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WO

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Wells Fargo Bank NA, 

Plaintiff, 

v. 

Wyo Tech Investment Group LLC, et al., 

Defendants.

No. CV-17-04140-PHX-DWL

ORDER 

Wyo Tech Investment Group LLC,

Third Party Plaintiff, 

v. 

Joshua Wurtzel, et al., 

Third Party Defendants. 

Wyo Tech Investment Group LLC,

Cross Claimant, 

v. 

Jean Noelting, et. al., 

Cross Defendants. 

INTRODUCTION 

 In September 2016, CWT Canada II Limited Partnership, Resources Recovery 

Division, and Jean Noelting (collectively, “Judgment Creditors”) obtained a $7 million 

judgment in New York state court against Dennis Danzik and RDX Technologies 
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Corporation (collectively, “Judgment Debtors”). In October 2017, the Judgment Creditors’ 

law firm, Schlam Stone & Dolan, LLP (“Law Firm”), utilized this judgment to issue a 

“restraining notice” to a New York-based branch of Wells Fargo bank. The notice asserted 

that Wells Fargo was required to freeze a particular account with a balance of $546,282.55. 

Upon receipt of the notice, Wells Fargo froze the account. 

 Although the Judgment Creditors had reasons to suspect the Judgment Debtors held 

an interest in the frozen account, the account was not actually held in either of the Judgment 

Debtors’ names. Instead, it was held in the name of Wyo Tech Investment Group LLC 

(“Wyo Tech”), an Arizona-based company. When Wyo Tech learned its account had been 

frozen, it complained to the Judgment Creditors and to Wells Fargo, disputed whether the 

Judgment Debtors had any interest in the account, and threatened to sue. In response, Wells 

Fargo filed an interpleader action in this Court. 

 Since the interpleader action was instituted in November 2017, Wyo Tech has 

asserted a veritable smorgasboard of counterclaims, crossclaims, and third-party claims. 

In August 2018, the Court issued an order (Doc. 69) dismissing Wyo Tech’s counterclaims 

against Wells Fargo and directing Wells Fargo to transfer the disputed funds into an 

account held by the Clerk of Court. That transfer has now occurred, and three additional 

motions are now fully briefed and ripe for resolution: (1) a motion to dismiss Wyo Tech’s 

crossclaims against the Judgment Creditors and third-party claims against the Law Firm1

(Doc. 48), (2) Wyo Tech’s “Motion for Immediate Release of Wrongly Restrained Funds” 

(Doc. 72), and (3) Wells Fargo’s motion for attorneys’ fees and costs (Doc. 85).2

 

As explained below, the Court will grant the motion to dismiss Wyo Tech’s 

crossclaims and third-party claims because the Court lacks personal jurisdiction over any 

 

1

 Wyo Tech initially brought the third-party complaint against Schlam Stone & Dolan, LLP and Joshua Wurtzel, an associate at the firm (see Doc. 17), but Wyo Tech’s amended third-party complaint dropped Wurtzel and added a different attorney, Jeffrey M. Eilender (see Doc. 36). For ease of reference, this Order will collectively refer to Eilender and Schlam Stone & Dolan, LLP as the Law Firm. 

2

 Although the parties requested oral argument on these motions, the Court will deny the requests because the issues have been fully briefed and oral argument will not aid the Court’s decision. See Fed. R. Civ. P. 78(b) (court may decide motions without oral hearings); LRCiv 7.2(f) (same). 
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of the parties against whom those claims are asserted. Next, the Court will deny Wyo 

Tech’s motion for “immediate release” of the disputed funds because that motion is, in 

essence, a prematurely-filed summary judgment motion whose resolution should be 

deferred until later in the case. Finally, the Court will deny without prejudice Wells Fargo’s 

motion for attorneys’ fees and costs. 

BACKGROUND 

On November 9, 2017, Wells Fargo brought a complaint for interpleader under 28 

U.S.C. § 1335 and Federal Rule of Civil Procedure 22. (Doc. 1.) Wells Fargo was facing 

competing claims on one of its accounts between Wyo Tech and the Judgment Creditors. 

In connection with this complaint, Wells Fargo also brought a Motion to Interplead Funds 

and for Order of Discharge. (Doc. 7.) 

