MSP Recovery, LLC v. Allstate Insurance Company
ORDER granting in part and denying in part 62 Motion to Strike. Signed by Magistrate Judge Edwin G. Torres on 8/17/2017. (abu)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 15-21532-CV-KING/TORRES
MSP RECOVERY, LLC,
ALLSTATE INSURANCE COMPANY,
ORDER ON PLAINTIFF’S MOTION TO STRIKE DEFENDANT’S
This matter is before the Court on a Motion to Strike Affirmative Defenses
filed by Plaintiff MSP RECOVERY, LLC (“Plaintiff”) on May 30, 2017. [D.E. 62].
Defendant ALLSTATE INSURANCE COMPANY (“Defendant” or “Allstate”) filed its
Response to the Motion on June 12, 2017 [D.E. 63], and the Reply followed on June
19. [D.E. 64]. 1 After a review of the Motion, Response, Reply, and the relevant
authorities, Plaintiff’s Motion is hereby GRANTED in part and DENIED in part.
FACTUAL BACKGROUND AND LEGAL STANDARD
This case involves a dispute between two insurers as to which is responsible
for payment of a patient’s medical bills. The incident giving rise to the claim occurred
on June 19, 2014, when a Medicare enrollee suffered injuries in a car accident. Florida
The Honorable Judge James Lawrence King referred the matter to the
undersigned on June 23, 2017. [D.E. 65].
Healthcare Plus (“FHCP”) paid medical expenses associated with the enrollee’s
injuries in the amount of $1,284.10. At the time the incident took place, Defendant
allegedly provided “no-fault” vehicular insurance coverage to the enrollee, and
Plaintiff asserts it should be reimbursed for the expenses paid as a result of several
assignments of FHCP’s rights. [D.E. 30, ¶ 25-26]. In this Motion, Plaintiff moves to
strike certain defenses raised by Defendant in its Answer to the Second Amended
Complaint. [D.E. 62].
Rule 12(f) permits a court to strike an insufficient defense. See FED. R. CIV. P.
12(f). Striking an affirmative defense is a drastic remedy that is disfavored and
should only be granted if it is clear that the defense must fail. Electronic Comm. Tech.,
LLC v. Clever Athletics Co., LLC, 221 F. Supp. 3d 1366, 1367 (S.D. Fla. 2016) (citing
Augustus v. Bd. of Pub. Instruction of Escambia County, 306 F.2d 862, 868 (5th Cir.
1962)). Furthermore, “both because striking a portion of a pleading is a drastic
remedy and because it often is sought by the movant simply as a dilatory or harassing
tactic…motions under Rule 12(f) are viewed with disfavor and infrequently granted.”
5C Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and
Procedure: Civil § 1380 (3d ed. 2008). “[I]t must be shown that the allegations being
challenged are so unrelated to plaintiff’s claims as to be unworthy of any
consideration as a defense and that their presence in the pleading throughout the
proceeding will be prejudicial to the moving party.” Id.
Affirmative defenses are subject to the same pleading scrutiny imposed by Rule
8’s plausibility standard. See Bell At. Corp. v. Twombly, 550 U.S. 544, 555-56 (2009);
Ashcroft v. Iqbal, 556 U.S. 662 (2009); see also Losada v. Norwegian (Bahamas) Ltd.,
296 F.R.D. 688, 691 (S.D. Fla. 2013) (“After reviewing the case law on the issue and
the purpose of an affirmative defense, this Court finds that affirmative defenses
should be subject to the same general pleading standards of complaints.”). Rule
8(a)(2) requires “a short and plain statement of the claim showing that the pleader is
entitled to relief,” which should be sufficient to give the opposing party fair notice of
the claim and its grounds. See Twombly, 550 U.S. at 555-56. The pleading must
articulate enough facts to raise a plausible right to relief on the assumption that all
of the non-conclusory, factual allegations in the complaint are true. Id. at 555.
Formulaic recitations filled with labels and conclusions without factual allegations
are insufficient. Id.
We now turn to each affirmative defense Plaintiff challenges in its Motion.
