Walters v. Performant Recovery, Inc.

Filing 25

ORDER granting in part and denying in part Plaintiff's 15 Motion to Strike Defendant's Affirmative Defenses. See attached opinion. Signed by Judge Vanessa L. Bryant on 8/21/2015. (Nadler, S.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
TIFFANY WALTERS,
Plaintiff,

v.
PERFORMANT RECOVERY,
INC.
Defendant.

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CIVIL ACTION NO.
3:14-cv-01977 (VLB)

August 21, 2015

MEMORANDUM OF DECISION GRANTING AND DENYING IN PART PLAINTIFF’S
MOTION TO STRIKE DEFENDANT’S AFFIRMATIVE DEFENSES [Dkt. # 15]
Plaintiff Tiffany Walters brings claims under the Fair Debt Collection
Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”), and the Connecticut Unfair
Trade Practices Act, Conn. Gen. Stat. §§ 42-110a, et. seq. (“CUTPA”), against
Defendant Performant Recovery Inc. (“Performant”), a private debt collection
agency, in connection with Performant’s efforts to collect payment on Plaintiff’s
federal student loan.
I.

Background
The Complaint was originally filed in Connecticut Superior Court, on

November 21, 2014. [Dkt. #1-1, Compl. at 1]. On December 30, 2014, Defendant
removed this action to federal court. [Dkt. #1-2, Notice of Removal, at 2]. On
February 4, 2015, Defendant filed its Answer. See [Dkt. #14]. The Answer asserts
the following four affirmative defenses:
First Affirmative Defense
Plaintiff’s claims are barred, in whole or in part, because the
Complaint fails to state a claim upon which relief may be granted.
Second Affirmative Defense
Plaintiff[‘s] claims, in whole or in part, have been waived by plaintiff.
Third Affirmative Defense
Plaintiff’s claims are barred to the extent that any violation of the Fair
Debt Collection Practices Act by defendant, which defendant denies,
was not intentional and resulted from a bona fide error
notwithstanding the maintenance of procedures reasonably adapted
to avoid any such error.

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Fourth Affirmative Defense
Plaintiff’s action is barred, whole or in part, to the extent that it was
commenced after the running of any applicable statute of limitations.
[Id. at 4-5].
Six days later, on February 10, 2015, Plaintiff filed a Motion to Strike each of
the affirmative defenses for failure to comply with the pleading requirements in
Rule 8 of the Federal Rules of Civil Procedure and other legal deficiencies. [Dkt.
#15]. For the reasons that follow, the Court GRANTS, in part, and DENIES, in part,
Plaintiff’s motion to strike.
II.

Legal Standard
The court may on its own, or on a motion made by a party, “strike from a