On January 17, 2018, Wyo Tech filed its amended answer. (Doc. 37.) The amended 

answer included (1) counterclaims against Wells Fargo for wrongful garnishment and 

aiding and abetting wrongful garnishment and tortious interference with contractual 

relations and business expectancies; (2) crossclaims against the Judgment Creditors for 

wrongful garnishment, tortious interference with contractual relations and business 

expectancies, and abuse of process; and (3) third-party claims against the Law Firm.3

 The 

underlying facts alleged in Wyo Tech’s answer, and in Wells Fargo’s complaint, are 

essentially identical: 

On or about October 18, 2017, the Law Firm caused a restraining notice, purportedly 

issued pursuant to section 5222(b) of the New York Civil Practice Law and Rules 

(“CPLR”), to be served on Wells Fargo at its location at 1755 Broadway, New York, New 

York 10019. (Counterclaim ¶ 7, Crossclaim ¶ 9; TPC ¶ 8.) The Law Firm was acting on 

behalf of the Judgment Creditors. (Counterclaim ¶ 7, Crossclaim ¶ 9; TPC ¶ 8.) 

The restraining notice provided that the Judgment Creditors had obtained a 

judgment in the amount of $7,033,491.13 against Dennis M. Danzik and RDX 

Technologies Corporation (f/k/a Ridgeline Energy Services, Inc.) and that the judgment 

 

3

 The Court will refer to these as Counterclaim, Crossclaim, and TPC, respectively. 
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and accrued interest remained unpaid. (Counterclaim ¶ 8, Crossclaim ¶ 10; TPC ¶ 9.) This 

judgment had been obtained by the Judgment Creditors in GEM Holdco, LLC, et al. v. CWT 

Canada II Limited Partnership, et al., Case Index No. 650841/2013, in the Supreme Court 

of the State of New York, County of New York (“the GEM Holdco case”). (Counterclaim 

¶ 12, Crossclaim ¶ 14; TPC ¶ 13.) Wyo Tech was not a party to the GEM Holdco case and 

was not named as a debtor in the judgment. (Counterclaim ¶ 13; Crossclaim ¶ 15; TPC 

¶ 14.) 

The restraining notice issued to Wells Fargo stated that “it appears that you are in 

possession or in custody of property in which the judgment debtor has an interest as well 

as account(s) or any other property, tangible or intangible or interest in any property in the 

name of the judgment debtor, including, but not limited to, the account reflected in the 

check in the attached Exhibit A, and any other accounts held in the name of Wyo 

Tech Investment Group LLC.” (Counterclaim ¶ 9; Crossclaim ¶ 11; TPC ¶ 10.) The 

referenced check was drawn on a Wells Fargo account ending in -2809 in Wyo Tech’s 

name. (Counterclaim ¶ 9; Crossclaim ¶ 11; TPC ¶ 10.) The restraining notice further stated 

that “you are hereby forbidden to make or suffer any sale, assignment, or transfer of, or 

any interference with any property in which the judgment debtors have any interest, except 

upon direction of the sheriff or pursuant to an order of the court until the aforesaid judgment 

is satisfied or vacated.” (Counterclaim ¶ 11; Crossclaim ¶ 13; TPC ¶ 12.) 

After being served with the restraining notice, Wells Fargo impounded all funds in 

the -2809 account. (Counterclaim ¶ 14; Crossclaim ¶ 16; TPC ¶ 15.) 

On October 24, 2017, Wyo Tech representatives called counsel for Wells Fargo to 

point out that Wyo Tech was not listed as a Judgment Debtor and that the money in the 

frozen account was investor money in which the GEM Holdco case Judgment Debtors had 

no right, title, or interest. (Counterclaim ¶¶ 15-16; Crossclaim ¶¶ 17-18; TPC ¶¶ 16-17.) 

The Wyo Tech representatives also contacted the Law Firm that day with the same 

information and asked the Judgment Creditors to withdraw the restraining notice. 

(Crossclaim ¶ 19; TPC ¶ 18.) 
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On November 2, 2017, Wyo Tech’s counsel emailed a letter to Wells Fargo’s legal 

counsel, copying counsel for the Judgment Creditors, again notifying them that the GEM 

Holdco case Judgment Debtors had no interest in the impounded funds. (Counterclaim ¶ 

17; Crossclaim ¶ 20; TPC ¶ 19.) This letter further asserted that the restraining notice was 

without binding effect and requested that Wells Fargo and the Judgment Creditors restore 

the funds. (Counterclaim ¶ 17; Crossclaim ¶ 20; TPC ¶ 19.) 

