Kaufman & Broad Monterey Bay et al v. Travelers Property Casualty Company of America

Filing 153

Order by Hon. Edward J. Davila denying 137 Motion to Strike.(ejdlc2, COURT STAFF) (Filed on 1/11/2012)

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United States District Court
For the Northern District of California

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
KAUFMAN & BROAD MONTEREY BAY, ET )
AL.,
)
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Plaintiffs,
)
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v.
)
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TRAVELERS PROPERTY CASUALTY
)
COMPANY OF AMERICA,
)
)
Defendant.
)

Case No.: 5:10-CV-2856 EJD
ORDER DENYING MOTION TO
STRIKE
(Re: Docket No. 137)

Currently before the court is Plaintiffs and Counter-Defendants Kaufman & Broad

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Monterey Bay and KB Home South Bay, Inc.’s (collectively “KB Home”) motion to strike portions

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of Defendant and Counterclaimant Travelers Property Casualty Company of America (“Travelers”)

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Amended Answer. Specifically, KB Homes moves to strike a portion of the Eighteenth Affirmative

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Defense and the entirety of the Thirtieth, Thirty-First, and Thirty-Second Affirmative Defenses.

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The court finds that this motion is appropriate for determination without oral argument. See Civil

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L.R. 7-1(b). For the reasons discussed below, the motion is DENIED.

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BACKGROUND
On May 27, 2010, KB Homes filed this action in the Superior Court of California, County

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of Monterey. On June 29, 2010, the case was removed to this court. On June 29, 2010, Travelers

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filed its Answer. On August 31, 2011, the court granted Travelers’ unopposed motion for leave to

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file counter-claims for reimbursement, unjust enrichment, breach of contract, and declaratory relief.
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Case No.: 5:10-CV-2856 EJD
ORDER DENYING MOTION TO STRIKE

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Docket No. 115. The court ordered Travelers to amend its Answer “to add the counter-claims and

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any additional allegations necessary to support such claims.” Id.

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On September 16, 2011, Travelers filed its Amended Answer adding these counter-claims.

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Travelers also added one sentence to its Eighteenth Affirmative Defense and three entirely new

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affirmative defenses as its Thirtieth, Thirty-First, and Thirty-Second Affirmative Defenses

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(collectively the “newly-added affirmative defenses”). See Docket No. 126. These newly added

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affirmative defenses and the amendment to the Eighteenth Affirmative Defense essentially allege

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that KB acted in bad faith and failed to fulfill its duty to cooperate with Travelers.

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On September 30, 2011, KB Homes filed this motion to strike on the basis that the newly-

United States District Court
For the Northern District of California

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added affirmative defenses were filed without leave and KB Homes would be prejudiced because it

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the discovery cut-off date, May 27, 2011, had already passed. On December 12, 2011, the court

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ordered that additional discovery could be conducted with regard to the new claims in Travelers’

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Amended Answer. In its opposition to the motion, Travelers did not contest that it added the

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newly-added affirmative defenses without leave, and Travelers requested leave to amend their

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answer to plead the newly-added affirmative defenses if the court strikes them as improperly filed.

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In its reply, KB Homes acknowledged that it may now conduct discovery related to Travelers’

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newly-added affirmative defenses and did not object to Travelers’ request to file a Second

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Amended Answer that contains these newly-added affirmative defenses.

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DISCUSSION
Pursuant to Fed. R. Civ. P. 15(a)(2), Travelers was required to obtain either KB Homes’

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written consent or leave of court before amending its pleadings. The court granted Travelers leave

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to amend its answer to add counter-claims. Travelers exceeded the scope of its leave to amend and

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improperly pleaded its newly-added affirmative defenses.

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The court, however, may choose not to strike the pleading in the interests of judicial

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economy, see Manzano v. Metlife Bank N.A., No. 2:11-651 WBS DAD, 2011 WL 2080249, at *3

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(E.D. Cal May 25, 2011) (collecting cases), especially when “leave to amend would have been

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granted had it been sought and when it does not appear that any of the parties will be prejudiced by

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allowing the change.” Charles Alan Wright et al., Federal Practice & Procedure § 1484 (3d ed.
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Case No.: 5:10-CV-2856 EJD
ORDER DENYING MOTION TO STRIKE

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2010) (observing that “[p]ermitting an amendment without formal application to the court under

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these circumstances is in keeping with the overall liberal amendment policy of Rule 15(a) and the

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general desirability of minimizing needless formalities”). Here, KB Homes has no objection to

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Travelers’ being permitted to plead these newly-added affirmative defenses. KB Homes

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acknowledges that the prejudice it initially cited has been avoided by the court’s December 12,

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2011 order allowing additional discovery. Thus, in the interest of judicial economy, the court

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declines to strike the newly-added affirmative defenses. Accordingly,
IT IS HEREBY ORDERED that KB Homes’ motion to strike is DENIED.

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Dated:

United States District Court
For the Northern District of California

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_________________________________
EDWARD J. DAVILA
United States District Judge

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Case No.: 5:10-CV-2856 EJD
ORDER DENYING MOTION TO STRIKE