Raymond James & Associates, Inc. v. Augsburg University

Background

Raymond James brought an interpleader action under 28 U.S.C. § 1335. Interpleader is a procedure that allows a party holding disputed money to place it with the court so competing claimants can litigate who is entitled to it without exposing the holder to multiple liability.

Peter Steen opened an investment account with Raymond James in November 2023. In January 2024, he allegedly executed a document naming Augsburg University, Gates Philanthropy Partners, and the Steen Family Foundation as beneficiaries. Steen died on February 22, 2024. At that time, the account was valued at approximately $161,000, and those three entities were listed as beneficiaries.

Carolyn Noehl later challenged the beneficiary designations, asserting that Steen was not mentally well when he made them. Noehl identified herself as the personal representative of Steen’s estate and brought counterclaims against Raymond James for negligence and breach of contract. She alleged that Raymond James and its financial advisor, Zachary Bolden, owed Steen a duty to assist with his investment choices and beneficiary designations, and breached that duty by helping make the changes when Steen lacked the capacity to do so. She sought to invalidate the beneficiary designations, make Steen’s estate the sole beneficiary, and recover $161,000 in damages.

Analysis

Raymond James sought permission to deposit $147,077.44 into the court’s registry. That amount represented the disputed proceeds of $164,057.44 minus $16,980 in attorneys’ fees incurred in bringing the interpleader action. No defendant opposed the deposit.

Raymond James also sought dismissal from the lawsuit, arguing that depositing the money would leave it with no further stake in the outcome. The court explained that an interpleader stakeholder generally may be discharged after depositing the disputed funds, but must remain in the case when a claimant brings an independent counterclaim against it.

The court found that Noehl’s counterclaims were independent. Her claims concerned whether Raymond James negligently assisted Steen with the beneficiary changes and breached a contract, not merely whether Raymond James correctly refused to distribute the funds to Noehl or the estate. Any recovery on those claims could be separate from, and in addition to, the interpleaded funds. The court therefore concluded that interpleader protection did not shield Raymond James from those claims.

The court did not decide which party was entitled to the disputed funds. It also did not decide the validity or applicability of the Master Client Agreement or whether Raymond James could recover additional fees for defending against Noehl’s counterclaims.

Disposition

The court granted in part and denied in part Raymond James’s Motion for Interpleader Deposit. It ordered Raymond James to deposit $147,077.44 into the court’s registry and denied Raymond James’s request to be dismissed from the case. Judge Laura M. Provinzino signed the order on May 30, 2025.