Kahama VI, LLC v. HJH, LLC et al
Filing
62
ORDER: Plaintiff's Cross Motion to Strike Defendant's Affirmative Defense (Dkt. 26) is DENIED. Plaintiff's Motion for Summary Judgment Against the Defendants (Dkt. 38) is GRANTED in part as to the issue of liability under the Note a nd Guaranties. Plaintiff's Motion to Strike the Defendants' Response and Affidavit as to Plaintiff's Motion for Summary Judgment (Dkt. 48) is DENIED. Plaintiff's Motion for Leave to File Reply Brief (Dkt. 48) is DENIED as moot. Plaintiff's Motion to Reopen Discovery (Dkt. 48) is GRANTED. Discovery is limited to (1) the affirmative defense regarding the state court quiet title action, Case No.: 2008-20156-CINS, and (2) the damages amount under the Note and Guaranties . The new fact discovery deadline is June 24, 2013. The dispositive motion deadline is July 15, 2013. The Pre-Trial Conference is re-scheduled for THURSDAY, August 8, 2013 at 10:00 A.M. This case is re-set for NON-JURY TRIAL during the September 3, 2013 trial term. Signed by Judge James S. Moody, Jr on 4/24/2013. (LN)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
KAHAMA VI, LLC,
Plaintiff,
v.
Case No. 8:11-cv-2029-T-30TBM
HJH LLC, et al.,
Defendants.
_____________________________________/
ORDER
THIS CAUSE comes before the Court upon Plaintiff’s Cross Motion to Strike
Defendant’s Affirmative Defense (Dkt. 26), Plaintiff’s Motion for Summary Judgment
Against the Defendants (Dkt. 38), Defendants’ Response in Opposition to Plaintiff’s Motion
for Summary Judgment (Dkt. 40), and Plaintiff’s Motion to Strike the Defendants’ Response
and Affidavit as to Plaintiff’s Motion for Summary Judgment and/or for Leave to File Reply
Brief and/or Reopen Discovery (Dkt. 48). The Court, having reviewed the motions,
response, record evidence, and being otherwise advised in the premises, concludes the
motions to strike should be denied, the motion for summary judgment should be granted in
part, the motion for leave to file reply brief should be denied as moot, and the motion to
reopen discovery should be granted.
BACKGROUND1
Plaintiff Kahama VI, LLC, brings this action to recover damages for breach of a
promissory note (“Note”) against Defendant HJH, LLC, and to recover damages for breach
of guaranty agreements (“Guaranties”) executed by Defendants Robert McMillan, III,
William R. Riveiro, Kirsten L. Riveiro, and John Bahng. After filing the above motions,
Kahama filed a notice of partial dismissal as to Defendant Kirsten Riveiro, which the Court
granted. See Dkt. 61. References in the following sections to “Defendants” include the
remaining defendants: HJH, McMillan, William Riveiro, and Bahng.
The facts are relatively straightforward and undisputed.2 On July 7, 2004, HJH
executed and delivered the Note to Coquina Bank for $1,300,000.00. Kahama attached a
copy of the Note and all other instruments to its amended complaint. See Dkt. 12:1- 12:16.
Also on July 7, 2004, McMillan, Riveiro, and Bahng executed and delivered the Guaranties
to Coquina Bank. The Defendants executed a renewal of the Note and Guaranties on
September 7, 2005, a change in terms agreement on March 7, 2006, and another renewal on
March 31, 2007.
On February 5, 2008, the FDIC approved the merger of the Royal Bank of Canada
(“RBC”) with Coquina. Then, on September 5, 2008, RBC assigned the Note and Guaranties
to Landmark Equity Fund I, which then assigned them to Kahama on February 16, 2010.
1
These facts are taken in a light most favorable to Defendants, the non-movant.
2
Although Defendants denied most of the facts in their answer, they have not put forth any
record evidence disputing the underlying facts of the instruments.
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Kahama alleges that Defendants made their last payment on the Note on December 31, 2007,
resulting in the principal sum at default of $1,289,921.55, plus interest upon the principal.
Defendants present no material disputes in the record as to any of the above facts.
