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Mic Property and Casualty Corporation v. Kennolyn Camps, Inc.

United States District Court, N.D. California, San Jose Division

August 3, 2015

MIC PROPERTY AND CASUALTY CORPORATION, et al., Plaintiffs,
v.
KENNOLYN CAMPS, INC., Defendant.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION TO STRIKE Re: Dkt. No. 19

EDWARD J. DAVILA, District Judge.

Plaintiffs and Counterdefendants MIC Property and Casualty Insurance Corporation ("MICPAC") and CIM Insurance Corporation ("CIM") filed this action against Defendant and Counterclaimant Kennolyn Camps, Inc. ("Kennolyn") for a declaration that MICPAC and CIM owed no duty to defend Kennolyn against claims asserted in a state court case. Presently before the court is Plaintiffs' motion to strike Kennolyn's affirmative defenses pursuant to Federal Rule of Civil Procedure 12(f). See Dkt. No. 19. Kennolyn opposes the motion. See Dkt. No. 21.

Federal jurisdiction arises pursuant to 28 U.S.C. § 1332. The court previously found this matter suitable for decision without oral argument pursuant to Local Civil Rule 7-1(b) and vacated the associated hearing date. Having now carefully considered the parties' arguments, the court finds that some but not all of Kennolyn's affirmative defenses are subject to Rule 12(f). Accordingly, the motion to strike will be granted in part and denied in part for the reasons explained below.

I. FACTUAL AND PROCEDURAL BACKGROUND

MICPAC and CIM are corporations incorporated in Michigan, with their principal places of business in Southfield, Michigan. See Compl., Dkt. No.1, at ¶ 2. Kennolyn is a corporation incorporated in California, with its principal place of business in Soquel, California. Id. at ¶ 1. According to the Complaint, Kennolyn claims that MICPAC, CIM or another affiliate insurer issued it liability insurance in effect on July 19, 1988, when the acts complained of in the underlying state court case[1] occurred. Id. at ¶¶ 1, 8. The plaintiff in the state court case alleged bodily injury as a result of conduct occurring on July 19, 1988, and asserted claims against Kennolyn for negligent supervision/failure to warn, negligent hiring/retention, and negligent failure to warn, train and educate the plaintiff. See Answer, Dkt. No. 17, at ¶ 10. The state court case settled under confidential terms on October 14, 2014. Id. at ¶ 16.

Before entering into the settlement, Kennolyn requested that MICPAC and CIM provide it with a defense and tendered notice of the underlying action on July 15, 2014. Id. at ¶ 13. In response, MICPAC and CIM determined that neither they nor an affiliate insurer issued Kennolyn an insurance policy in effect on July 19, 1988. See Compl., at ¶ 10. MICPAC and CIM therefore rejected Kennolyn's proof of coverage on the basis that no policy existed and declined to defend or indemnify Kennolyn. Id. at ¶¶ 11, 13.

MICPAC and CIM initiated this action on February 6, 2015, asserting one claim for declaratory relief. Kennolyn counterclaimed against MICPAC and CIM, alleging they breached the insurance policy and the implied covenant of good faith and fair dealing. Kennolyn also asserted nine affirmative defenses. This motion followed.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(f) permits a court 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 a matter of law." G&G Closed Circuit Events, LLC v. Nguyen, No. 10-CV-00168-LHK, 2010 U.S. Dist. LEXIS 104980, at *3, 2010 WL 3749284 (N.D. Cal. Sept. 23, 2010) (citing Security People, Inc. v. Classic Woodworking, LLC, No. C-04-3133 MMC, 2005 U.S. Dist. LEXIS 44641, at *5, 2005 WL 645592 (N.D. Cal. Mar. 4, 2005)). "The key to determining the sufficiency of pleading an affirmative defense is whether it gives plaintiff fair notice of the defense." Wyshak v. City Nat. Bank, 607 F.2d 824, 827 (9th Cir. 1979).

In this district at least, a defendant provides "fair notice" of an affirmative defense by meeting the pleading standard articulated in Federal Rule of Civil Procedure 8, as further refined by Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 555 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009). See Otey v. Crowdflower, Inc., No. 12-cv-05524-JST, 2013 U.S. Dist. LEXIS 151846, at *11-12, 2013 WL 5734146 (N.D. Cal. Oct. 22, 2013) ("This Court agrees with the many judges in this district, however, who routinely apply Iqbal's heightened pleading standard to affirmative defenses."); see also Prime Media Group LLC v. Acer Am. Corp., No. 5:12-cv-05020 EJD, 2013 U.S. Dist. LEXIS 22437, at *5 n.2, 2013 WL 621529 (N.D. Cal. Feb. 19, 2013) ("Although the Ninth Circuit has not yet settled this issue once and for all, it seems a foregone conclusion at this point that the Rule 8 pleading standard... should also apply to affirmative defenses."). Thus, while a defense need not include extensive factual allegations in order to provide a defendant with fair notice (Sec. People, Inc., 2005 U.S. Dist. LEXIS 44641, at *6), it must nonetheless include enough supporting information to be plausible; bare statements reciting legal conclusions will not suffice. CTF Dev., Inc. v. Penta Hospitality, LLC, No. C-09-02429, 2009 U.S. Dist. LEXIS 99538, at *21, 2009 WL 3517617 (N.D. Cal. Oct. 26, 2009).

Aside from insufficiently pled defenses, Rule 12(f) also permits the court to strike material that is immaterial, impertinent or redundant. Fed.R.Civ.P. 12(f). Immaterial matter is "that which 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) (quoting 5 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1382, at 706-707 (1990)). Similarly, impertinent matter does not pertain, and is not necessary, to the issues in question. Id . "Redundant allegations are those that are needlessly repetitive or wholly foreign to the issues involved in the action." Cal. Dep't of Toxic Substances Control v. Alco Pac., Inc., 217 F.Supp.2d 1028, 1033 (C.D. Cal. 2002) (internal quotation marks and citations omitted).

Where a court strikes an affirmative defense, leave to amend should be freely given so long as there is no prejudice to the moving party. Wyshak, 607 F.2d at 826.

III. DISCUSSION

MICPAC and CIM move to strike all nine affirmative defenses as immaterial, impertinent, or insufficiently pled. They also move to strike Kennolyn's request for ...


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