United States District Court, E.D. California
BOARD OF TRUSTEES OF IBEW LOCAL UNION No. 100 PENSION TRUST FUND, et al, Plaintiffs,
FRESNO'S BEST INDUSTRIAL ELECTRIC, INC., et al, Defendants.
ORDER GRANTING PLAINTIFFS' MOTION TO STRIKE
SHEILA K. OBERTO, Magistrate Judge.
Plaintiffs Board of Trustees of International Brotherhood of Electrical Workers ("IBEW") Local Union No. 100 Pension Trust Fund ("IBEW No. 100"), Joint Electrical Industry Training Trust Fund, National Electrical Benefit Fund, and IBEW District No. 9 Pension Plan Trust Fund (collectively, "Plaintiffs") filed this action pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA") and the Labor Management Relations Act ("LMRA") on September 24, 2013. (Doc. 1.) Plaintiffs allege claims against Fresno's Best Industrial Electric, Inc. ("Fresno's Best"), Aaron A. Lane ("Lane"), William James Marvin Forbes, Debra Michelle Forbes (the "Forbes Defendants"), American Contractors Indemnity Company ("American Contractors"), and Does 1 through 50 (collectively, "Defendants").
On January 22, 2014, Defendants American Contractors, Fresno's Best, and Lane filed an answer to the complaint. (Doc. 11.) Defendants asserted thirteen affirmative defenses. On February 12, 2014, Plaintiffs filed a motion to strike certain affirmative defenses arguing that they were either insufficiently pled or, alternatively, insufficient as a matter of law. (Doc. 13.) Defendants filed an opposition on February 25, 2014, and Plaintiffs filed a reply brief on March 12, 2014. On March 17, 2014, this matter was deemed suitable for a decision without argument pursuant to U.S. District Court for the Eastern District of California's Local Rule 230(g), and the hearing set for March 19, 2014, was vacated. For the reasons set forth below, Plaintiffs' motion to strike is GRANTED.
Plaintiffs allege that Defendants Fresno's Best and Lane are signatories, either directly or indirectly, to a collective bargaining agreement between the IBEW No. 100 and the East Central California Chapter of the National Electrical Contractors Association, and various trust agreements establishing each of the Plaintiffs as organizations. (Doc. 1, ¶ 15.) Pursuant to these agreements, Defendants Fresno's Best and Lane agreed to submit monthly contribution reports to Plaintiffs for all work performed by their covered employees; remit the appropriate fringe benefit contributions for said work; and permit Plaintiffs to audit their books and records to determine whether Defendants were properly reporting and remitting these contributions. (Doc. 1, ¶ 16.)
Plaintiffs also allege that Fresno's Best and Lane agreed to withhold certain amounts from each employee's paycheck, remit that amount to the appropriate Plaintiffs, and contribute toward the contract administration and hiring expenses incurred by Plaintiffs in administering these agreements. (Doc. 1, ¶ 17.)
Plaintiffs state a breach of contract claim against Fresno's Best and Lane for failure to submit to an audit of all their books and records, despite Plaintiffs' numerous requests to do so; and for failure to remit fringe benefit contributions. Plaintiffs state a breach of fiduciary duties claim against Defendants Lane and the Forbes Defendants. Finally, Plaintiffs assert a "Claim Upon Contractor's License Bond" against American Contractors. (Doc. 1, ¶¶ 46-49.) Plaintiffs contend that Fresno's Best and Lane procured contractor license bonds from American Contractors as a condition for obtaining their contractor's licenses from the State of California. To the extent that Fresno's Best and Lane failed to remit any contributions when due, they willfully and deliberately violated the contractor's license law, including Business & Professions Code section 7120. Plaintiffs seek an entry of judgment against American Contractors for the full applicable portion of the contractor's license bonds issued. (Doc. 1, ¶ 49.)
On January 22, 2014, Defendants filed an answer to the complaint, and on February 12, 2014, Plaintiffs filed a motion to strike certain affirmative defenses asserted in Defendants' answer. (Doc. 13.) It is this motion that is currently pending before the Court.
A. Legal Standard
Pursuant to Federal Rule of Civil Procedure 12(f), the court is permitted to "strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed.R.Civ.P. 12(f). A defense may be insufficient as a matter of pleading or as a matter of law. Sec. People, Inc., Classic Woodworking, LLC, No. C-04-3133, 2005 WL 645592, at *2 (N.D. Cal. Mar. 4, 2005). An affirmative defense may be considered insufficiently pled where it fails to provide the plaintiff with fair notice of the defense asserted. Wyshak v. City Nat'l Bank, 607 F.2d 824, 827 (9th Cir. 1979). An affirmative defense is insufficient as a matter of law where "there are no questions of fact, that any questions of law are clear and not in dispute, and that under no set of circumstances could the defense succeed." Ganley v. Cnty. of San Mateo, No. C06-3923 THE, 2007 WL 902551, at *1 (N.D. Cal. Mar. 22, 2007).
A matter is "immaterial" if it "has no essential or important relationship to the claim for relief or the defenses being pleaded." Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), rev'd on other grounds, 510 U.S. 517 (1994). As motions to strike a defense as insufficient are disfavored, they will not be granted if the insufficiency of the defense is not clearly apparent. See Salcer v. Envicon Equities Corp., 744 F.2d 935, 939 (2d Cir. 1984), vacated on other grounds, 478 U.S. 1015 (1986). Because the purpose of pleading an affirmative defense is simply to give fair notice to plaintiff of the defense being asserted, leave to amend should be freely granted in absence of prejudice to the opposing party. Wyshak, 607 F.2d at 826-27.
1. The Pleading Standard Applicable to Affirmative Defenses
As noted and discussed at length in Dodson v. Strategic Restaurants Acquisition Co. II, LLC, 289 F.R.D. 595 (E.D. Cal. June 18, 2013), district courts within the Ninth Circuit are divided as to whether Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009), which apply to pleading claims in a complaint, apply to pleading affirmative defenses. Compare, Barnes v. AT&T Pension Benefit Plan-Nonbargained Program, 718 F.Supp.2d 1167, 1172 (N.D. Cal. 2010) ("The court can see no reason why the same principles applied to pleading claims [in Twombly and Iqbal ] should not apply to the pleading of affirmative defenses which are also governed by Rule 8") with Vogel v. Linden Optometry APC, No. CV 13-00295 GAF, 2013 WL 1831686 (C.D. Cal. Apr. 30, 2013) (applying Wyshak standard noting linguistic differences between Rule 8(a), which governs complaints, and rule 8(c), which governs affirmative defenses and the differences in the amount of time a plaintiff has to draft a complaint and the time an answering defendant has to plead affirmative defenses). Twombly and Iqbal redefined Rule 8's fair-notice pleading requirement to demand that a pleading set forth "enough facts" to make a claim "plausible on its face" and contain "more than labels and conclusions." Iqbal, 556 U.S. at 678-79.
The majority of district courts in this circuit has applied the Twombly and Iqbal standard to affirmative defenses. Barnes, 718 F.Supp.2d at 1171-72; see also Polo v. Shwiff, No. C 12-04461 JSW, 2013 WL 1797671, at * 4 (N.D. Cal. Apr. 29, 2013) (noting the majority of courts within the Northern ...