Taylor v. J P Morgan Chase, Cahse Home Finance

Filing 22

OPINION AND ORDER: Court DENIES 13 Motion for Leave to File First Amended Answer and Affirmative Defenses, WITH LEAVE TO RE-FILE a renewed motion by 11/21/2016. Signed by Magistrate Judge John E Martin on 11/7/2016. cc: Taylor (tc)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION AT LAFAYETTE
ANTHONY G. TAYLOR,
Plaintiff,
v.
J P MORGAN CHASE, CHASE HOME
FINANCE,
Defendant.

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CAUSE NO.: 4:16-CV-52-PPS-JEM

OPINION AND ORDER
This matter is before the Court on Defendant’s Motion for Leave to File First Amended
Answer and Affirmative Defenses [DE 13], filed by Defendant on September 21, 2016. Plaintiff has
responded by filing a Motion to Strike [DE 18], which the Court has construed as a Response to
Defendant’s Motion. See DE 19. Defendants have replied [DE 20].
I.

Background
Plaintiff sued Defendant in state court, alleging breach of contract and breach of the duty of

good faith and fair dealing. Plaintiff says that, after Defendant offered him a trial modification to
his mortgage payment plan under the federal Home Affordable Modification Program (HAMP),
Defendant breached its agreement to convert the trial modification into a permanent modification.
Defendant removed the case to federal court and filed an answer to the complaint. Defendant
now asks for leave to file an amended answer that contains affirmative defenses not contained in
Defendant’s initial answer. Plaintiff objects on the ground that the proposed affirmative defenses
do not comply with the Federal Rules of Civil Procedure.
II.

Analysis
A party may amend a pleading with the Court’s leave, and the Court “should freely give

leave when justice so requires.” Fed. R. Civ. P. 15(a)(2). The decision to grant or deny a motion to

amend lies within the Court’s sound discretion, but leave to amend is “inappropriate where there is
undue delay, bad faith, dilatory motive on the part of the movant, repeated failure to cure
deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of
allowance of the amendment, or futility of the amendment.” Villa v. City of Chicago, 924 F.2d 629,
632 (7th Cir. 1991); Campbell v. Ingersoll Milling Mach. Co., 893 F.2d 925, 927 (7th Cir. 1990).
Here, Plaintiff does not argue that he will suffer prejudice if Defendant is allowed to amend
its affirmative defenses. Nor does Plaintiff allege any undue delay, bad faith, or dilatory motive by
Defendant, and Defendant has not repeatedly failed to cure deficiencies in its affirmative defenses.
The only question, then, is whether the proposed affirmative defenses are futile. Plaintiff says the
proposed affirmative defenses are futile, because they do not meet the Federal Rules of Civil
Procedure’s pleading requirements. See Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286,
1294 (7th Cir. 1989) (affirmative defenses are pleadings and are therefore subject to the Federal
Rules of Civil Procedure’s pleading requirements).
The familiar pleading requirements for a complaint come from Bell Atl. Corp. v. Twombly,
550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009). To satisfy Twombly and Iqbal and
survive a Rule 12(b)(6) motion to dismiss, a complaint must provide “a short and plain statement
of the claim showing that the pleader is entitled to relief,” see Fed. R. Civ. P. 8(a)(2), and “must
contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570).
But district courts are divided on the question of whether an affirmative defense must comply
with Twombly and Iqbal’s heightened pleading standard. See Cottle v. Falcon Holdings Mgmt., LLC,
No. 11-95, 2012 U.S. Dist. LEXIS 10478, *3-4 (N.D. Ind. Jan. 30, 2012) (collecting cases on both