pleading an insufficient defense or any redundant, immaterial, impertinent, or
scandalous matter.” Fed. R. Civ. P. 12(f). “Motions to strike are generally
disfavored, but are within the district court’s sound discretion.” Lamoureux v.
AnazaoHealth Corp., 250 F.R.D. 100, 102 (D. Conn. 2008). Beyond these basic
principles, there is much disagreement among courts in this Circuit regarding the
standards under which such motions are to be resolved.
Most courts, including the majority in this District, evaluate motions to
strike under a three-factor test, in which the plaintiff “must establish that: (1)
there is no question of fact that might allow the defense to succeed; (2) there is
no substantial question of law that might allow the defense to succeed; and (3)
[the plaintiff] would be prejudiced by the inclusion of the defense.” Vallecastro v.
Tobin, Melien & Marohn, No. 3:13-cv-1441 (SRU), 2014 WL 7185513, at *7 (D. Conn.
Dec. 16, 2014) (citing and quoting New England Health Care Emps. Welfare Fund
v. iCare Mgmt., LLC, 792 F. Supp. 2d 269, 288 (D. Conn. 2011)); see also Coach
Inc. v. Kmart Corps., 756 F. Supp. 2d 421, 425 (S.D.N.Y. 2010); Trustees of the
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Local 813 Ins. Trust Fund v. Wilner’s Livery Serv., Inc., No. 11-CV-3180 (DLI)
(CLP), 2012 WL 4327070, at *2 (E.D.N.Y. Sept. 19, 2012); Sanders v. Gifford, No.
9:11-CV-0326 (LEK/RFT), 2014 WL 1292220, at *6 (N.D.N.Y. Mar. 31, 2014). The
first two prongs of this test examine the legal sufficiency of the asserted defense.
See Coach Inc., 756 F. Supp. 2d at 425; Ellis v. Cygnus Enters., LLC, No. CV 11771 (SJF)(AKT), 2012 WL 259913, at *2 (E.D.N.Y. Jan. 3, 2012). This is “to be
determined solely upon the face of the pleading.” Coach Inc., 756 F. Supp. 2d at
425 (quoting Houston v. Manheim-New York, 2010 WL 744119, at *3 (S.D.N.Y. Mar.
3, 2010)).
As a result, “[d]istrict courts in the Second Circuit have split on whether to
apply the heightened [Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)] and
[Ashcroft v. Iqbal, 556 U.S. 622 (2009)] pleading standard to affirmative defenses.”
Vallecastro, 2014 WL 7185513, at *7 (citing cases). While courts in other districts
have applied Twombly and Iqbal to affirmative defenses, “[d]istrict judges within
the District of Connecticut” generally hold that these cases have not altered the
traditional three-factor test. Id. (citing Vale v. City of New Haven Police Dept., No.
3:11-cv-632 (CSH), 2013 WL 5532133, at *2 (D. Conn. Oct. 4, 2013), Whitserve, LLC
v. GoDaddy.com, Inc., No. 3:11-cv-948 (JCH), 2011 WL 5825712, at *2 (D. Conn.
Nov. 17, 2011), and Aros v. United Rentals, Inc., No. 3:10-cv-73 (JCH), 2011 WL
5238829, at *1 (D. Conn. Oct. 31, 2011)). Regardless, even under the traditional
three-factor approach, an affirmative defense must “give[] the plaintiff fair notice
of the nature of the defense.” MTA Metro-North R.R. v. Buchanan Marine, L.P.,
No. 3:05-cv-881 (PCD), 2006 WL 3544936, at *4 (D. Conn. Dec. 8, 2006); Aros, 2011
WL 5238829, at *5 (striking “unclear” affirmative defense where court could not

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“determine how th[e] allegation would constitute a legal or factual defense”);
Coach Inc., 756 F. Supp. 2d at 425 (“[C]onclusory assertions, absent any
supporting factual allegations are insufficient as a matter of law and fail to
provide a plaintiff with any notice as to how the defense applies to the plaintiff’s
claims.”) (citing Obabueki v. Int’l Bus. Machs. Corp., 145 F. Supp. 2d 371, 401
(S.D.N.Y. 2001)).
“If a court determines that a defense is legally insufficient, the court must
next determine whether inclusion of the defense would prejudice the plaintiff.”
Coach Inc., 756 F. Supp. 2d at 425-26. Increases in the time and expense of trial
and discovery demands “constitute sufficient prejudice to warrant striking an
affirmative defense.” Id. at 426 (citing Estee Lauder, Inc. v. Origins Natural Res.,
Inc., 189 F.R.D. 269, 272 (S.D.N.Y. 1999) and Specialty Minerals, Inc. v. PluessStaufer AG, 395 F. Supp. 2d 109, 114 (S.D.N.Y. 2005)).
Finally, where a defendant pleads “fraud or mistake” as an affirmative
defense, the defendant “must state with particularity the circumstances
constituting fraud or mistake.” Fed. R. Civ. P. 9(b). “To state an affirmative
defense with the required particularity, a party must: (1) specify the statements
that the party contends were fraudulent; (2) identify the speaker; (3) state where
and when the statements were made; and (4) explain why the statements were
fraudulent.” Trustees of the Local 813 Ins. Trust Fund, 2012 WL 4327070, at *2;
see also Yurman Design, Inc. v. Chaindom Enters., Inc., No. 99 Civ. 9307 (JFK),
2002 WL 3135891, at *3 (S.D.N.Y. Sept. 30, 2002). Put another way, “Rule 9(b)
particularity means the who, what, when, where, and how: the first paragraph of

