 

unfair advantage in competition with the employer but not prohibit the 

employee from using general knowledge or skill.” Id. at 508, 741 N.W.2d 

at 545. An employer cannot prevent an employee from using his 

knowledge and skills gained from employer training – even if the on-thejob training was “extensive and costly” – by enforcing a restrictive 

covenant. See Follmer, Rudzewicz & Co., P.C. v. Kosco, 420 Mich. 394, 402 

n.4, 362 N.W.2d 676, 680 n.4 (1984). The Provision’s two-year duration is 

unreasonable because training is not a reasonable competitive business 

interest that justifies enforcement of a restrictive covenant, especially a 

covenant that exceeds the time it took Quicken Loans to train the 

Employees. See id. Therefore, Quicken Loans failed to articulate a 

reasonable competitive business interest that would justify imposition of a 

restrictive covenant that precludes former employees from 

communicating with current employees for two years. 

¶20 Quicken Loans also contends that the Provision protects the 

confidential and proprietary information it shares with its employees 

through training materials and client information from leaving Quicken 

Loans. Quicken Loans asserts that the Provision protects the employees’ 

future use of the benefits from its marketing efforts and client 

relationships that employees received while at Quicken Loans. We are not 

persuaded. The Provision is not aimed solely at limiting employees from 

communicating with former employees about new opportunities within 

the mortgage industry. It also forbids current and former employees from 

speaking about any job opportunities -- even if those opportunities have 

nothing to do with the mortgage-related industry and even if those 

employees worked in another Quicken Loans entity unrelated to 

mortgages. Accordingly, the Provision restricts employee communication 
QUICKEN LOAN v. BEALE, et al 

Decision of the Court 

9 

regarding issues that are not merely proprietary customer or company 

information. See id. at 407-08, 362 N.W.2d at 682-83 (“To the extent such 

an agreement provides reasonable protection for the confidential 

information of the employer, it does not violate the statute and is 

enforceable. To the extent it goes beyond what is reasonably necessary for 

the protection of confidential information, it is unenforceable. The courts 

thus must scrutinize such agreements and enforce them only to the extent 

they are reasonable. . . . An agreement that unduly limits a former 

employee’s freedom to go into business for himself or another . . . is 

unreasonable and hence unenforceable.”). 

¶21 Although Mich. Comp. Laws § 445.774a(1) permits a court to 

limit an unreasonable restrictive covenant to render it reasonable in light 

of the circumstances, Michigan law does not permit courts to rewrite the 

express terms of a contract. See McDonald, 480 Mich. at 199-200, 747 

N.W.2d at 817. To make this two-year duration term reasonable, we 

would have to rewrite this term of the Provision. Therefore, the Provision 

is unreasonable and unenforceable as a matter of law, because: (1) its 

temporal duration term exceeds that which is necessary to protect a 

legitimate competitive business interest; (2) it precludes employees from 

using their basic knowledge or skills in the mortgage-related industry; 

and (3) it attempts to limit current and former employees from discussing 

employment that is not mortgage related. Accordingly, we need not 

address whether the geographical scope is reasonable or whether the 

Provision is “injurious to the public.” See id.; see also St. Clair Med., P.C., 

270 Mich. App. at 266, 715 N.W.2d at 919. 

II. Attorney Fees 

¶22 The trial court awarded attorney fees and costs Defendants 

as the prevailing parties pursuant to A.R.S. § 12-341.01. On appeal, 

Quicken Loans objects to this award. The award of attorney fees is within 

the sound discretion of the trial court. See, e.g., Spector v. Spector, 17 Ariz. 

App. 221, 230, 496 P.2d 864, 873 (App. 1972). “We view the facts in a light 

most favorable to upholding the trial court’s ruling.” See Hammoudea v. 

Jada, 222 Ariz. 570, ¶ 2, 218 P.3d 1027, 1028 (App. 2009). We will not 

reverse such an award absent an abuse of that discretion. Orfaly v. Tucson 

Symphony Soc’y, 209 Ariz. 260, 265, ¶ 18, 99 P.3d 1030, 1035 (App. 2004). 