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sides); Husainy v. Allied Collection Serv., Inc., No. 15-95, 2016 U.S. Dist. LEXIS 54073, *2 (N.D.
Ind. Apr. 22, 2016) (“The Seventh Circuit Court of Appeals has not yet decided whether the
pleading standard for a complaint set forth in [Twombly and Iqbal] applies to . . . affirmative
defenses.”).
Some courts have held that Twombly and Iqbal do apply to affirmative defenses. See, e.g.,
HCRI TRS Aquirer, LLC v. Iwer, 708 F. Supp. 2d 687, 691 (N.D. Ohio 2010) (“the pleading
requirements for affirmative defenses are the same as for claims of relief”); Barnes v. AT&T Pension
Benefit Plan, 718 F. Supp. 2d 1167, 1171 (N.D. Cal. 2010) (“the vast majority of courts . . . have
extended Twombly’s heightened pleading standard to affirmative defenses”) (collecting cases).
But courts in the Northern District of Indiana have generally held that an affirmative defense
need not satisfy Twombly and Iqbal. See Cottle, 2012 U.S. Dist. LEXIS 10478 at *5 (“This Court
agrees with those cases declining to apply the ‘plausibility’ standard of Iqbal and Twombly to
affirmative defenses.”); Fletcher v. Hoeppner Wagner & Evans, LLP, No. 14-231, 2015 U.S. Dist.
LEXIS 153057, *19 (N.D. Ind. Nov. 12, 2015) (“the Court declines to apply to affirmative defenses
the plausibility standard applied in Iqbal and Twombly”); Husainy, 2016 U.S. Dist. LEXIS 54073
at *2 (“This Court continues to agree with those cases declining to apply . . . Iqbal and Twombly to
affirmative defenses.”).
Under this view, an affirmative defense need not satisfy Twombly and Iqbal’s plausibility
standard, but the affirmative defense must still contain a “short and plain statement” of the defense
itself. Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1294 (7th Cir. 1989). Affirmative
defenses must be stricken if they contain “nothing but bare bones conclusory allegations” without
“any short and plain statement of facts.” Id. at 1295 (emphasis added). In essence, an affirmative

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defense must “be adequately pled to put a plaintiff on notice of the defense.” Cottle, 2012 U.S. Dist.
LEXIS 10478 at *12; Design Basics, LLC v. Windsor Homes, Inc., No. 16-51, 2016 U.S. Dist.
LEXIS 91910, *8 (N.D. Ind. July 14, 2016) (denying motion to strike affirmative defenses because
the affirmative defenses were stated “in short and plain terms” and “sufficiently put [the plaintiff]
on notice of the affirmative defenses”); accord Bielfeldt v. Bourazak, No. 15-1419, 2016 U.S. Dist.
LEXIS 46986, *6 (C.D. Ill. Apr. 7, 2016) (“Federal Rule of Civil Procedure 8 requires for
affirmative defenses, at a minimum, fair notice of a party’s defense.”).
Here, Plaintiff argues that proposed affirmative defenses B, G, H, M, N, and O use the word
“may” and are consequently not “affirmative” but are rather “a laundry list of maybes.” For
example, proposed affirmative defense B asserts that Plaintiff’s claims “may be barred by his failure
to mitigate damages.” The Court agrees. Affirmative defenses must be stricken if they present
merely “bare bones” or “conclusory” allegations, and the proposed affirmative defenses at issue are
not even conclusory, as Defendant proposes to plead that Plaintiff’s claims “may” be barred for
various reasons—not that the claims are barred. So the Court finds that allowing Defendant to plead
these affirmative defenses would be futile.
Plaintiff further argues that all of Defendant’s proposed affirmative defenses are improper
because they are preceded by the statement that Defendant “may” rely upon some or all of the listed
affirmative defenses. But the Court sees no problem with this sentence. Though the introductory
sentence uses the word “may,” the significance of the word is merely that Defendant may or may
not actually seek to use every one of the listed affirmative defenses after discovery or at trial. The
purpose of requiring parties to plead their affirmative defenses is to put the opposing party on notice,
and the introductory sentence adequately serves that purpose.