Defendant’s First Affirmative Defense
Allstate’s first affirmative defense states that Plaintiff must have a valid
assignment from FHCP in order to recover damages and that absent such an
assignment, “Plaintiff lacks standing to sue.” Although this affirmative defense fails
to raise facts that would suffice under Rule 8’s pleading standards, we are hesitant
to strike it because it raises a question as to whether this Court maintains subject
matter over the dispute. A court maintains broad discretion when determining
whether to strike defenses under Rule 12(f), and it may decline to do so when there
is a substantial or disputed question of law. See Wausau Bus. Ins. Co. v. Horizon
Admin. Servs., LLC, 803 F. Supp. 2d 209, 213 (E.D.N.Y. 2011) (“To strike an
affirmative defense as insufficient…the court must first find that there are no
substantial questions of law or fact that might allow the defense to succeed[.]”).
Because striking an affirmative defense is generally disfavored, and in light of the
broad discretion we have in determining whether striking a portion of the pleading is
justified, Plaintiff’s Motion as to Defendant’s first affirmative defense is DENIED.
Defendant should be allowed to plead the issue for the record.
Defendant’s Third Affirmative Defense
The third affirmative defense states that Plaintiff’s claims are barred “to the
extent it failed to comply with § 627.736(10), Fla. Stat., which requires as a condition
precedent to filing any action for personal injury protection benefits written notice of
intent to initiate litigation.” Rule 9 of the Federal Rules of Civil Procedure require
that “when denying that a condition precedent has occurred or been performed, a
party must do so with particularity.” FED. R. CIV. P. 9(c). The affirmative defense
contains factual assertions that Plaintiff’s pre-suit correspondence (1) failed to attach
any assignment of benefits and (2) failed to provide “itemization of the charges,
treatment, service or accommodation and the type of benefit claimed to be due.” This
comports with Rule 12’s pleading requirements, Twombly, 550 U.S. at 555, and
Plaintiff’s request as to the third affirmative defense is therefore DENIED. Cf.
Falzarano v. Retail Brand Alliance, Inc., 2008 WL 899257, *2 (S.D. Fla. Mar. 31,
2008) (striking affirmative defense based on failure to comply with pre-suit
requirements due to conclusory nature and because answering party failed to include
facts that indicated whether such failure actually took place).
Defendant’s Fourth Affirmative Defense
Plaintiff’s Motion is GRANTED as to Allstate’s fourth affirmative defense.
Defendant contends that “[s]ome or all of Plaintiff’s claims may be barred based on
its failure to mitigate damages…to the extent Plaintiff (or FHCP) automatically paid
bills regardless [of] whether a primary payer existed.” [D.E. 60, p. 9]. Defendant
proceeds to discuss a complaint in a similar lawsuit filed by Plaintiff’s counsel and
how that pleading impacts the allegations contained in Plaintiff’s Second Amended
Complaint in this case. Id. Defendant, however, fails to support its assertions with
any facts that indicate that Plaintiff did, indeed, fail to mitigate damages and offers
nothing beyond conclusory statements that this may have occurred. Such assertions,
without more, do not satisfy the requirements of Rule 9 and Rule 12, and the defense
should therefore be stricken.
Defendant’s Fifth Affirmative Defense
With regard to the fifth affirmative defense, Defendant once again fails to
plead with particularity how, exactly, Plaintiff failed to “fulfill its obligations to
coordinate benefits.” [D.E. 60, p. 9]. Instead, Allstate relies on the conclusory
statement that Plaintiff’s claim may be barred as a result of its failure to perform a
condition precedent, but does not put forward any facts as to whether this actually
occurred. As such, the affirmative defense should be struck.
Defendant’s Sixth Affirmative Defense
The sixth affirmative defense states that Plaintiff cannot recover attorney’s
fees in connection with its claim. As opposed to a true affirmative defense, the sixth
affirmative defense constitutes a denial and shall be treated as such. See Tsarvis v.
Pfizer, Inc., 310 F.R.D. 678, 682 (S.D. Fla. 2015) (“When a defendant mislabels a
specific denial as a defense, the proper remedy is to treat the claim as a denial, not to
strike it.”). Because the proper remedy is to construe this defense as a denial,
Defendant’s request to strike them is hereby DENIED. See id.
Defendant’s Seventh Affirmative Defense
We will, however, strike Defendant’s seventh affirmative defense, which
contends that “[s]ome or all of Plaintiff’s claims may be barred by the doctrine of
estoppel.” [D.E. 60, p. 9]. Defendant then proceeds to discuss a “complaint in a similar
lawsuit [filed] by Plaintiff’s counsel” that discusses contractual provisions between
FHCP and other medical providers indication that “FHCP paid bills automatically
regardless [of] whether a primary payer existed, and did not coordinate benefits with
primary payers.” Id., p. 8-10. Defendant, however, does not support its contention
with facts that would indicate this same course of events occurred in connection with
this lawsuit. As such, the request to strike the affirmative defense is GRANTED.
