United States District Court, E.D. California
EDWARD J. JOHNSON, Plaintiff,
GERALD JOHNSON, Defendant. GERALD JOHNSON, Counterclaimant,
EDWARD J. JOHNSON, Counterdefendant.
ORDER ON COUNTERDEFENDANT'S MOTION TO STRIKE
COUNTERCLAIMS AND AFFIRMATIVE DEFENSES (ECF No. 33)
Michael J. Seng UNITED STATES MAGISTRATE JUDGE
November 30, 2015, Defendant and Counterclaimant Gerald
Johnson removed Plaintiff and Counterdefendant Edward
Johnson's complaint to this Court. On December 7,
2015, Defendant moved the Court pursuant to Federal Rule of
Civil Procedure 12(b)(6) to dismiss Plaintiff's complaint
for failure to state a claim upon which relief can be
granted. On March 32, 2016, the Court denied the motion to
April 6, 2016, Defendant filed an answer and counterclaims
against Plaintiff. (ECF Nos. 26-27, 31.) On April 27,
2016, Plaintiff filed a motion to strike and/or dismiss the
counterclaims and the affirmative defenses to the original
complaint. (ECF No. 33-35.) Defendant filed an opposition to
the motion to strike on June 10, 2016, and Plaintiff filed a
reply on June 16, 2016. (ECF Nos. 36-37.) On June 20, 2016,
the Court took the matter under submission without oral
argument. (ECF No. 38.) Accordingly, the matter stands ready
parties have consented to Magistrate Judge jurisdiction for
all purposes under 28 U.S.C. § 636(c)(1). (ECF Nos. 12,
FACTUAL AND PROCEDURAL BACKGROUND
essential allegations as set forth in the Complaint were
summarized in this Court's prior order on Defendant's
motion to dismiss and are briefly described here to the
extent relevant to the counterclaims and affirmative defenses
at issue in this motion.
and Defendant are brothers. (Compl. ¶ 7.) In 2005 they
entered into an oral partnership to invest in real estate in
hopes of increasing their individual retirement funds.
(Id. ¶ 8.) Unfortunately, things did not go
well, and it appears that most of the investments resulted in
losses for the partnership.
Partnership held properties in Fresno, California
("Fresno Properties") and Pittsburgh, Pennsylvania
("Pittsburgh Property"). (Id. at
¶¶ 18-25, 31-44). On December 20, 2012, Defendant
and his wife jointly filed for Chapter 7 bankruptcy
protection in the Bankruptcy Court for the Eastern District
of Pennsylvania. (Id. at ¶¶ 48-68.) In May
2013, Defendant obtained a discharge from bankruptcy.
asserted that the Fresno and Pittsburgh Properties and the
loan obligations thereto were "passed-through" the
bankruptcy and returned to Defendant.
September 14, 2015, Plaintiff filed a complaint in the
Mariposa County Superior Court. (ECF No. 1-2.) The complaint
alleged five causes of action against Defendant: 1)
contribution for breach of the partnership obligation of good
faith and fair dealing; 2) promissory estoppel to assume
partnership obligations based on Defendant's
post-bankruptcy petition actions; 3) damages for
Defendant's intentional misconduct and misrepresentations
during his bankruptcy proceeding in breach of his duty of
care to the partnership; 4) wrongful dissociation from the
partnership; and 5) unjust enrichment. (Id.)
November 30, 2015, Defendant removed the matter to federal
court. (ECF No. 1.) On December 7, 2015, Defendant filed a
motion to dismiss the complaint for failure to state a claim
upon which relief can be granted under Fed.R.Civ.P. 12(b)(6).
(ECF No. 7.) On March 23, 2016, the Court denied the motion
on Plaintiff's factual contentions alleging
Defendant's ratification of the partnership after
bankruptcy, the Court determined Plaintiff established facial
plausibility on his claims for contributions to the
partnership based on Defendant's post-bankruptcy actions
and allowed the claims of the original complaint to proceed.