In their answer to Kahama’s amended complaint, Defendants asserted a single
affirmative defense related to a pending quiet title action in state court based on the same
property that secured the Note. In response to Kahama’s motion for summary judgment,
Defendants explained their affirmative defense was based on an oral contract that Kahama’s
predecessor-in-interest made not to sue until the quiet title action was completed. They also
added the following defenses: whether Kahama correctly calculated the amount owing under
the Note, whether Kahama is the proper holder of the instruments, and whether Defendants
were given the proper notice of assignments and acceleration on the Note.
SUMMARY JUDGMENT STANDARD OF REVIEW
Motions for summary judgment should be granted only when the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits,
show there is no genuine issue as to any material fact and that the moving party is entitled
to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317,
322 (1986). The existence of some factual disputes between the litigants will not defeat an
otherwise properly supported summary judgment motion; “the requirement is that there be
no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986) (emphasis in original). The substantive law applicable to the claimed causes of action
will identify which facts are material. Id. Throughout this analysis, the court must examine
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the evidence in the light most favorable to the non-movant and draw all justifiable inferences
in its favor. Id. at 255.
Once a party properly makes a summary judgment motion by demonstrating the
absence of a genuine issue of material fact, whether or not accompanied by affidavits, the
nonmoving party must go beyond the pleadings through the use of affidavits, depositions,
answers to interrogatories and admissions on file, and designate specific facts showing that
there is a genuine issue for trial. Celotex, 477 U.S. at 324. The evidence must be
significantly probative to support the claims. Anderson, 477 U.S. at 248-49 (1986).
This Court may not decide a genuine factual dispute at the summary judgment stage.
Fernandez v. Bankers Nat’l Life Ins. Co., 906 F.2d 559, 564 (11th Cir. 1990). “[I]f factual
issues are present, the Court must deny the motion and proceed to trial.” Warrior Tombigbee
Transp. Co. v. M/V Nan Fung, 695 F.2d 1294, 1296 (11th Cir. 1983). A dispute about a
material fact is genuine and summary judgment is inappropriate if the evidence is such that
a reasonable jury could return a verdict for the nonmoving party. Anderson, 477 U.S. at 248;
Hoffman v. Allied Corp., 912 F.2d 1379 (11th Cir. 1990). However, there must exist a
conflict in substantial evidence to pose a jury question. Verbraeken v. Westinghouse Elec.
Corp., 881 F.2d 1041, 1045 (11th Cir. 1989).
DISCUSSION
I.
Claim for Judgment on Note and Guarantees
Having reviewed the record, and all of its inferences, in the light most favorable to the
nonmoving party, the Court finds that Kahama is entitled to an entry of a final summary
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judgment against the Defendants on the issue of liability under the Note and Guaranties.
Defendants cannot demonstrate a genuine issue as to the indebtedness owed to Kahama.
The Note and Guaranties provide that Florida law will govern. “Under Florida law,
the elements for a breach of contract action are: (1) a valid contract; (2) a material breach;
and (3) damages.” Wells Fargo Bank v. S. Boys Inv. Group, LLC, 2011 WL 2446594, at *2
(M.D. Fla. May 26, 2011) (quoting J.J. Gumberg Co. v. Janis Servs., 847 So. 2d 1048, 1049
(Fla. 4th DCA 2003)). “A promissory note, mature and regular on its face, is admissible into
evidence without extrinsic proof of its execution or authenticity and, as evidence, is sufficient
to establish a prima facie case. All attacks upon it, or the debt it represents, must be made
by way of affirmative defenses as to which the burden of proof is on the defense.” Haycook
v. Ostman, 397 S. 2d 743, 743-44 (Fla. 5th DCA 1981).
“A guaranty is a collateral promise to answer for the debt or obligation of another.”
Fed. Deposit Ins. Corp. v. Univ. Anclote, Inc., 764 F.2d 804, 806 (11th Cir. 1985). “In
Florida, the elements of an action for breach of a guaranty arise from a debtor’s default and
the guarantor’s subsequent failure to pay.” Bank First v. Guillem, 2009 WL 1930190, at *5
(M.D. Fla. 2009). The rules governing contracts apply generally to guaranty contracts.
