United States District Court, S.D. California
ORDER
Hon.
William Q. Hayes United States District Court
The
matter before the Court is the Motion to Strike and Dismiss
Portions of Complaint filed by Defendants New England Life
Insurance Company a.k.a. New England Variable Life Insurance
Company, Brighthouse Life Insurance Company, and MetLife Auto
& Home Insurance Agency, Inc. (ECF No. 3).
I.
BACKGROUND
On July
8, 2019, Plaintiff M Resorts, Ltd., (“M Resorts”)
initiated this action by filing a Complaint in the Superior
Court for the State of California, County of San Diego,
against Defendants New England Life Insurance Company a.k.a.
New England Variable Life Insurance Company (“New
England Life”), Brighthouse Life Insurance Company
(“Brighthouse”), MetLife Auto & Home
Insurance Agency, Inc. (“MetLife”), and New
England Financial.[1] (ECF No. 1-2). In the Complaint, M Resorts
alleges that it purchased a $5, 000, 000 life insurance
policy from New England Life on the life of “key
member” Richard V. Gibbons, effective April 27, 2000.
(Id. ¶¶ 8-9).
M
Resorts alleges that in February 2019, it received a Notice
of Lapse from Defendants stating that the policy had been
terminated “due to insufficient cash value required to
purchase an additional month's cost of insurance due on
November 27, 2018.” (Id. ¶ 13). M Resorts
alleges that the Notice of Lapse stated the policy could be
reinstated if M Resorts made a premium payment of $33, 943.88
and submitted additional forms. M Resorts alleges that it
made the $33, 943.88 payment on March 8, 2019, but did not
submit any forms. M Resorts alleges that Defendants cashed
the $33, 943.88 check. M Resorts alleges that it paid a total
of $570, 017.99 to Defendants on the policy from the
policy's inception through March 2019.
M
Resorts alleges that it received a letter from Defendants in
April 2019, stating that Defendants had “received $33,
943.88 toward the total premium needed” to
reinstate the Policy. (Id. ¶ 15 (emphasis in
original)). M Resorts alleges that the letter stated M
Resorts needed to complete and return an Application for Life
Insurance Policy Reinstatement. M Resorts alleges that the
letter stated that once Defendants received the
“‘requested information' they would
‘consider' the Policy for reinstatement.”
(Id. ¶ 15). M Resorts alleges that it
“advised Defendants that it had no advance notice of
the premiums due, the overdue premiums, the running of the
grace period, and/or the pending lapse . . . and demanded
immediate reinstatement of the Policy in its original
form.” (Id. ¶ 16). M Resorts alleges that
Defendants refused to reinstate the policy.
M
Resorts brings claims against Defendants for 1) declaratory
judgment or relief; 2) breach of contract; 3) negligence; and
4) violation of California's Unfair Competition Law
(“UCL”), California Business and Professions Code
§§ 17200 et. seq. M Resorts seeks “a
declaration of the rights and duties of the Parties,
including an Order that Defendants have waived any alleged
right to additional application, medical records or
underwriting and that the Policy is in full force and effect
on its original terms and provisions.” (Id. at
18). M Resorts seeks damages and “restoration of money
damages” “personally, and on behalf of the
general public.” (See Id. ¶ 46). M
Resorts seeks “personal and public injunctive relief
against Defendants' ongoing business practices.”
(Id.). M Resorts seeks punitive and exemplary
damages and attorneys' fees, costs, and prejudgment
interest.
On
August 16, 2019, Defendants removed this action to this Court
on the basis of diversity jurisdiction pursuant to 28 U.S.C.
§§ 1441(b) and 1332(a)(1). (ECF No. 1).
On
August 23, 2019, Defendants filed a Motion to Strike and
Dismiss Portions of Complaint. (ECF No. 3). On September 13,
2019, M Resorts filed a Response in opposition to
Defendants' Motion to Strike and Dismiss. (ECF No. 5). On
September 23, 2019, Defendants filed a Reply. (ECF No. 6).
II.
MOTION TO STRIKE
Defendants
move the Court to strike under Rule 12(f) of the Federal
Rules of Civil Procedure 1) M Resorts' request for
injunctive relief and damages on behalf of the general
public; 2) M Resorts' request for attorneys' fees
pursuant to section 1021.5 of the California Code of Civil
Procedure; 3) M Resorts' request for attorneys' fees
pursuant to the UCL; and 4) M Resorts' request for
attorneys' fees “as permitted by law and
contract” and pursuant to M Resorts' breach of
contract claim (ECF No. 3-1 at 2).
