United States Welding Inc v. Tecsys Inc

Filing 118

ORDER granting in part and denying in part 94 Motion to Strike Defendant Tecsys, Inc.'s Affirmative Defenses by Magistrate Judge Michael E. Hegarty on 6/4/2015. The affirmative defenses set forth in Tecsys April 13, 2015 Answer to the Complaint [docket #89] are stricken. Tecsys shall file an Amended Answer in conformance with the federal rules and this order on or before 6/19/2015.(mdave, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 14-cv-00778-REB-MEH
UNITED STATES WELDING, INC., a Colorado corporation,
Plaintiff,
v.
TECSYS, INC., a Canadian corporation,
Defendant.
______________________________________________________________________________
ORDER
______________________________________________________________________________
Michael E. Hegarty, United States Magistrate Judge.
Before the Court is Plaintiff’s Motion to Strike Defendant Tecsys, Inc.’s Affirmative
Defenses [filed April 21, 2015; docket #94]. The motion is fully briefed, and the Court finds oral
argument would not materially assist the Court in its adjudication of the motion. For the reasons that
follow, the motion is granted in part and denied in part.
BACKGROUND
Plaintiff United States Welding, Inc. (“USW”) initiated this action against Defendant Tecsys,
Inc. (“Tecsys”) on March 17, 2014. (Docket #2.) USW alleges generally that it licensed faulty
“EliteSeries” financial management software from TECSYS, that it only entered into the License
Agreement because TECSYS intentionally or negligently misrepresented the capabilities and
functionality of its EliteSeries software, and that TECSYS failed to perform its support obligations
under the License Agreement. Based on these allegations, USW brings the following claims: (1)
fraudulent inducement; (2) negligent misrepresentation; (3) gross negligence; (4) willful misconduct;
(5) breach of contract; (6) breach of express and implied warranty; (7) breach of the duty of good

faith and fair dealing, and (8) breach of fiduciary duty. USW seeks compensatory and punitive
damages, together with pre- and post-judgment interest, costs and attorney’s fees.
On May 9, 2014, in response to the Complaint, Tecsys filed a Motion to Dismiss pursuant
to Rule 12(b)(2), 12(b)(5), and 12(b)(6), requesting that USW’s Complaint be dismissed in part with
prejudice and in remaining part without prejudice; alternatively, Defendant requested that the Court
quash service of the summons, and that the Court strike the Complaint’s demand for punitive
damages pursuant to Rule 12(f).

(Docket #14.)

On July 9, 2014, this Court issued a

recommendation that the Motion to Dismiss be granted in part pursuant to Fed. R. Civ. P. 12(b)(5)
for insufficient service of process and denied the motion without prejudice as to Defendant’s
remaining arguments. (Docket #29.) Since that time, USW again attempted and effected service
of process; accordingly, the District Court adopted the Court’s recommendation and quashed the
original service. (Docket #44.)
On September 5, 2014, Tecsys filed a Renewed Motion to Dismiss informing the Court that
“with the exception of the reservation noted in Note 1 above [service effected outside deadline set
in Fed. R. Civ. P. 4(m)], Tecsys does not challenge the validity of that service,”1 and asked that the
Court rule on the remaining Rule 12(b)(6) arguments. Motion, docket #32 at 2 n.2. After full
briefing on the motion, this Court issued a Report and Recommendation on December 1, 2014, that
the motion be granted in part and denied in part. (Docket #47.) The recommendation and motion
to dismiss remain pending before the District Court.
On January 22, 2015, this Court granted Plaintiff’s motion for extension of the discovery

1

Notably, in its recommendation on the original motion to dismiss, this Court requested
that the District Court grant an extension of the Rule 4(m) deadline to allow USW to effect
proper service upon Tecsys. (Docket #29 at 7.)
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deadlines (docket #71), and discovery has proceeded since that time. On April 10, 2015, Plaintiff
filed a motion to compel Defendant’s answer to the operative pleading; with its response to the
motion, Defendant filed an Answer. Dockets ## 86, 89, 90. Thereafter, Plaintiff filed the present
motion seeking to strike all 25 of the Defendant’s affirmative defenses, arguing they are insufficient.
Defendant counters that Plaintiff’s motion is premature, as the answer is not yet due; alternatively,
Defendant argues that its affirmative defenses, as pled, are sufficient because facts need not be
alleged in support of affirmative defenses. Plaintiff replies that Defendant’s “laundry list” of
defenses, without factual support, fails to provide Plaintiff notice of defenses actually applicable to
this case.
DISCUSSION
Rule 12(f) permits the Court to “strike from a pleading an insufficient defense or any
redundant, immaterial, impertinent, or scandalous matter.” “The purpose of Rule 12(f) is to save
the time and money that would be spent litigating issues that will not affect the outcome of the case.”
Kimpton Hotel & Rest. Group, LLC v. Monaco Inn, Inc., No. 07-cv-01514-WDM, 2008 WL 140488,
at *1 (D. Colo. Jan. 11, 2008) (citing United States v. Smuggler-Durant Min. Corp., 822 F. Supp.
873, 875 (D. Colo. 1993)). However, striking a portion of a pleading is a drastic remedy; the federal
courts generally view motions to strike with disfavor and infrequently grant such requests. Id.; see
also 5C Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1380 (3d ed. 2011).
Whether to strike an affirmative defense rests within the discretion of the trial court. Anderson v.
Van Pelt, No. 09-cv-00704-CMA, 2010 WL 5071998, at *1 (D. Colo. Dec. 7, 2010) (citing
Vanderhurst v. Colo. Mountain Coll. Dist., 16 F. Supp. 2d 1297, 1303 (D. Colo. 1998)).
“A motion to strike an affirmative defense as insufficient is adjudicated under the same