Lockheed Martin Corp. v. Galaxis USA, Ltd., 222 F. Supp. 2d 1315, 1325 (M.D. Fla. 2002).
Thus, the three elements of breach of contract in Florida, (1) valid contract, (2) a material
breach, and (3) damages, are the relevant elements of a guaranty.
Kahama moves for summary judgment on its claim to recover damages for breach of
the Note and Guaranties. Kahama asserts, wrongly, that Defendants have admitted all
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allegations in the amended complaint by admitting those allegations in previous pleadings,
namely, Defendants’ motion to dismiss based on the state court action wherein Kahama’s
predecessor-in-interest sought judgment on the same instruments. “A party may state as
many separate claims or defenses as it has, regardless of consistency.” Fed. R. Civ. P.
8(d)(3). Thus, Defendants’ arguments in their motion to dismiss are not considered
admissions for purposes of summary judgment.
Kahama supports its motion for summary judgment with the affidavit of Roger Hoss,
who represents himself as the Supervisor, authorized signatory for Kahama, and custodian
of Kahama’s business records. Based on this personal knowledge of Kahama’s accounts,
Hoss states that HJH executed and delivered on July 7, 2004, the Note to Coquina Bank for
$1,300,000, personally guaranteed by the other Defendants, per precise copies of the Note
and Guaranties attached to the amended complaint. He also testifies: that the Note and
Guarantees were renewed or modified three times (2005, 2006, 2007); RBC merged with
Coquina on February 5, 2008; RBC assigned the instruments to Landmark Equity on
September 5, 2008; and Landmark Equity assigned the instruments to Kahama on February
16, 2010. Hoss states that the instruments are in default and that Kahama accelerated
payment of the balance with notice to Defendants. According to the records, “[the
Defendants’] last payment was received on or before 12/31/07, resulting in the principal sum
at default of $1,289,921.55, plus interest upon the principal currently totaling $567,045.93,
at the rate of 7.75% from the date of last payment, through 11/1/12, plus Plaintiff’s attorneys’
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fees and the costs of this action and those of a since-dismissed action to enforce this debt.”
Dkt. 38-1, ¶ 19.
Based on the above affidavit and instruments attached to the amended complaint,
Kahama has showed that Defendants have breached the Note and Guaranties by defaulting
on the Note and failing to pay what is owed. Defendants, as the nonmoving party, must now
rebut this evidence by going beyond the pleadings through the use of affidavits, depositions,
answers to interrogatories and admissions on file, and designate specific facts showing that
there is a genuine issue for trial. Celotex, 477 U.S. at 324. The evidence must be
significantly probative to support the claims. Anderson, 477 U.S. at 248-49 (1986).
Defendants have failed to show any disputed material facts precluding summary
judgment on the issue of liability under the instruments. Defendants primarily rely upon their
denials in their answer to the amended complaint, but they carry the burden in responding
to the motion for summary judgment to show specific facts based on the record evidence that
they are not in default on the Note and Guaranties.
McMillan’s affidavit is the sole piece of evidence proffered by Defendants to support
their opposition to summary judgment.3 However, McMillan’s sworn statements lack
significant probative value because he fails to identify specific factual disputes on the issue
of liability. Notably, McMillan does not deny the existence or validity of the Note and
Guaranties nor does he deny that the Defendants are in default on their payments. Indeed,
3
McMillan testifies as “the managing member of HJH” and also presumably in his personal
capacity as a guarantor.
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McMillan only makes statements relevant to affirmative defenses that Defendants had never
before raised.4 This is inadequate to rebut Hoss’ affidavit based on Kahama’s account
history records.
Accordingly, the undisputed material facts establish Kahama’s entitlement to recovery
under the Note and Guaranties. Therefore, Kahama is granted summary judgment on the
issue of liability under the Note and Guaranties. The only issue potentially precluding an
award of damages in its favor is whether Defendants’ affirmative defenses have merit.
Because the Court finds more discovery is required on the issue of one of Defendants’
affirmative defenses, the Court grants Kahama’s motion to reopen discovery for sixty days.
II.
Affirmative Defenses
“Failure to plead an affirmative defense generally results in a waiver of that defense.”