On November 6, 2017, the Law Firm wrote a letter that disputed Wyo Tech’s 

position and asserted that Wyo Tech was liable to the Judgment Creditors for the fraudulent 

transfers of Dennis Danzik, one of the Judgment Debtors in the GEM Holdco case. 

(Crossclaim ¶¶ 21-23; TPC ¶¶ 20-22.) The letter claimed that a number of payments had 

been made from the -2809 account “to Danzik, his family members, his company, or his 

cronies.” (Crossclaim ¶ 23; TPC ¶ 22.) 

In response, Wyo Tech’s counsel sent a letter on November 8, 2017, notifying the 

Judgment Creditors and their counsel that Wyo Tech would seek “appropriate legal 

sanctions” if Wyo Tech’s rights to the account were not restored. (Crossclaim ¶¶ 25-27; 

TPC ¶¶ 24-26.) The Judgment Creditors did not respond to this letter and continued to 

refuse to withdraw the restraining notice. (Crossclaim ¶¶ 28, 30; TPC ¶¶ 27, 29.) 

ANALYSIS 

I. Motion to Dismiss 

The Judgment Creditors and Law Firm (collectively, “the movants”) have moved to 

dismiss all of the crossclaims and third-party claims asserted against them by Wyo Tech. 

(Doc. 48.) The movants argue that (1) all of Wyo Tech’s crossclaims and third-party claims 

should be dismissed under Rule 12(b)(2) based on a lack of personal jurisdiction, (2) Wyo 

Tech’s third-party claims should be dismissed because they are “procedurally deficient” 

under Rule 14(a), and (3) all of Wyo Tech’s crossclaims and third-party claims should be 

dismissed under Rule 12(b)(6) for failure to state a claim. Id.

The Court must begin by addressing personal jurisdiction. Indeed, “a federal court 

generally may not rule on the merits of a case without first determining that it has 
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jurisdiction over the category of claim in suit (subject-matter jurisdiction) and the parties 

(personal jurisdiction).” Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 

422, 430-31 (2007). “[T]he Supreme Court has specifically instructed that a district court 

must first determine whether it has jurisdiction before it can decide whether a complaint 

states a claim.” Moore v. Maricopa Cty. Sheriff’s Office, 657 F.3d 890, 895 (9th Cir. 2011). 

The movants argue they aren’t subject to personal jurisdiction because they didn’t 

commit any intentional acts that were “expressly aimed” at Arizona. (Doc. 48 at 2-7.) 

They contend that all of their conduct was directed toward New York—they obtained a 

judgment from a New York court, then invoked New York law to issue a restraining notice 

to a New York-based branch of Wells Fargo—and that, although it might have been 

foreseeable that such conduct would have “effects” in Arizona, this sort of attenuated 

connection is insufficient to create personal jurisdiction. Id. In response, Wyo Tech argues 

that (1) the Judgment Creditors “actually consented to this Court’s Jurisdiction” by 

declining to raise a jurisdictional defense to Wells Fargo’s interpleader action, and (2) 

personal jurisdiction exists over the movants because they “purposefully directed the 

Restraining Notice at WYO TECH’s funds and, after having been clearly informed that the 

funds were in Arizona and being held up here, continued to cause the funds to be restrained 

and inflict damage here. In doing so, The New York Defendants should have reasonably 

expected to be hailed into court in Arizona for such conduct.” (Doc. 57 at 4-7.) 

The Court concludes that it lacks personal jurisdiction over the Judgment Creditors 

and the Law Firm with respect to Wyo Tech’s crossclaims and third-party claims. 

First, the Judgment Creditors have not waived their personal-jurisdiction defense. 

Although the law in this area is not a model of clarity,4

 the rule in the Ninth Circuit appears 

 

4

 Compare Carolina Cas. Ins. Co. v. Mares, 826 F. Supp. 149, 153-54 (E.D. Va. 

1993) (dismissing crossclaims asserted in interpleader action for lack of personal jurisdiction and noting that “courts which have addressed this issue have reached 

conflicting results”), with Rubinbaum LLP v. Related Corporate Partners V, L.P., 154 F. 