A. Evidentiary Hearing 

¶23 As a preliminary matter, Quicken Loans appeals the trial 

court’s order denying its motion for an evidentiary hearing regarding 
QUICKEN LOAN v. BEALE, et al 

Decision of the Court 

10 

Employees’ application for attorney fees. Under Arizona Rule of Civil 

Procedure 54(g)(3), a trial court, in its discretion, may conduct a hearing to 

determine the contested issues when an application for attorney fees is 

contested. See Ariz. R. Civ. P. 54(g)(3) (2014). 

¶24 Quicken Loans has not indicated what information it would 

have presented at a hearing that was not presented in its objection to the 

award of attorney fees. Also, to the extent that Quicken Loans wanted to 

present evidence of who was paying Employees’ attorney fees, the 

Employees do not contest that loanDepot is paying their fees. For these 

reasons, the trial court did not abuse its discretion by declining to hold an 

evidentiary hearing. 

B. Employees’ Attorney Fees 

¶25 Quicken Loans challenges the trial court’s award of attorney 

fees to various individual employees based on the theory that Employees’ 

fees were paid by loanDepot. In Arizona, a successful party in a contract 

action may recover reasonable attorney fees pursuant to A.R.S. § 12-341.01 

provided the successful party can demonstrate a genuine obligation to pay 

fees. See Alano Club 12, Inc. v. Hibbs, 150 Ariz. 428, 434, 724 P.2d 47, 53 

(App. 1986) (holding that the trial court should have made the successful 

parties enter facts into the record that they were obligated to pay fees 

before attorney fees were awarded). Here, Employees entered affidavits 

into the record demonstrating that they agreed to pay the legal fees 

associated with the cost of their defense. Therefore, Employees 

appropriately demonstrated to the trial court, a genuine obligation for 

their legal fees to be paid, regardless of who subsequently paid the fees. 

See, e.g., Orfaly, 209 Ariz. at 267, ¶ 27, 99 P.3d at 1037 (noting “that some 

portions of appellees’ attorney fee expense was covered by insurance does 

not preclude the fees awards to appellees”). Thus, the trial court did not 

err in ordering Quicken Loans to pay Employees’ legal fees and costs 

related to this action. 

C. loanDepot’s Attorney Fees 

¶26 Quicken Loans also argues that the trial court’s award of 

attorney fees to loanDepot, as Intervenor, was error because (1) loanDepot 

failed to assert a claim for attorney fees in a pleading and was thus 

precluded from pursuing fees and (2) loanDepot was not a “successful 

party.” Quicken Loans argues that pursuant to King v. Titsworth, 221 Ariz. 

597, 212 P.3d 935 (App. 2009), the trial court could not award attorney fees 

because the request for attorney fees was not made in the pleadings listed 
QUICKEN LOAN v. BEALE, et al 

Decision of the Court 

11 

in Rule 7(a). However, in King, the request for attorney fees was made in 

a motion, after a decision on the merits. Id. at ¶ 12. In this case, however, 

loanDepot never filed an answer; instead the request for attorney fees was 

made in both the motion to dismiss and the motion for summary 

judgment. 

¶27 Furthermore, loanDepot was a “successful party” in this 

action. To illustrate, loanDepot had a vested interest in the outcome of 

this action because Quicken Loans initiated the action in order to remove a 

number of loanDepot’s employees from its employ. When Employees 

prevailed on their claims and were able to remain at loanDepot, 

loanDepot’s interests were protected and loanDepot was a successful 

party. Therefore, the trial court did not abuse its discretion in awarding 

attorney fees to loanDepot. 

¶28 Finding no abuse of discretion here, we affirm the trial 

court’s award of attorney fees to the Defendants. 

III. Request for Attorney Fees on Appeal 

¶29 Defendants request attorney fees incurred on appeal 

pursuant to ARCAP 21 and A.R.S. § 12-3410.01. In our discretion, we 

decline to award attorney fees. However, as the prevailing parties, we 

award the costs of this appeal to Defendants upon compliance with 

ARCAP 21. 

CONCLUSION 

¶30 We affirm the orders and judgments of the trial court.