Pensacola Motor Sales Inc. v. E. Shore Toyota, LLC, 684 F.3d 1211, 1221-22 (11th Cir.
2012) (quoting Latimer v. Roaring Toyz, Inc., 601 F.3d 1224, 1239 (11th Cir. 2010)).
However, “if a plaintiff receives notice of an affirmative defense by some means other than
pleadings, the defendant’s failure to comply with Rule 8(c) does not cause the plaintiff any
prejudice. When there is no prejudice, the trial court does not err by hearing evidence on the
4
McMillan states in his affidavit: “I did not receive adequate or proper notice of the
transfers;” “I did not receive Notice of any acceleration of the Note or any subsequent amendments;”
“I do not believe the alleged calculation of any alleged amount due under the Notes is correct;” “I
am not certain as to who the true party in interest and holder of the alleged Original Note and
subsequent notes is;” and “Upon information and belief, Defendant’s [sic] have not filed with the
Court the alleged original Note, the alleged subsequent Renewals and the alleged assignments of the
Notes and Renewals.” Dkt. 41, ¶ 2, 3, 4, 5, 6. Although Defendants fail to identify these new
allegations as affirmative defenses, the Court treats them as such and addresses their merits in the
following section.
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issue.” Pensacola Motor, 684 F.3d at 1222 (quoting Grant v. Preferred Research, Inc., 885
F.2d 795, 797 (11th Cir. 1989)); see Hewitt v. Mobile Research Tech., Inc., 285 Fed. App’x
694, 696 (11th Cir. 2008) (“When a plaintiff has notice that an affirmative defense will be
raised at trial, the failure of the defendant to plead the affirmative defense does not prejudice
the plaintiff, and it is not error for the district court to hear evidence on the issue.”). In the
absence of a plaintiff showing prejudice from the delay, an affirmative defense raised for the
first time a month before trial is permitted. Pensacola Motor, 684 F.3d at 1222 (affirming
district courts who have allowed affirmative defenses raised for first time a month before
trial).
Defendants raised a single affirmative defense in their answer to the amended
complaint. The remaining affirmative defenses were raised for the first time in their response
to Kahama’s motion for summary judgment. However, because this response was made well
in advance of trial and the Court is granting Kahama’s motion to reopen discovery, there is
no discernable prejudice.
A.
Oral Modification of Contract
Defendants’ amended complaint included the following labeled as an affirmative
defense:
1. There is a related case ongoing in Circuit court in Volusia County, Florida,
with the case number of 2008-20156-CINS.
2. The above referenced case is directly related to these proceedings in that
HJH, LLC, seeks relief from Volusia County, Florida; City of New Smyrna
Beach, Florida; et al, for the property purchased in the case at hand. When
HJH, LLC bought the land at issue in this case they relied on Volusia County’s
1925 Plat and the 1945 Resubdivision, which both indicated that HJH, LLC’s
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Property extended to the Atlantic Ocean, or at a minimum, east to a depth of
three hundred (300) feet.
3. HJH, LLC made extensive preparations including meetings with the city to
build a multi-family residential unit condominium on the property at issue in
this case.
4. The Site Plan Application was approved, and then subsequently amended
to reflect the number of units.
5. HJH, LLC, had previously been approved for up to fourteen (14) units, and
attempted to change the number of units to eight (8).
6. The City of New Smyrna Beach has refused to allow any development on
the Property, claiming that HJH, LLC does not own about half of the property
that it previously purchased and contained within HJH, LLC’s Deed, and at
issue in the present case.
7. The City of New Smyrna Beach, and/or Volusia County, now currently
claim ownership over that portion of the Property at issue in this case.
8. The outcome of the above referenced case directly relates to the case at
issue and the case at issue should be stayed pending the outcome of the abovementioned case.
Dkt. 19. In their response to Kahama’s motion for summary judgment, Defendants flesh out
this oblique defense. They rely upon McMillan’s affidavit wherein he alleges that Landmark
Equity entered into an oral agreement not to file suit on the Note until the quiet title action
against the City of New Smyrna Beach was completed.