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Plaintiff also argues that proposed affirmative defenses A, D, E, K, and L are not actually
affirmative defenses. The Court agrees, for the reasons below.
Defendant’s proposed affirmative defense A asserts that “Plaintiff’s Complaint in whole or
in part fails to state a claim against [Defendant] upon which relief can be granted.” But this is not
a proper affirmative defense; it is a “recitation of the standard for a motion to dismiss.” Tome
Engenharia E Transportes v. Malki, No. 94-7427, 1996 U.S. Dist. LEXIS 4585, *29 (N.D. Ill. Apr.
9, 1996); Joe Hand Promotions, Inc. v. Kurti, No. 14-1277, 2015 U.S. Dist. LEXIS 120170, *2
(C.D. Cal. Sept. 8, 2015) (“[F]ailure to state a claim[] is not an affirmative defense. . . . [It] is more
properly brought as part of a Rule 12(b)(6) motion.”).
Defendant’s proposed affirmative defenses D and E assert that Plaintiff’s damages are
speculative, uncertain, impossible to ascertain, unrecoverable, or not cognizable. But asserting that
a plaintiff’s claimed damages are speculative, vague, or even non-existent does not constitute an
affirmative defense. Manley v. Boat/U.S. Inc., No. 13-5551, 2016 U.S. Dist. LEXIS 41036, *14
(N.D. Ill. Mar. 29, 2016) (“simply accusing [a plaintiff] of pleading vague and speculative damages
does not state an affirmative defense”); Varrasso v. Barksdale, No. 13-1982, 2016 U.S. Dist. LEXIS
46686, *7-8 (S.D. Cal. Apr. 5, 2016) (affirmative defense that plaintiffs’ damages are “speculative
or nonexistent . . . are simply allegations that Plaintiffs did not meet their burden of proof . . . [so]
they are not affirmative defenses”); Joe Hand Promotions, Inc. v. Kurti, No. 14-1277, 2015 U.S.
Dist. LEXIS 120170, *2 (C.D. Cal. Sept. 8, 2015) (“speculative damages[] is a defense to damages,
not an affirmative defense”) As for the contention that Plaintiff’s damages are unrecoverable,
Defendant must state in plain terms the reason why it believes the damages are unrecoverable, in
order to put Plaintiff on notice. See IPSCO Tubulars, Inc. v. Ajax TOCCO Magnethermic Corp., No.

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10-21, 2015 U.S. Dist. LEXIS 158756, *5 (E.D. Ark. Nov. 24, 2015) (defendant had burden of
proving its affirmative defense that plaintiff’s damages were unrecoverable under Section 12.1 of
the parties’ contract).
Defendant’s proposed affirmative defense K asserts that there is “no private cause of action
under HAMP.” But Plaintiff has not pleaded a “private cause of action under HAMP.” Rather,
Plaintiff has sued Defendant for breach of contract and breach of the duty of good faith and fair
dealing.
Finally, Defendant’s proposed affirmative defense L asserts that the trial modification plan
did not constitute an enforceable contract or agreement. But this is a matter that Plaintiff himself
must prove, not an affirmative defense upon which Defendant has the burden of proof. See, e.g.,
Dynasty Apparel Indus. v. Rentz, 206 F.R.D. 603, 606 (S.D. Ohio 2002) (in breach of contract case,
“there [wa]s no contract between the parties” does not constitute an affirmative defense).
Because Defendant’s proposed affirmative defenses A, D, E, K, and L are not proper
affirmative defenses, it would be futile to let Defendant plead them.
III.

Conclusion
For the reasons above, the Court DENIES Defendant’s Motion for Leave to File First

Amended Answer and Affirmative Defenses [DE 13], with leave to re-file a renewed motion on or
before November 21, 2016.
SO ORDERED this 7th day of November, 2016.
s/ John E. Martin
MAGISTRATE JUDGE JOHN E. MARTIN
UNITED STATES DISTRICT COURT
cc:

All counsel of record
Plaintiff, pro se

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