Supp. 2d 481, 488 (S.D.N.Y. 2001) (“Because the Court has personal jurisdiction over the Brannons . . . under the interpleader statute, the Court also has supplemental personal jurisdiction over them for any state claims arising out of the same common nucleus of 

operative facts that are at issue in the interpleader action.”); see generally Adam Hoffman, 

Blurring Lines: How Supplemental Jurisdiction Unknowingly Gave the World Ancillary Personal Jurisdiction, 38 U.S.F. L. Rev. 809, 809 (2004) (“Can a district court hearing a 
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to be that a party’s participation in an interpleader action does not automatically mean the 

party has consented to the Court’s personal jurisdiction for purposes of any crossclaims 

that may be asserted in the same case. See Hagan v. Cent. Ave. Dairy, 180 F.2d 502, 503-

04 (9th Cir. 1950); Hallin v. C.A. Pearson, Inc., 34 F.R.D. 499, 503 (N.D. Cal. 1963) (“The 

mere fact that . . . Symons, named as a defendant in this interpleader action, appeared to 

assert a claim should not in the opinion of the Court preclude it from objecting to the 

interposition of an in personam cross-claim against it.”). As one court has explained: 

It is certainly a policy under the Rules to encourage the complete litigation in one case of all related issues between parties. In this case, however, this policy runs counter to the Congressional purpose of encouraging adverse claimants to money or property to come into court [in an interpleader action] and have their rights determined. To encourage defendant Peterson to come into this district in order to assert his claims to the interpleaded [funds], and then to require him to defend a $50,000 damage suit would be incongruous. Statutory interpleader . . . should not be so used as a tool to expand the jurisdictional drawing power of this Court over non-residents. Such an 

approach would do little toward urging non-residents to assert their claims in 

foreign courts.

Marine Bank & Tr. Co. v. Hamilton Bros., Inc., 55 F.R.D. 505, 507 (M.D. Fla. 1972); see 

also Hallin, 34 F.R.D. at 503 (“To hold absolutely that appearance of a named claimant of 

itself precludes [an objection to personal jurisdiction as to a crossclaim] would tend to 

frustrate one of the main purposes of the Federal Interpleader Act, which is to facilitate and 

encourage the assertion of claims of all those possessing an interest in the fund deposited 

in Court.”). Thus, the Court concludes that the Judgment Creditors’ participation in the 

interpleader action does not automatically subject them to the Court’s personal jurisdiction 

for purposes of Wyo Tech’s crossclaims.5

 

 

statutory interpleader action subject an interpleaded defendant to personal liability from a co-defendant’s cross-claim despite the fact that that defendant would not ordinarily be amenable to suit in that court on a kind of ‘well, they’re already here’ approach to personal jurisdiction? . . . [T]he answer should be no, although some courts appear to think otherwise.”). 

5

 Based on this determination, the Court need not resolve the Judgment Creditors’ alternative argument that, as a factual matter, they never consented to the Court’s personal jurisdiction in the interpleader action. (Doc. 70 at 3.) Although the Judgment Creditors identified personal jurisdiction as an affirmative defense in their answer to the interpleader complaint (see Doc. 16 at 4), they also stated in their answer that they “[d]o not oppose” the relief being sought by Wells Fargo (see Doc. 16 at 5). These statements are difficult to 

reconcile. 
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Second, Wyo Tech has failed to meet its burden of establishing the Court has 

personal jurisdiction over the Judgment Creditors and Law Firm in relation to the 

crossclaims and third-party claims. “In opposing a defendant’s motion to dismiss for lack 

of personal jurisdiction, the plaintiff bears the burden of establishing that jurisdiction is 

proper.” Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015) (citation omitted). 

“Where, as here, the defendant’s motion is based on written materials rather than an 

evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional 

facts to withstand the motion to dismiss.” Id. (citations and internal quotation marks 

omitted). “[U]ncontroverted allegations must be taken as true, and ‘[c]onflicts between 

parties over statements contained in affidavits must be resolved in the plaintiff’s favor,’” 

but “[a] plaintiff may not simply rest on the ‘bare allegations of [the] complaint.’” Id.

(citations omitted). 

“Federal courts ordinarily follow state law in determining the bounds of their 

jurisdiction over persons.” Morrill v. Scott Fin. Corp., 873 F.3d 1136, 1141 (9th Cir. 2017) 

(quoting Daimler AG v. Bauman, 571 U.S. 117, 125 (2014)). “Arizona law permits the 

exercise of personal jurisdiction to the extent permitted under the United States 

Constitution.” Id. (citing Ariz. R. Civ. P. 4.2(a)). Accordingly, whether this Court has 

“personal jurisdiction over Defendants is subject to the terms of the Due Process Clause of 

the Fourteenth Amendment.” Morrill, 873 F.3d at 1141. 