Defendant’s Eighth Affirmative Defense
For the same reasons discussed in striking Defendant’s seventh affirmative
defense, the request to strike the eighth affirmative defense is also GRANTED.
Defendant contends that Plaintiff’s claims may be barred by waiver; it does nothing
to support this contention with facts or particular circumstances that would support
a finding of waiver here. Therefore, it is stricken.
Defendant’s Twelfth Affirmative Defense
Plaintiff’s request to strike the twelfth affirmative defense is DENIED.
Defendant has supported its affirmative defense with sufficient facts to support its
assertion that Plaintiff’s claims would be barred because it paid the full amount of
benefits available under the driver’s personal injury protection policy. An affirmative
defense is generally a defense that, if established, requires judgment for the
defendant even if the plaintiff can prove his case by a preponderance of the evidence.
Wright v. Southland Corp., 187 F.3d 1287 (11th Cir. 1999). Because Defendant
provides enough factual support to demonstrate that it would be entitled to such a
judgment if the assertions made in this particular affirmative defense are true, we
find that it would be improper to strike it.
Defendant’s Ninth, Thirteenth and Fourteenth Affirmative
Plaintiff’s Motion is GRANTED as to Defendant’s ninth, thirteenth and
fifteenth affirmative defenses. These affirmative defenses state that Plaintiff’s claim
may be barred on the basis that it failed to meet the requirements set forth by certain
“Medicare laws,” and that any recovery made by Plaintiff may be subject to a set-off.
Again, as repeated many times in this Order, Defendant provides nothing beyond
conclusory assertions in support of these affirmative defenses that merely raises the
possibility that each defense might attach to the factual allegations contained in
Plaintiff’s operative pleading. We cannot sustain the use of such factually-bare
assertions, and these affirmative defenses are therefore stricken.
Defendant’s Fifteenth Affirmative Defense
The fifteenth affirmative defense states that “[Defendant] reserves the right to
add and assert additional defenses.” [D.E. 60, p. 11]. This is essentially a “reservation
of rights clause,” which numerous courts in this district have found to be
impermissible because it is not a true affirmative defense and fails to meet the
pleading standard under Rule 8(a). FED. R. CIV. P. 8(a); see, e.g., Commodore Plaza
Condo. Ass'n, Inc. v. QBE Ins. Corp., 2012 WL 12870289, at *1 (S.D. Fla. Oct. 5, 2012)
(striking an affirmative defense “[b]ecause a reservation of rights is not a valid
defense and [Defendant’s] . . . affirmative defense does not meet the pleading
standards of Federal Rule of Civil Procedure 8(a) and Twombly[.]”); Gonzalez v.
Spears Holdings, Inc., 2009 WL 2391233, at *4 (S.D. Fla. July 31, 2009) (“This
reservation of rights clause does not constitute an affirmative defense because it does
not respond to the initial complaint or raise facts which negate Plaintiff's claims.”)
(citations omitted); Jones v. Carmanah Techs. Corp., 2014 WL 12461353, at *3 (S.D.
Fla. Jan. 5, 2014) (striking a reservation of rights clause because it neither responded
towards the initial complaint nor raised facts which negated the plaintiff’s claims).
In keeping with the other courts in this district, we find that Defendant’s fifteenth
affirmative defense is merely a reservation of rights that does not meet the pleading
standards set forth in Twombly. Therefore, the affirmative defense is hereby stricken.
For the foregoing reasons, it is hereby ORDERED AND ADJUDGED that
Plaintiff’s Motion to Strike Affirmative Defenses [D.E. 62] is GRANTED in part and
DENIED in part. Plaintiff’s Motion is DENIED as to Defendant’s first, third, sixth
and twelfth affirmative defenses. Plaintiff’s Motion is GRANTED as to Defendant’s
fourth, fifth, seventh, eighth, ninth, thirteenth, fourteenth and fifteenth affirmative
defenses. Those defense are hereby stricken, with leave to amend. If Defendant seeks
to cure the deficiencies outlined herein, an amended answer with the requisite factual
particularity shall be filed within ten (10) days from the date of this Order.
DONE AND ORDERED in Chambers at Miami, Florida, this 17th day of
/s/ Edwin G. Torres
EDWIN G. TORRES
United States Magistrate Judge
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