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standard as a motion to dismiss: namely, the Court must strike the defense only if it cannot be
maintained under any set of circumstances.” S.E.C. v. Nacchio, 438 F. Supp. 2d 1266, 1287 (D.
Colo. 2006) (citing Unger v. US West, Inc., 889 F. Supp. 419, 422 (D. Colo. 1995)). In Michaud
v. Greenberg & Sada, P.C., No. 11-cv-01015-RPM-MEH, 2011 WL 2885952 (D. Colo. July 18,
2011), this Court found the standard articulated in Nacchio/Unger continues to be the appropriate
standard, that an affirmative defense is sufficient if stated “in short and plain terms” pursuant to Rule
8(b)(1)(A), and if the movant fails to demonstrate that, the defense cannot succeed under any
circumstance. Id. at *4; see also Quick v. Grand Junction Lodging, LLC, No. 13-cv-02917-RBJ,
2014 WL 7205417, at *2 n.2 (D. Colo. Dec. 18, 2014) (listing cases).
USW asks the Court to deviate from this holding and find that the same standard applied to
an analysis under Fed. R. Civ. P. 8(a)(2) for complaints – that is, the Iqbal/Twombly standard2 – be
applied to an analysis under Fed. R. Civ. P. 8(b)(1)(A) for defenses. However, the Court need not
decide this issue. The Court finds that, even under the Nacchio/Unger standard, Tecsys’ stated
affirmative defenses fail.3
Rule 8(b)(1)(A) requires that, in responding to a pleading, a party must state in short and
plain terms its defense to each claim asserted against it. Fed. R. Civ. P. 8(b)(1)(A). Unlike Rule
8(a)(2), Rule 8(b)(1)(A) does not include a requirement that the pleading “sho[w] that the pleader

2

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”).
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Tecsys argues that, since it is not yet required to file an Answer in light of the pending
motion to dismiss, the present motion is premature. The Court is not persuaded; although its
motives may have been to “assist” USW with its discovery, Tecsys chose to, and did, file an
Answer in this case.
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is entitled to relief.” However, the defenses must be stated so as to give notice to a claimant, “who
can then use the discovery process to investigate more fully the factual basis supporting the
defense.” Michaud, 2011 WL 2885952, at *4 (citing Holdbrook v. SAIA Motor Freight Line, LLC,
No. 09–cv–02870–LTB, 2010 WL 865380, at *2 (D. Colo. Mar. 8, 2010) and Cagle v. The James
St. Grp., 400 F. App’x 348, 355 (10th Cir. 2010)).
In this case, Tecsys has simply listed 25 one-sentence defenses in which the majority refer
to “one or more” of USW’s claims. See docket #89 at 14-15. These listed defenses do nothing to
give USW notice of which claim Tecsys intends each defense to be applied. Fed. R. Civ. P.
8(b)(1)(A) (“state in short and plain terms its defenses to each claim asserted against it”) (emphasis
added). Certainly, “permitting bare-bones submissions would allow parties simply to bombard their
opponent with a laundry list of affirmative defenses without making any individualized inquiry into
whether a particular defense actually applies to the facts of the case. ... [I]t seems to serve no
purpose except to reserve defendants’ rights to the maximum extent possible.” Ivanov v. Nyhus, No.
14-cv-382-JDP, 2014 WL 5307936, at*3 (W.D. Wis. Oct. 16, 2014) (citation and internal quotations
omitted).
Accordingly, the Court will strike Tecsys’ affirmative defenses set forth in its April 13, 2015
Answer to the Complaint, but permit Tecsys leave to re-plead in accordance with the federal rules
and this order.
CONCLUSION
For the reasons set forth herein, the Plaintiff’s Motion to Strike Defendant Tecsys, Inc.’s
Affirmative Defenses [filed April 21, 2015; docket #94] is granted with leave to re-plead. The
affirmative defenses set forth in Tecsys’ April 13, 2015 Answer to the Complaint [docket #89] are

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stricken. Tecsys shall file an Amended Answer in conformance with the federal rules and this order
on or before June 19, 2015.
DATED this 4th day of June, 2015, at Denver, Colorado.
BY THE COURT:

Michael E. Hegarty
United States Magistrate Judge

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