“Constitutional due process requires that defendants ‘have certain minimum 

contacts’ with a forum state ‘such that the maintenance of the suit does not offend 

‘traditional notions of fair play and substantial justice.’” Id. (quoting Int’l Shoe Co. v. 

Washington, 326 U.S. 310, 316 (1945)). Minimum contacts exist “if the defendant has 

‘continuous and systematic general business contacts’ with a forum state (general 

jurisdiction), or if the defendant has sufficient contacts arising from or related to specific 

transactions or activities in the forum state (specific jurisdiction).” Morrill, 873 F.3d at 

1142 (citation omitted). 

Here, Wyo Tech does not allege that the movants are subject to general jurisdiction 
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in Arizona. Thus, the Court must apply the Ninth Circuit’s three-part test to determine if 

the movants had sufficient contacts with Arizona to be subject to specific personal 

jurisdiction: 

(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; 

(2) the claim must be one which arises out of or relates to the defendant’s 

forum-related activities; and 

(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e., it must be reasonable. 

Morrill, 873 F.3d at 1142. “The plaintiff bears the burden of satisfying the first two prongs 

of the test.” Id. (citation omitted). “If the plaintiff succeeds in satisfying both of the first 

two prongs, the burden then shifts to the defendant to ‘present a compelling case’ that the 

exercise of jurisdiction would not be reasonable.” Id. (citations omitted). 

Courts use the “purposeful availment” test for claims arising from contract and the 

“purposeful direction” test for claims arising from tort. Id. Here, all of Wyo Tech’s 

crossclaims and third-party claims arise from tort, so the “purposeful direction” test 

applies. Under this test, the defendant must have “(1) committed an intentional act, (2) 

expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to 

be suffered in the forum state.” Schwarzenegger v. Fred Martin Motor Co., 374 F. 3d 797, 

803 (9th Cir. 2004) (citation omitted). 

“Actions may be directed at the forum state even if they occurred elsewhere,” but 

“‘random, fortuitous, or attenuated contacts’ are insufficient to create the requisite 

connection with the forum.” Morrill, 873 F.3d at 1142 (quoting Burger King Corp. v. 

Rudzewicz, 471 U.S. 462, 475 (1985)). The Court must focus on “the relationship among 

the defendant, the forum, and the litigation.” Walden v. Fiore, 571 U.S. 277, 291 (2014) 

(citation omitted). Importantly, “the relationship must arise out of contacts that the 

‘defendant himself’ creates with the forum State.” Id. at 284. Courts should “look[] to the 

defendant’s contacts with the forum State itself, not the defendant’s contacts with persons 
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who reside there.” Id. at 285. “The proper question is not where the plaintiff experienced 

a particular injury or effect but whether the defendant’s conduct connects him to the forum 

in a meaningful way.” Id. at 290. 

Here, the Judgment Creditors and the Law Firm committed the intentional act of 

causing a restraining notice to be served on Wells Fargo. But this act was not directed 

toward Arizona. In its complaint, Wyo Tech alleges that the movants caused a restraining 

notice issued under New York law (N.Y. C.P.L.R. § 5222(b)), in relation to a judgment 

obtained in New York state court, to be served on a New York branch of Wells Fargo. 

(Crossclaim ¶¶ 9-14; TPC ¶¶ 8-13.) The only alleged connections to Arizona are (1) the 

title holder of the account, Wyo Tech, was authorized to do business and was doing 

business in Arizona, (2) the funds in the account were “on deposit in a branch of Wells 

Fargo located in Scottsdale, Arizona,” and (3) the effects of the movants’ conduct were 

felt, and continue to be felt, in Arizona. (Crossclaims ¶¶ 3, 8; TPC ¶¶ 3, 7.) 