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any newspaper story.” General Elec. Capital Corp. v. Lease Resolution Corp., 128
F.3d 1074, 1078 (7th Cir. 1997) (quotations and citation omitted).
Here, the parties vigorously contest whether or not “the plausibility
standard” articulated in Twombly and Iqbal “applies equally to affirmative
defenses.” Godson v. Eltman, Eltman & Cooper, P.C., 285 F.R.D. 255, 258
(W.D.N.Y. 2012); see [Dkt. #15-1, Pl.’s Memo. at 2-5; Dkt. #17, Def.’s Opp. at 2-5].
The Court need not resolve this dispute in order to rule upon Plaintiff’s motion,
because its conclusions as to the sufficiency of each affirmative defense would
be the same under either pleading standard.1
III.

Analysis

A.

First Affirmative Defense
Defendant avers that “Plaintiff’s claims are barred, in whole or in part,

because the Complaint fails to state a claim upon which relief may be granted.”
[Dkt. #14, Answer at 4]. Plaintiff contends that this statement “is not an
affirmative defense,” but is instead “the simple recitation of a Rule 12(b)(6)

In her motion, Plaintiff, citing to Menard v. Morris, No. 3:09-cv-001165 (VLB), ECF
No. 33 (D. Conn. Aug. 10, 2010), contends that this Court has already
“concluded that the heightened pleading standards for claims for relief crafted
in Twombly and Iqbal apply just as strictly to affirmative defenses.” [Dkt. #15-1,
Pl.’s Memo. at 4]. However, the text entry Order on which Plaintiff relies
indicates no such ruling. Instead, the Court quoted language from Aspex
Eyewear, Inc. v. Clariti Eyewear, Inc., 531 F. Supp. 2d 620, 623 (S.D.N.Y. 2008)
stating that “affirmative defenses which amount to nothing more than mere
conclusions of law and are not warranted by any asserted facts have no
efficacy.” Menard, No. 3:09-cv-001165 (VLB), at [Dkt. #33]. This passage from
Aspex is a direct quote from Shechter v. Comptroller of New York, 79 F.3d 265,
270 (2d Cir. 1996), a case decided over a decade before either Twombly or Iqbal.
See Aspex, 531 F. Supp. 2d at 623. That the Aspex court elsewhere in its
opinion stated that the heightened pleading standard articulated in Twombly
“applies to a . . . motion to strike an affirmative defense pursuant to Rule 12(f)”
does not mean that this Court has adopted that position as well. Id. at 622.

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motion to dismiss” which “must be asserted before pleading an answer.” [Dkt.
#15-1, Pl.’s Memo. at 5]. Plaintiff is mistaken.
First, “it is well settled that the failure-to-state-a-claim defense is a perfectly
appropriate affirmative defense to include in the answer.” Erickson Beamon, Ltd.
v. CMG Worldwide, Inc., No. 12 Civ. 5105 (NRB), 2014 WL 3950897, at *4 (S.D.N.Y.
Aug. 13, 2014) (quoting S.E.C. v. Toomey, 866 F. Supp. 719, 723 (S.D.N.Y. 1992));
see also Aros, 2011 WL 5238829, at *4 (“[A] party may include failure to state a
claim as an affirmative defense in its answer, and [] such a defense is
invulnerable as against the [12(f)] motion.”) (citation and quotation omitted); Vale,
2013 WL 5532133 at **1, 3, *3 n.2 (denying motion to strike affirmative defense
which pled only “Plaintiff fails to state a claim against Defendant” and citing and
quoting Aros); MTA Metro-North R.R., 2006 WL 3544936, at *3-4 (denying motion
to strike affirmative defense to counterclaim which stated solely that “defendants
have failed to state a claim upon which relief can be granted”).
Second, even if this bare assertion fails to satisfy the heightened Twombly
and Iqbal standard, Plaintiff does not identify, nor can the Court ascertain, any
“prejudicial harm to plaintiff” arising from the inclusion of this defense, and thus,
“the defense need not be stricken.” Cnty. Vanlines Inc. v. Experian Info.
Solutions, Inc., 205 F.R.D. 148, 153 (S.D.N.Y. 2002); see also Aros, 2011 WL
5238829, at *4 (denying motion to strike defense of failure to state a claim where
there was no indication that inclusion of the defense would result in prejudice).
The assertion of this special defense does not appreciably increase the amount
or cost of discovery which the parties would be required to undertake, if at all.