The details are not clear from the affidavit, but it appears two separate deals were
made. First, Roger Hoss, as managing member of Landmark, agreed not to file suit on the
Note in exchange for McMillan selling a home that Landmark owned without him earning
a commission. McMillan states that he sold the home without taking a commission and
Landmark made a “tidy profit in the worst market I have seen in my thirty plus years as a
broker.” Dkt. 41, ¶ 17.
Page 10 of 18
Second, “[o]n 7/1/2009 Mr. Hoss and Mr. Menia5 agree that if I continue to assist Old
Republic Title Company and their attorneys, giving depositions, advice and background that
they will not file suit and that if HJH loses the suit against the City of New Smyrna Beach
Landmark and HJH will split the future settlement we would receive from Old Republic Title
Company. At that time Mr. Hoss, Mr. Menia and I agreed that if we lost HJH would get part
of the title settlement to cover HJH’s six hundred thousand dollar down payment.” Dkt. 41,
¶ 21.
The obvious problem with the alleged oral contracts not to sue is that the Note
contains an express provision that all modifications or amendments must be “in writing
signed by the party against whom enforcement of any waiver, modification, change,
amendment or discharge is sought.” Dkt. 12-1, ¶ 4.5. However, under Florida law, “a
written contract or agreement may be altered or modified by an oral agreement if the latter
has been accepted and acted upon by the parties in such manner as would work a fraud on
either party to refuse to enforce it. . . . An oral modification under these circumstances is
permissible even though there was in the written contract a provision prohibiting its alteration
except in writing.” Fidelity & Deposit Co. of Maryland v. Tom Murphy Constr. Co., Inc.,
674 F. 2d 880, 884 (11th Cir. 1982) (quoting Professional Ins. Corp. v. Cahill, 90 So. 2d 916,
918 (Fla. 1956)). However, “oral modifications are effective despite prohibitive language
5
The Court is unsure who Mr. Menia is.
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in the contract only where clear and unequivocal evidence of a mutual agreement is
presented.” Id. at 885.
The Court cannot rule on this affirmative defense at this time because the record was
not developed on this issue of an oral modification or the status of the quiet title action
pending in state court. As such, Kahama’s motion to reopen discovery is granted as to this
affirmative defense. Kahama may address issues such as the statute of frauds in a new
motion for summary judgment on the Defendants’ affirmative defense at the close of the new
discovery period.
B.
Presentment
The proper party with standing to foreclose a note and mortgage is the
holder of the note and mortgage or the holder’s representative. Thus, the party
seeking foreclosure must present evidence that it holds the note and mortgage
in question in order to proceed with its foreclosure action. A plaintiff must
tender the original promissory note to the trial court or seek to reestablish the
note under section 673.3091, Florida Statutes (2010). If the note does not
name the plaintiff as the payee, the note must bear an endorsement in favor of
the plaintiff or a blank endorsement. Alternatively, the plaintiff may submit
evidence of an assignment from the payee to the plaintiff or an affidavit of
ownership to prove its status as a holder of the note.
Richards v. HSBC Bank USA, 91 So. 3d 233, 234 (Fla. 5th DCA 2012) (internal citations
omitted) (reversing summary judgment in favor of note holder because, although assigned
to holder, the allonge to the note reflected another trust was the note’s payee). In summary,
“[if a party] is not in possession of the original note, and cannot reestablish it, the party
simply may not prevail in an action on the note.” Dasma Invs., LLC v. Realty Assocs. Fund
III, L.P., 450 F. Supp. 2d 1294, 1302 (S.D. Fla. 2006) (granting summary judgment because
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plaintiff undisputedly was not in possession of original note, merely held “addendums”
which were dependent on note, and plaintiff did not make any attempt to reestablish the note
pursuant to § 673.3091).
Defendants argue that Kahama’s motion for summary judgment should be denied
because Kahama failed to file the original note or reestablish the note.6 In support of this
argument, McMillan states in his affidavit that “I am not certain as to who the true party in
interest and holder of the alleged Original Note and subsequent notes is.” Dkt. 41, ¶ 5.