These connections are insufficient. Put simply, the Judgment Creditors and the Law 

Firm cannot be said to have “expressly aimed” their conduct at Arizona (which is the 

second element of the “purposeful direction” test) by directing a restraining notice issued 

under New York law to a New York branch of a bank.6

 In Walden, the Supreme Court 

encountered a similar issue. There, a law enforcement agent seized $97,000 from a pair of 

professional gamblers, with knowledge that the gamblers lived in Nevada, as the gamblers 

were traveling through an airport in Georgia. 571 U.S. at 279-80. When the gamblers later 

attempted to sue the agent in Nevada, the agent moved to dismiss based on a lack of 

personal jurisdiction. Id. The Ninth Circuit rejected the agent’s arguments but the 

Supreme Court reversed, holding that Nevada lacked personal jurisdiction because (1) the 

agent “never traveled to, conducted activities within, contacted anyone in, or sent anything 

 

6

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core of Wyo Tech’s counterclaims occurred in New York, where the Judgment Creditors served a Restraining Notice issued by New York court on a New York branch of Wells 

Fargo, and Wells Fargo complied by reaching a bank account that Wyo Tech opened in Arizona. The injury may have been felt in Wyoming or Arizona—where Wyo Tech is organized and conducts business—but it was caused in New York”). 
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or anyone to Nevada,” and (2) the gamblers “lacked access to their funds in Nevada not 

because anything independently occurred there, but because Nevada is where [they] chose 

to be at a time when they desired to use the funds seized by [the agent]. [The gamblers] 

would have experienced this same lack of access in California, Mississippi, or wherever 

else they might have traveled and found themselves wanting more money than they had.” 

Id. at 288-90. The Court further noted that although “some of the cash seized in Georgia 

[was alleged to have] ‘originated’ in Nevada, . . . that attenuated connection was not created 

by [the agent], and the cash was in Georgia, not Nevada, when [the agent] seized it.” Id.

at 291. 

The same logic applies here. The movants never traveled to, conducted activities 

within, or sent anything to Arizona to effectuate the freeze. That Wyo Tech felt the effects 

in Arizona, because it was doing business in Arizona, is not sufficient to find that the 

movants purposefully directed their actions toward Arizona. Furthermore, although 

Walden involved a physical seizure of currency within Georgia, whereas this case involved 

the freezing of an account being administered by a bank with branches all over the world, 

this distinction is not meaningful for purposes of the “purposeful direction” test. Michael 

v. New Century Financial Services, 65 F. Supp. 3d 797 (N.D. Cal. 2014), is instructive. 

There, the court found that defendants who placed a levy on a bank account at Chase Bank, 

utilizing a judgment obtained in New Jersey state court, were not subject to personal 

jurisdiction in California even though the account holder was a California resident and had 

opened the account in California. Id. at 808-09. The court noted: 

[D]etermining where a bank account is “located,” for jurisdictional purposes, is a difficult question given the nature and character of national banks, 

including Chase. A person no longer has access to only one local bank from which he can take out money, but rather he has the convenience of being able to withdraw money and access his account from virtually any location around the world . . . . The Court, however, declines to answer this question because it is simply unnecessary for its determination—even assuming that Plaintiff’s bank account is located in California, Plaintiff pleads only that Chase withdrew money from his account which it paid [in New Jersey], and does not show through evidence that Defendants had any contact with California prior to the date of the levy. 

Id. at 809. Similarly, the Court here declines to decide the “location” of Wyo Tech’s bank 
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account, but the Court’s jurisdictional analysis would be the same even if the account were 

deemed to reside in Arizona. 

Accordingly, the Court dismisses the crossclaims against the Judgment Creditors 

and the third-party complaint against the Law Firm for lack of personal jurisdiction. The 

dismissal is without prejudice. 

II. “Motion for Immediate Relief from Wrongfully Restrained Funds” 

An interpleader action typically proceeds in the following two stages: First, “the 

court determines whether the interpleader action is appropriate.” Metro. Life Ins. Co. v. 

Reynolds, 2013 WL 6048808, *2 (D. Ariz. 2013). If so, the court “may order the plaintiff 

to deposit the disputed funds, discharge the plaintiff, and direct the claimants to interplead.” 

Id. “At the second stage, the court adjudicates the defendants’ competing claims to the 

interplead[ed] funds, and the action usually proceeds as any other civil action.” Id. “The 

second stage is usually resolved when the district court enters judgment in favor of a 

defendant who is legally entitled to the interplead[ed] funds.” Id.