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Accordingly, Plaintiff’s motion is DENIED as to the First Affirmative
Defense.
B.

Second Affirmative Defense
Next, Defendant asserts that Plaintiff’s “claims, in whole or in part, have

been waived by plaintiff.” [Dkt. #14, Answer at 4]. “Waiver is the intentional
relinquishment of a known right.” Jenkins v. Indemnity Ins. Co. of N. Am., 205
A.2d 780, 784 (Conn. 1964). To establish waiver under Connecticut law, “[i]t must
be shown that the party understood its rights and voluntarily relinquished them
anyway.” Worth Constr. Co., Inc. v. Dep’t of Public Works, 54 A.3d 627, 631
(Conn. App. 2012). As Plaintiff points out in her motion, the affirmative defense is
devoid of any “facts stating or identifying how Plaintiff’s claims were waived.”
[Dkt. #15-1 Pl.’s Memo. at 6]. Without such facts, Plaintiff (and the Court) is left
guessing “how a waiver defense would apply here,” particularly, since “[t]here is
no indication that Plaintiff[] ha[s] intentionally relinquished any rights.” Coach
Inc., 756 F. Supp. 2d at 428 (concluding that bare allegation of waiver prevented
court from finding a “question of fact or law that might allow a waiver defense to
succeed” and was thus “insufficient as a matter of law”); see also Shaub &
Williams, LLP v. Augme Techs., Inc., No. 13 Civ. 2202 (GBD), 2014 WL 625390, at
*9 (S.D.N.Y. Feb. 14, 2014) (striking affirmative defense of waiver where Defendant
“ha[d] not alleged any fact supporting the assertion”). Prejudice to Plaintiff is
clear, as this bald legal conclusion, devoid of any facts, precludes Plaintiff from
“properly tailor[ing] her discovery and motion practice as the case progresses.”
[Dkt. #15-1, Pl.’s Memo. at 5].

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Defendant responds only with its objection to the application of “the
heightened pleading standard of Twombly and Iqbal [] to affirmative defenses.”
[Dkt. #17, Opp. at 6]. As this bare allegation of waiver fails to “give[] the plaintiff
fair notice of the nature of the defense,” the affirmative defense would not survive
even under a more generous pleading standard. MTA Metro-North R.R. v.
Buchanan Marine, L.P., 2006 WL 3544936, at *4.
In addition, whether Plaintiff may waive either her FDCPA or CUTPA claims
is far from clear. “The FDCPA is remedial in nature and should be liberally
construed.” Lee v. Kucker & Bruh, LLP, 958 F. Supp. 2d 524, 528 (S.D.N.Y. 2013)
(citing Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d 22, 27 (2d Cir. 1989).
The Second Circuit’s recent treatment of a similarly “protective statute,” the
FLSA, holding that stipulated dismissals reached in connection with claims under
the statute must be approved by the district court or the Department of Labor,
suggests that a waiver argument under the FDCPA does not have a high
likelihood of success. Cheeks v. Freeport Pancake House, Inc., No. 14-299-cv,
2015 WL 4664283, at *7 (2d Cir. Aug. 7, 2015). Indeed, the lone appellate court
which appears to have addressed waiver of any rights under the FDCPA held only
that waiver of a prior cease communication directive was possible. See Clark v.
Capital Credit & Collection Servs., Inc., 460 F.3d 1162, 1171 (9th Cir. 2006). But
even there, the Ninth Circuit reaffirmed, “[o]ut of an abundance of caution,” the
“obvious” conclusion that “a consumer’s consent cannot waive protection from
the practices the FDCPA seeks to eliminate, such as false, misleading, harassing,
or abusive communications. Permitting such a waiver would violate the public
policy goals pursued by the FDCPA.” Id. at n. 5. Here, Plaintiff appears to base