April 12, 2016, at 11:16 a.m. Defendant filed an answer, and
seven minutes later at 11:23 a.m. filed a separate
counterclaim on the Court's electronic case filing
system. (ECF Nos. 27-28.) In the answer, Defendant denies
nearly all of Plaintiff's allegations, and states
thirty-four (34) affirmative defenses. In his counterclaim,
he states five causes of action. Defendant alleges that after
the discharge of his bankruptcy, Plaintiff continued to act
as attorney and agent of Defendant and the alleged
partnership, incurring, and obligating Defendant to pay,
costs, fees, and expenses in managing and operating the
properties at issue. Defendant contends that the actions
taken by Plaintiff were unnecessary, improper, and excessive.
(ECF No. 31 at ¶¶ 8-13.)
on these actions, Defendant alleges three causes of action in
the counterclaim for negligence, legal malpractice, and
breach of a fiduciary duty based on Plaintiff's alleged
conduct as an agent or attorney for the alleged partnership.
Causes of action four and five are for breach of a promissory
note and breach of contract relating to Plaintiff's
alleged failure to repay a note in the amount of $30, 000.
alleges that none of the claims in the counterclaim state a
claim and all should be stricken or dismissed. He also asks
that all of the affirmative defenses in Defendant's
answer be stricken.
Motion to Strike
motion to strike must involve (1) an insufficient defense,
(2) a redundant matter, (3) an immaterial matter, (4) an
impertinent matter, or (5) a scandalous matter. Fed.R.Civ.P.
12(f); Yursik v. Inland Crop Dusters Inc., 2011 U.S.
Dist. LEXIS 132275, 2011 WL 5592888, at *3 (E.D. Cal. Nov.
16, 2011) (citing Whittlestone, Inc. v. Handi-Craft
Co., 618 F.3d 970, 973-74 (9th Cir. 2010)). A defendant
may not move to strike factual allegations on the grounds
that the allegations are insufficient. Kelley v.
Corrections Corp. of America, 750 F.Supp.2d 1132, 1146
(E.D. Cal. 2010) ("The proper medium for challenging the
sufficiency of factual allegations in a complaint is through
Rule 12(b)(6) not Rule 12(f).") (citing Consumer
Solutions REO, LLC v. Hillery, 658 F.Supp.2d 1002, 1020
(N.D. Cal. 2009)). "[W]here a motion is in substance a
Rule 12(b)(6) motion, but is incorrectly denominated as a
Rule 12(f) motion, a court may convert the improperly
designated 12(f) motion into a Rule 12(b)(6) motion."
Id. (citing Consumer Solutions, 658
F.Supp.2d at 1021).
Federal Rule of Civil Procedure 12(b)(6)
motion to dismiss under Rule 12(b)(6) tests the legal
sufficiency of the claims alleged in the complaint. See
Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th
Cir. 1995). When reviewing a motion to dismiss for failing to
state a claim, the court must "accept as true all of the
factual allegations contained in the complaint, "
Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197,
167 L.Ed.2d 1081 (2007) (per curiam) (citation omitted), and
may dismiss the case "only where there is no cognizable
legal theory or an absence of sufficient facts alleged to
support a cognizable legal theory." Shroyer v. New
Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th
Cir. 2010) (citation & quotation marks omitted). When a
complaint presents a cognizable legal theory, the court may
grant the motion if the complaint lacks "sufficient
factual matter to state a facially plausible claim to
relief." Id. (citing Ashcroft v.
Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d
868 (2009)). A claim has facial plausibility when a plaintiff
"pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged." Iqbal, 129 S.Ct. at 1949
evaluating such a motion, the court must accept all material
allegations in the complaint as true, even if doubtful, and
construe them in the light most favorable to the non-moving
party. Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); Cahill v.
Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir.
1996). "[C]onclusory allegations of law and unwarranted
inferences, " however, "are insufficient to defeat
a motion to dismiss for failure to state a claim."
Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th
Granting Leave to Amend
court dismisses a complaint under Rule 12(b)(6), it must then
decide whether to grant leave to amend. The Ninth Circuit has
"repeatedly held that a district court should grant
leave to amend even if no request to amend the pleading was
made, unless it determines that the pleading could not
possibly be cured by the allegation of other facts."
Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000)
(citations & quotation marks omitted).
requests the Court take judicial notice of a Uniform
Statutory Form Power of Attorney recorded in Fresno County ...