Here, the Court resolved the first stage in its August 1, 2018 order, which required 

Wells Fargo to deposit the disputed funds with the Clerk of Court. (Doc. 69.) Although 

not styled as such, Wyo Tech’s “Motion for Immediate Release of Wrongfully Restrained 

Funds” (see Doc. 72) effectively amounts to a motion for summary judgment on the second 

stage of the interpleader action. After all, in this motion, Wyo Tech is asking the Court to 

“adjudicate[] the defendants’ competing claims to the interplead[ed] funds” and to “enter[] 

judgment in favor of [the] defendant who is legally entitled to the interplead[ed] funds.” 

Reynolds, 2013 WL 6048808 at *2; see also Mobley v. Metro. Life Ins. Co., 907 F. Supp. 

495, 497 (D.D.C. 1995) (treating claimant’s motion for declaratory judgment regarding 

another claimant’s entitlement to funds as motion for summary judgment). 

A motion for summary judgment at this stage of the case is premature, because the 

discovery deadline is over eight months away. In the Ninth Circuit, “[b]efore summary 

judgment may be entered against a party, that party must be afforded both notice that the 

motion is pending and an adequate opportunity to respond. Implicit in the ‘opportunity to 
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respond’ is the requirement that sufficient time be afforded for discovery necessary to 

develop ‘facts essential to justify (a party’s) opposition’ to the motion.” Portland Retail 

Druggists Ass’n v. Kaiser Found. Health Plan, 662 F.2d 641, 645 (9th Cir. 1981) (quoting 

Fed. R. Civ. P. 56(d)); see also John Hancock Life Ins. Co. (U.S.A.) v. Jacobs, 2013 WL 

4050218, *3 (D. Nev. 2013) (treating claimant’s motion for declaratory judgment that she 

was entitled to the disputed funds as motion for summary judgment and finding that “entry 

of judgment [was] premature” because at the “early stage in the proceeding, there 

appear[ed] to be genuine disputes of material fact about who ha[d] a colorable claim to the 

[funds]”). Thus, although there is some force to Wyo Tech’s argument that the Judgment 

Creditors “have not even attempted to inform this Court of what additional discovery they 

need or what that additional discovery may show” (see Doc. 92 at 4 n.3), the applicable 

law nevertheless suggests that the Judgment Creditors are entitled to conduct discovery to 

dispute Wyo Tech’s factual claims. Cf. Wells Fargo Bank, Nat’l Ass’n v. Magellan Ship 

Owners Ass’n, 2010 WL 2266752, *2 (D. Ariz. 2010) (denying portion of proposed 

scheduling order seeking “early distribution of interplead funds” because “the Court cannot 

sanction an early distribution of disputed funds absent full due process of law”). 

Accordingly, the Court denies Wyo Tech’s motion without prejudice. Wyo Tech 

may refile a summary judgment motion in compliance with the Local Rules after the parties 

have had the opportunity to conduct discovery. 

III. Attorneys’ Fees and Costs 

Wells Fargo has filed a motion seeking over $38,000 in attorneys’ fees and costs 

arising from filing the interpleader action and defending against Wyo Tech’s 

counterclaims. (Doc. 85.) This motion, however, fails to comply with LRCiv 54.2 in at 

least two respects. 

First, the motion fails to comply with certain formatting and organizational 

requirements. LRCiv 54.2(c) requires a motion seeking attorneys’ fees to employ an array 

of specific sections. Wells Fargo’s motion does not follow this required structure. 

Second, the motion fails to include the required meet-and-confer certification. 
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LRCiv 54.2(d)(1) provides that “[n]o motion for award of attorneys’ fees will be 

considered unless a separate statement of the moving counsel is attached to the supporting 

memorandum certifying that, after personal consultation and good faith efforts to do so, 

the parties have been unable to satisfactorily resolve all disputed issues.” Here, no such 

statement was provided, and it appears that Wells Fargo did not attempt to meet and confer 

with the other parties before filing its motion. This lack of consultation is particularly 

problematic because the parties’ briefing suggests there is a potential middle ground here: 

Wyo Tech seems to acknowledge that Wells Fargo is entitled to at least $10,930.30 (Doc. 

87 at 8), and the Judgment Creditors do not appear to object to the request. 