Rule
12(f) of the Federal Rules of Civil Procedure provides that
“[t]he court may strike from a pleading an insufficient
defense or any redundant, immaterial, impertinent, or
scandalous matter.” “Redundant” matter is
needlessly repetitive. See Cal. Dep't of Toxic
Substances Control v. Alco Pac., Inc., 217 F.Supp.2d
1028, 1033 (C.D. Cal. 2002). “Immaterial” matter
“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) (quoting 5 Charles A. Wright & Arthur R.
Miller, Federal Practice and Procedure § 1382, at 706-07
(1990)), rev'd on other grounds, 510 U.S. 517
(1994). “‘Impertinent' matter consists of
statements that do not pertain, and are not necessary, to the
issues in question.” Id. at 711. Scandalous
matter “cast a cruelly derogatory light on a party or
other person.” In re 2TheMart.com, Inc. Sec.
Litig., 114 F.Supp.2d 955, 965 (C.D. Cal. 2000). Motions
to strike are generally disfavored. See Petrie v. Elec.
Game Card, Inc., 761 F.3d 959 at 965 (9th Cir. 2014).
“Rule
12(f) does not authorize district courts to strike claims for
damages on the ground that such claims are precluded as a
matter of law.” Whittlestone, Inc. v. Handi-Craft
Co., 618 F.3d 970, 975 (9th Cir. 2010). Rule 12(f) is
“neither an authorized nor a proper way to procure the
dismissal of all or a part of a complaint.”
Id. (citing Yamamoto v. Omiya, 564 F.2d
1319, 1327 (9th Cir.1977)).
In this
case, each portion of the Complaint Defendants request the
Court strike is a request for relief. The Ninth Circuit Court
of Appeals in Whittlestone, Inc., denied a similar
request by the defendant to strike the plaintiff's
request for lost profits and consequential damages. 618 F.3d
at 976. The court stated:
It is quite clear that none of the five categories [in Rule
12(f)] covers the allegations in the pleading sought to be
stricken by HandiCraft. First, the claim for damages is
clearly not an insufficient defense; nobody has suggested
otherwise. Second, the claim for damages could not be
redundant, as it does not appear anywhere else in the
complaint. Third, the claim for damages is not immaterial,
because whether these damages are recoverable relates
directly to the plaintiff's underlying claim for relief.
See Fogerty, 984 F.2d at 1527 (‘Immaterial
matter is that which has no essential or important
relationship to the claim for relief or the defenses being
plead.') (quoting 5A Charles A. Wright & Arthur R.
Miller, Federal Practice and Procedure § 1382,
at 706-07 (1990) (quotation marks omitted)). Fourth, the
claim for damages is not impertinent, because whether these
damages are recoverable pertains directly to the harm being
alleged. Id. (‘Impertinent matter consists of
statements that do not pertain, and are not necessary, to the
issues in question.') (quotation marks and citation
omitted). Finally, a claim for damages is not scandalous, and
Handi-Craft has not alleged as much.
Id. at 974. The court determined that the
defendant's claim that the plaintiff's request for
damages should be stricken was “really an attempt to
have certain portions of [the] complaint dismissed” and
was “better suited for a Rule 12(b)(6) motion.”
Id. (citations omitted); see Rutman Wine Co. v.
E. & J. Gallo Winery, 829 F.2d 729 (9th Cir. 1987)
(“The purpose of [Rule] 12(b)(6) is to enable
defendants to challenge the legal sufficiency of complaints .
. . .”).
Defendants
assert that the Court should strike M Resorts' requests
for attorneys' fees and public damages and injunctive
relief because M Resorts does not meet the legal requirements
to recover the requested relief. See ECF No. 3-1 at
5 (“[A]n award of fees is not authorized by either of
the cited statutes nor pursuant to any other applicable law
or content.”); id. at 6 (“Plaintiff has
failed to allege that it is entitled to fees under section
1021.5.”); id. at 7 (contending M Resorts
cannot request public injunctive relief and damages because
“Plaintiff must pursue class action relief in order to
seek benefits or remedies on behalf of the general
public”). Defendants challenge the legal sufficiency of
the requests for relief, which is not appropriate for a
motion to strike.[2]See, e.g., Ferretti v. Pfizer
Inc., 855 F.Supp.2d 1017, 1029 (N.D. Cal. 2012) (denying
motion to strike request for attorneys' fees pursuant to
the Whittlestone rule); In re ...