United States District Court, E.D. California
FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for AMTRUST BANK, Plaintiff,
FIRST PRIORITY FINANCIAL, INC., a California corporation, Defendant.
ORDER GRANTING PLAINTIFF'S MOTION TO STRIKE
DEFENDANT'S AFFIRMATIVE DEFENSES
MENDEZ UNITED STATES DISTRICT JUDGE
matter comes before the Court on Plaintiff Federal Deposit
Insurance Corporation's (FDIC) ("Plaintiff")
Motion to Strike Defendant First Priority Financial
Inc.'s ("Defendant") twelfth, twenty-sixth, and
twenty-seventh affirmative defenses (Doc. #12) from
Defendant's answer (Doc. #5) to the complaint (Doc. #1).
Defendant opposes the motion (Doc. #17). For the reasons
set forth below, Plaintiff's motion is GRANTED.
FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND
"is a corporation and instrumentality of the United
States of America, . . . and is authorized to be appointed as
receiver for insured depository institutions that have
failed." Id. ¶ 5. "On December 4,
2009, the Office of Thrift Supervision closed AmTrust and
appointed [Plaintiff] as Receiver." Id.
Plaintiff is permitted to file a lawsuit in this court of law
pursuant to 12 U.S.C. §§ 1819 and 1821(d)(2)(A)(i)
and succeeded to all of AmTrust's claims. Plaintiff now
owns the subject claims and has standing to prosecute this
action as AmTrust's receiver.
alleges that in both 2004 and 2007, AmTrust and Defendant
entered into a written Master Broker Agreement which
"set forth terms and conditions, pursuant to which
[Defendant] would originate and submit and AmTrust would
accept and fund mortgage loans." Compl. ¶¶ 7,
11. Plaintiff alleges Defendant breached the terms and
conditions of the referenced Master Broker Agreements,
id. ¶¶ 24, 34, 43, 52, accordingly,
Plaintiff filed this lawsuit for breach of contract,
id. ¶ 1.
Defendant's answer it denies the allegations in
Plaintiff's complaint and asserts thirty-two affirmative
defenses. Plaintiff seeks to strike Defendant's twelfth,
twenty-sixth, and twenty-seventh affirmative defenses: (12)
Negligence and Breach of Contract, (26) Comparative
Indemnity, and (27) Fraud.
Motion to Strike is brought under Federal Rule of Civil
Procedure ("Rule") 12(f), which provides in
pertinent part: "The court may strike from a pleading an
insufficient defense or any redundant, immaterial,
impertinent or scandalous matter." Fed.R.Civ.P. 12(f).
"A defense which demonstrates that plaintiff has not met
its burden of proof is not an affirmative defense."
Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1088
(9th Cir. 2002). "On the other hand, ‘[a]n
affirmative defense, under the meaning of [Rule] 8(c), is a
defense that does not negate the elements of the
plaintiff's claim, but instead precludes liability even
if all of the elements of the plaintiff's claims are
proven.'" Barnes v. AT & T Pension Benefit
Plan-Nonbargained Program, 718 F.Supp.2d 1167, 1173
(N.D. Cal. 2010) (first alteration in original) (quoting
Roberge v. Hannah Marine Corp., No. 96-1691, 1997 WL
468330, at *3 (6th Cir. 1997)). "While courts rarely
grant Rule 12(f) motions to strike affirmative defenses, if
an affirmative defense is a negative defense and should
instead be included as a denial in the answer, the motion to
strike will be granted." Lexington Ins. Co v.
Energetic Lath & Plaster, Inc., No. 2:15-CV-00861-KJM,
2015 WL 5436784, at *11-12 (E.D. Cal. Sept. 15, 2015) (citing
Barnes, 718 F.Supp.2d at 1173).
objects (Doc. #18) to Plaintiff's Exhibit A attached to
the Declaration of Lauren M. Gibbs (Plaintiff's attorney
of record) in support of the Motion to Strike (Doc. #13-1).
Exhibit A contains three pages of the seventeen page 2004
Master Broker Agreement between AmTrust bank and Defendant.
contends that "[t]he complete document has not been
disclosed to Defendant by Plaintiff[, and] Plaintiff should
not be allowed to select favorable portions of the alleged
agreement . . . while disregarding the rest . . . ."
Def.'s Objection to Pl.'s Ex. A 1:25-28. Defendant
cites Federal Rule of Evidence 106 as the basis for its
advisory committee's note to Federal Rule of Evidence 106
states: "The rule is based on two considerations[-t]he
first is the misleading impression created by taking matters
out of context[; t]he second is the inadequacy of repair work
when delayed to a point later in the trial." Fed.R.Evid.
106 advisory committee's note. Exhibit A is only relevant
to this Court's analysis for the choice-of-law provision
it contains. Further, Plaintiff also introduces Exhibit B-the
2007 Master Broker Agreement between AmTrust bank and
Defendant-which contains an identical choice-of-law provision
(Doc. #13-2). Defendant does not object to this Exhibit and
Defendant does not contest Plaintiff's choice-of-law
argument. Accordingly, neither of ...