For these reasons, the Court will deny Wells Fargo’s motion without prejudice. If 

Wells Fargo wishes to re-submit a motion for attorneys’ fees and costs, it must comply 

with all of LRCiv 54.2’s requirements.7

 

Additionally, when submitting any future request for attorneys’ fees in this case, the 

parties must comply with Paragraph 9 of this Court’s standard Case Management Order,8

which sets forth the following procedures: 

All motions for an award of attorneys’ fees shall be accompanied by an electronic Microsoft Excel spreadsheet, to be emailed to the Court and 

opposing counsel, containing an itemized statement of legal services with all information required by Local Rule 54.2(e)(1). This spreadsheet shall be 

organized with rows and columns and shall automatically total the amount 

7

 It is also unclear whether Wells Fargo’s motion for attorneys’ fees is premature under Local Rule 54.2. Subdivision (b)(2) of that rule provides that “the party seeking an award of attorneys’ fees and related non-taxable expenses must file and serve a motion . . . within fourteen (14) days of the entry of judgment in the action with respect to which the services were rendered.” Here, although the Court has dismissed all of the claims against Wells Fargo and discharged Wells Fargo as a party, the Court has not yet entered a final judgment in the underlying case. Some courts have concluded that attorneys’ fees cannot be sought in this circumstance. See, e.g., Double J Inv., LLC v. Automation Control & 

Info. Sys. Corp., 2014 WL 12672618, *1 (D. Ariz. 2014) (“Although the Aguilars have been dismissed from this lawsuit . . . attorneys’ fees and related non-taxable expenses may only be awarded following a final judgment. A final judgment was not entered following the Court’s dismissal of the claims against the Aguilars. Accordingly, the Court denies the current application without prejudice because it is premature.”). Other courts have not, however, applied the same timing requirements to attorney-fee requests in interpleader actions. See, e.g., Duckett v. Enomoto, 2015 WL 12941862, *1 (D. Ariz. 2015); K.T. v. 

Ramos, 2012 WL 443732, *2 (D. Ariz. 2012). 

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of fees requested to enable the Court to efficiently review and recompute, if needed, the total amount of any award after disallowing any individual billing entries. This spreadsheet does not relieve the moving party of its burden under Local Rule 54.2(d) to attach all necessary supporting documentation to its motion. A party opposing a motion for attorneys’ fees shall email to the Court and opposing counsel a copy of the moving party’s spreadsheet, adding any objections to each contested billing entry (next to each row, in an additional column) to enable the Court to efficiently review the objections. This spreadsheet does not relieve the non-moving party of the requirements of Local Rule 54.2(f) concerning its responsive 

memorandum. 

Finally, for purposes of assisting the parties during any future meet-and-confer efforts, the 

Court will note that, on the one hand, it doesn’t share Wyo Tech’s view that Wells Fargo’s 

attorneys’ billing rates are “astronomical and unreasonable.” (Doc. 87 at 3.) In fact, Wells 

Fargo has identified a survey finding that the average billing rate in Maricopa County two 

years ago was higher than what was charged here. On the other hand, the Court is inclined 

to share Wyo Tech’s skepticism toward the amount of time spent on certain tasks. For 

example, the notice of deposit, a two-paragraph filing, should not have taken over two 

hours to draft and review, and it is unclear why it took 15.2 hours to work on tasks related 

to the pursuit of attorneys’ fees. The Court also notes that some of Wells Fargo’s time 

entries are so vague that it is impossible to discern what task the attorney (or paraprofessional) was actually performing. (See, e.g., Ms. Dawson’s November 8, 2017 entry 

stating, “[a]nalyze information re dispute to assist with strategy re next steps,” and June 1, 

2018 entry stating, “[f]ollow up re new filing re matter”). 

Accordingly, 

IT IS ORDERED that: 

1. The motion to dismiss the crossclaims against CWT Canada II Limited 

Partnership, Resources Recovery Division, and Jean Noelting and the third-party claims 

against Schlam Stone & Dolan, LLP and Jeffrey M. Eilender (Doc. 48) is GRANTED; 

2. The crossclaims against CWT Canada II Limited Partnership, Resources 

Recovery Division, and Jean Noelting and the third-party claims against Schlam Stone & 

Dolan, LLP and Jeffrey M. Eilender are DISMISSED WITHOUT PREJUDICE; 

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3. Wyo Tech’s “Motion for Immediate Release of Wrongfully Restrained 

Funds” (Doc. 72) is DENIED WITHOUT PREJUDICE; and 

4. Wells Fargo’s motion for attorneys’ fees and costs (Doc. 85) is DENIED 

WITHOUT PREJUDICE. 

 Dated this 19th day of December, 2018.