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her FDCPA claim not on a cease communication directive, but instead, on
Defendant’s “requiring a payment that was more than reasonable and
affordable[,] . . . . misrepresenting the timing of rehabilitation payments[,] . . .
failing to consider Plaintiff’s financial circumstances when computing a
rehabilitation payment[,] . . . [and] disclosing information about Plaintiff’s debt to
an unauthorized third party.” [Dkt. #1-2, Compl. at ¶¶ 38-41].
Moreover, CUTPA, like the FDCPA, “is remedial in nature,” and at least two
Connecticut courts have expressly held that such claims “cannot be waived.”
See Kaeser Const. Co. v. Schimmeck, No. FBTCV136035639S, 2015 WL 4173036,
at *3 (Conn. Super. Jun. 8, 2015) (concurring with holding in T.D. Bank, N.A. v.
Nutmeg Invs., LLC, No.CV085009473S, 2010 WL 4277552 (Conn. Super. Sept. 29,
2010)).2
Accordingly, Plaintiff’s motion is GRANTED as to the Second Affirmative
Defense, with leave to file an Amended Answer stating the factual basis of the
waiver special defense within 21 days of the date of this decision.
C.

Third Affirmative Defense
Defendant contends that “Plaintiff’s claims are barred to the extent that any

violation of the [FDCPA] by defendant, which defendant denies, was not
intentional and resulted from a bona fide error notwithstanding the maintenance
of procedures reasonably adapted to avoid any such error.” [Dkt. #14, Answer at
4]. As an initial matter, Plaintiff correctly points out that “[b]ecause the bona fide
error defense rests upon mistake, the circumstances surrounding the mistake
must be stated with particularity.” Nguyen v. HOVG, LLC, No. 14-cv-837 (BTM)

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The Court will not address these issues beyond the above observations unless
prompted by the parties’ subsequent filings.
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(RBB), 2014 WL 5361935, at *2 (S.D. Cal. Oct. 20, 2014) (citing Fed. R. Civ. P. 9(b));
Wiebe v. Zakheim & Labrar, P.A., No. 6:12-cv-1200-ORL-18TBS, 2012 WL 5382181,
at *2 (M.D. Fla. Nov. 1, 2012) (“A claim of bona fide error is tantamount to a claim
of mistake and therefore, the Defendant must plead this defense with the
particularity required by Rule 9(b).”); Konewko v. Dickler, Kahn, Sloikowsi &
Zavell, Ltd., No. 07-C-5338, at *1 (N.D. Ill. May 14, 2008) (finding defendant
“obligated to comply with both Fed. R. Civ. P. 8 and 9(b)” when asserting bona
fide error defense under the FDCPA); see also [Dkt. #15-1, Pl.’s Memo. at 5-6].
Thus, this affirmative defense is subject to a heightened pleading standard,
regardless of whether Iqbal or Twombly generally apply to affirmative defenses.
See Fed. R. Civ. P. 9(b). As stated above, to satisfy Rule 9(b), the defense must
articulate “who, what, when, where, and how” the bona fide error occurred.
General Elec. Capital Corp., 128 F.3d at 1078.
Here, again, the defense, as pled, fails to provide any of this information.
Consequently, it does “not plead facts that would give [Plaintiff] sufficient notice
of [the] specific mistake that [the Defendant] is referencing.” Bradshaw v. Hilco
Receivables, LLC, 725 F. Supp. 2d 532, 537 (D. Md. 2010); see also Godson, 285
F.R.D. at 259 (striking defense of bona fide error where there was “no indication
whatsoever of what that error might be”).
Defendant responds by citing Vallecastro, and stating that the Plaintiff
“‘does not allege that there is no question of fact that might allow the defense to
succeed, she does not contest that a substantial question of law exists that might
allow the defense to succeed,’ and she does not allege prejudice.” [Dkt. #17,
Def.’s Opp. at 7 (quoting Vallecastro, 2014 WL 7185513, at *8)]. Vallecastro is