This argument fails because any presentment issue was clearly waived in the note:
“Presentment. BORROWER, including all guarantors, sureties and endorser hereby severally
(a) waive diligence, presentment for payment, demand and protest and also notice of protest,
dishonor, acceleration, intent to accelerate, and nonpayment.” Dkt. 12-1, ¶ 2.2. See Stearns
Bank Nat’l Assoc. v. Marrick Props., LLC, 2012 WL 1155657, at * 3 (M.D. Fla. April 5,
2012) (quoting Chris Craft Indus., Inc. v. Van Valkenberg, 267 So. 2d 642, 646 (Fla. 1972)).
C.
Conditions Precedent
i.
Notice of Acceleration
Defendants argue they were not given proper notice of acceleration. Specifically, they
argue that “[t]he Amended Complaint only contains a general allegation, that the debt was
accelerated Amended Complaint ¶ 27, and does not contain any specific allegation of the date
of any acceleration, where notice was provided to, that notice was provided to the guarantors
6
Black’s Law Dictionary defines “presentment” as “the formal production of a negotiable
instrument for acceptance or payment.”
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or any copy of a document accelerating such debt.” Dkt. 40, ¶ 11. In support of this
affirmative defense, McMillan states in his affidavit that “I did not receive Notice of any
acceleration of the Note or any subsequent amendments.” Dkt. 42, ¶ 3.
Defendants cannot defend themselves against Kahama’s claim on the grounds that
they failed to receive proper notice of acceleration because the Note specifically waives
“notice of protest, dishonor, acceleration, intent to accelerate, and nonpayment.” Dkt. 12-1,
¶ 2.2. Even if Defendants Riveiro and Bahng, solely as guarantors, wished to defend on
failure to receive notice of acceleration, that argument fails because the guaranty agreement
also waives “grace, demand, protest, notice of intent to accelerate, notice of acceleration, and
presentment with respect to this Guaranty Agreement, and notice, demand, protest, notice of
acceleration, notice of intent to accelerate and presentment with respect to the Obligations.”
Dkt. 12-2, ¶ 8. Therefore, the affirmative defense of lack of notice of acceleration fails.
ii.
Notice of Assignment
Defendants also argue that they never received “actual notice of transfers and
assignments of the alleged Note and Renewals.” Dkt. 40, ¶ 14 (ii). In support of this
argument, McMillan in his affidavit states, “The Note allegedly sued upon herein was
allegedly transferred multiple times and I did not receive adequate or proper notice of the
transfers.” Dkt. 41, ¶ 2.
The Guaranty Agreement states, “Guarantor, as primary obligor, agrees not to assert
any defense available to Borrower against Lender with regard to the Obligations, other than
the defenses of prior performance or limitations, including any defense based upon an
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election of remedies of any type or duty of Lender to disclose information of any type to
Guarantor regarding Borrower or the Obligations.” Dkt. 12-2, ¶ 8 (emphasis added). From
this language, the three remaining guarantors in their individual capacity, Defendants
McMillan, Riveiro, and Bahng, have waived any right to notice of assignment of the Note.
As for Defendant HJH, the Note provides for the lender to assign its interest:
“Transfer. LENDER’S interest in this Note may be sold, transferred, hypothecated, assigned,
participated, pledged or encumbered.” Dkt. 12-1, ¶ 2.3. There is no contractual right to
notice of any assignment, and HJH does not point to any statutory right of notice of
assignment. Therefore, the affirmative defense of lack of notice of assignment fails.
Accordingly, Defendants’ affirmative defenses of failure to comply with conditions
precedent fail.
D.
Setoff
Defendants submitted McMillan’s statement that “I do not believe the alleged
calculation of any alleged amount due under the Notes is correct.” The Court interprets that
to be an affirmative defense of setoff of amounts paid because Defendants do not dispute that
the Note and Guaranties are in default. Kahama did not submit the actual records upon
which Hoss relied in evaluating the amount in default, but neither did Defendants submit
alternative records to show Hoss miscalculated the damages amount. As such, if Defendants
wish to dispute Kahama’s calculations, they may seek the payment history ledgers that
Kahama relies upon in their calculations during the reopened discovery period.
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D.