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distinguishable because the plaintiff did not contend that the defense failed to
comply with Rule 9(b), or otherwise suggest that she was unaware of the error(s)
relied upon by the defendant in support of the defense. Cf. [Dkt. #15-1, Pl.’s
Memo. at 5-6]. Instead, the plaintiff challenged the sufficiency of the defense by
claiming that “pleading ‘procedures reasonably adapted to avoid any such error’
must require more than a mere conclusory assertion to that effect’” and went “on
to describe the kind of evidence required to prevail on such a defense.”
Vallecastro, 2014 WL 7185513, at *8. In addition, the plaintiff did not “articulate
how she would be prejudiced.” Id. Here, Plaintiff asserts, and the Court agrees,
that absent any facts surrounding the error(s) Defendant intends to rely upon in
support of the defense, Plaintiff will be unable to “properly tailor her discovery
and motion practice as the case progresses.” [Dkt. #15-1, Pl.’s Memo. at 5].
Moreover, the failure to plead any facts regarding the error or any other aspect of
this defense prevents this Court from determining “how this allegation would
constitute a legal or factual defense.” Aros, 2011 WL 5238829, at *5. Finally, and
relatedly, in good faith, the Plaintiff could neither assert that there is no question
of fact that might allow the defense to succeed, or contend that no substantial
question of law exists that might allow the defense to succeed where the
Defendant has failed to plead, and thus the Plaintiff has no idea of, the factual
basis for the special defense.
Accordingly, Plaintiff’s motion is GRANTED as to the Third Affirmative
Defense, with leave to file an Amended Answer stating the factual basis of the
bona fide error special defense within 21 days of the date of this decision.

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D.

Fourth Affirmative Defense
Finally, Defendant pleads that “Plaintiff’s action is barred, whole or in part,

to the extent that it was commenced after the running of any applicable statute of
limitations.” [Dkt. #14, Answer at 5]. By failing to identify the particular statute
relied upon, this defense, like the others, is vague and barebones. Such laxity
suggests that there may not be a good faith basis for the special defense,
particularly since the statute of limitations governing FDCPA and CUTPA claims
is one and three years, respectively, the Complaint was originally filed on
November 21, 2014, and the Complaint suggests that Defendant first contacted
Plaintiff “[i]n November of 2013.” [Dkt. #1-2, Compl. at ¶ 4]; see also 15 U.S.C. §
1692k(d); Conn. Gen. Stat. § 42-110g(f). However, the Second Circuit instructs
that such information, “though helpful, is not required in the pleading,” and that a
statute of limitations “defense is sufficiently raised for purposes of Rule 8 by its
bare assertion.” Kulzer v. Pittsburgh-Corning Corp., 942 F.2d 122, 125 (2d Cir.
1991) (emphasis in original) (quoting Santos v. Dist. Council of New York City,
619 F.2d 963, 967 (2d Cir. 1980)); see also Cattaraugus Cnty. Project Head Start v.
Exec. Risk Indem., Inc., No. 00-CV-0167E(F), 2000 WL 1737943, at *2 (W.D.N.Y.
Nov. 8, 2000) (denying motion to strike defense consisting solely of the word
“estoppel” upon concluding that “[t]he affirmative defense of estoppel is akin to
that of the statute of limitations” and noting that the “statute of limitations
defense is sufficiently raised under FRCP 8 by its mere assertion”).3

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Although the Second Circuit has not revisited this conclusion since Twombly
and Iqbal, its vitality has not been questioned and district courts continue to
apply it. See, e.g., Valentine Props. Assocs., LP v. U.S. Dep’t of Housing &
Urban Dev., 785 F. Supp. 2d 357, 370 n. 4 (S.D.N.Y. 2011) (citing and quoting
Santos).
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Accordingly, Plaintiff’s motion is DENIED as to the Fourth Affirmative
Defense.
IV.

Conclusion
Based upon the foregoing reasoning, Plaintiff’s motion is GRANTED in part

and DENIED in part. Plaintiff’s motion is DENIED as to Defendant’s First and
Fourth Affirmative Defenses. Plaintiff’s motion is GRANTED as to Defendant’s
Second and Third Affirmative Defenses. The Court GRANTS Defendant leave to
amend its deficiently pled defenses by 21 days following the issuance of this
Order.
IT IS SO ORDERED.
________/s/______________
Hon. Vanessa L. Bryant
United States District Judge
Dated at Hartford, Connecticut: August 21, 2015

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