Pending Foreclosure Action
Defendants object to Kahama bringing the present action for a monetary judgment
against them while also seeking to foreclose on the commercial property securing the Note
in a separate civil suit before this Court, 6:12-cv-1922-JSM-TBM. The Court acknowledges
that it is unusual for a plaintiff to severe the two causes of action, but nothing precludes a
party from seeking them in separate suits as long as the plaintiff did not receive complete
satisfaction from one of the remedies. See LPP Mortg. Ltd. v. Cacciamani, 924 So. 2d 930,
931 (Fla. 3d DCA 2006) (“[A] suit on a guaranty and a foreclosure action are not inconsistent
remedies, and therefore pursuit of either of those remedies without satisfaction is not a bar
to the pursuit of the other.” (quoting Gottschamer v. August, Thompson, Sherr, Clark &
Shafer, P.C., 438 So. 2d 408, 409 (Fla. 2d DCA 1983))). The Court notes that although the
foreclosure action was transferred to the Tampa division, Kahama has not yet moved to
consolidate it with the present action.
As a final matter, if Defendants seek to introduce affidavits in support of their
affirmative defenses upon which they carry the burden, all sworn testimony must adhere to
the requirements set forth in 28 U.S.C. ¶ 1746.
STANDARD FOR MOTION TO STRIKE
Under Rule 12(f) of the Federal Rules of Civil Procedure, the Court “may strike from
a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous
matter.” Fed. R. Civ. P. 12(f). Rule 12(f) limits the time period for a party to make a motion
to strike, requiring the movant to file either “before responding to the pleading or, if a
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response is not allowed, within 21 days after being served with the pleading.” Fed. R. Civ.
P. 12(f). It is well settled among courts in this circuit that motions to strike are generally
disfavored and will usually be denied unless it is clear the pleading sought to be stricken is
insufficient as a matter of law. See, e.g., Meth Lab Cleanup, LLC v. Spaulding Decon, LLC,
2011 WL 398047, at *1 (M.D. Fla. 2011). “A court will not exercise its discretion under the
rule to strike a pleading unless the matter sought to be omitted has no possible relationship
to the controversy, may confuse the issues, or otherwise prejudice a party.” Reyher v. Trans
World Airlines, Inc., 881 F. Supp. 574, 576 (M.D. Fla. 1995).
Kahama seeks to strike the Defendants’ affirmative defense and response to Kahama’s
motion for summary judgment. As an initial note, Kahama’s motion to strike Defendants’
affirmative defense is untimely and should be denied on the basis that it fails to comply with
Rule 12(f)’s twenty-one day requirement. Substantively, both motions must be denied
because neither the affirmative defense nor the response to the motion for summary judgment
assert “any redundant, immaterial, impertinent, or scandalous matter.” Defendants assert in
both documents that the pending foreclosure action in state court mandates this case be
stayed based upon an oral modification of the contract. That argument relates to the case,
does not confuse the issues, and presents no prejudice to Kahama. Accordingly, both
motions to strike are denied.
It is therefore ORDERED AND ADJUDGED that:
1.
Plaintiff’s Cross Motion to Strike Defendant’s Affirmative Defense (Dkt. 26)
is DENIED.
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2.
Plaintiff’s Motion for Summary Judgment Against the Defendants (Dkt. 38)
is GRANTED in part as to the issue of liability under the Note and Guaranties.
3.
Plaintiff’s Motion to Strike the Defendants’ Response and Affidavit as to
Plaintiff’s Motion for Summary Judgment (Dkt. 48) is DENIED.
4.
Plaintiff’s Motion for Leave to File Reply Brief (Dkt. 48) is DENIED as moot.
5.
Plaintiff’s Motion to Reopen Discovery (Dkt. 48) is GRANTED. Discovery
is limited to (1) the affirmative defense regarding the state court quiet title
action, Case No.: 2008-20156-CINS, and (2) the damages amount under the
Note and Guaranties. The new fact discovery deadline is June 24, 2013.
The dispositive motion deadline is July 15, 2013.
7.
The Pre-Trial Conference is re-scheduled for THURSDAY, August 8, 2013
at 10:00 A.M. This case is re-set for NON-JURY TRIAL during the
September 3, 2013 trial term.
DONE and ORDERED in Tampa, Florida on April 24, 2013.
Copies furnished to:
Counsel/Parties of Record
S:\Odd\2011\11-cv-2029.sjandstrike.frm
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