Federal Deposit Insurance Corporation v. Jones et al

Filing 47

ORDER that 30 Motion for More Definite Statement is DENIED. Signed by Magistrate Judge George Foley, Jr on 7/26/13. (Copies have been distributed pursuant to the NEF - MMM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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FEDERAL DEPOSIT INSURANCE
CORPORATION AS RECEIVER FOR
SECURITY SAVINGS BANK,

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Plaintiff,
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vs.
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KELLY JONES, STEPHEN DERVENIS, and
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THOMAS PROCOPIO,
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Defendants. )
__________________________________________)

Case No. 2:13-cv-00168-GMN-GWF
ORDER
Motion for a More Definite Statement
Pursuant to FRCP 12(e), or in the
Alternative, Motion to Strike Under
FRCP 12(f) (#30)

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This matter comes before the Court on Defendants Kelly Jones, Stephen Dervenis, and

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Thomas Procopio’s (“Defendants”) Motion for a More Definite Statement (#30), filed on May 31,

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2013. Plaintiff Federal Deposit Insurance Corporation (“Plaintiff”) filed its Response (#39) on

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June 27, 2013. Defendants filed their Reply (#46) on July 12, 2013.

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BACKGROUND

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On January 31, 2013, Plaintiff filed a Complaint (#1) against Defendants, alleging breach of

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fiduciary duties and gross negligence. In the Complaint, Plaintiff alleges that Defendants are liable

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for Security Savings Bank’s losses for six separate loans made during 2005 and 2006, because they

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failed to comply with “prudent, safe and sound lending practices.” See, e.g., Complaint, Doc. #1 at

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¶ 10. Defendants now seek a more definite statement pursuant to FRCP 12(e) relating to (1) those

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portions of the Complaint that allege violation of “prudent, safe and sound lending practices,” and

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(2) which specific loan policies apply to the loans at issue. In the alternative, Defendants request

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that references to “prudent, safe and sound lending practices” be stricken from the Complaint.

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DISCUSSION
I.

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Motion for More Definite Statement Pursuant to FRCP 12(e)
Rule 8 requires a complaint to contain “a short and plain statement of the claim showing

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that the pleader is entitled to relief.” FRCP 8(a)(2); see also Resolution Trust Corp. v. Dean, 854

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F. Supp. 626, 648 (D. Ariz. 1994). If the pleading is vague or ambiguous, the opposing party may

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move for a more definite statement before filing a responsive pleading. FRCP 12(e); see also

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Resolution Trust Corp., 854 F. Supp. at 648-49. Rule 12(e) motions are disfavored because

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“pleadings in the federal courts are only required to fairly notify the opposing party of the nature of

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the claim.” Id. at 649 (internal quotation marks omitted). Rule 12(e)’s purpose is “to strike at

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unintelligibility, rather than want of detail.” Woods v. Reno Commodities, Inc., 600 F. Supp. 574,

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580 (D. Nev. 1984). Rule 12(e) motions should not be granted to obtain “evidentiary detail that

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may be the subject of discovery.” Id. “If the moving party could obtain the missing detail through

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discovery, the motion should be denied.” Castillo v. Norton, 219 F.R.D. 155, 163 (D. Ariz. 2003)

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(internal quotation marks omitted).
In FDIC v. Wise, the court denied a motion for more definite statement where the FDIC

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alleged the defendants violated “prudent lending practices” because it found that “the complaint

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adequately inform[ed] the parties as to plaintiff’s claims.” 758 F. Supp 1414, 1418 (D. Colo.

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1991). The same relief regarding substantively the same language is being sought here. Plaintiff’s

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Complaint contains 122 paragraphs of allegations and identifies the causes of action. Considering

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that the facts supporting Plaintiff’s claim need not be set forth in detail, the Court finds Plaintiff’s

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Complaint offers Defendants more than adequate notice of what is being alleged.

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II.

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Motion to Strike Pursuant to FRCP 12(f)
Defendants seek alternatively to strike the “prudent, safe and sound” language from the

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Complaint. Rule 12(f) provides that the Court may strike from a pleading any redundant,

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immaterial, impertinent, or scandalous matter. Courts generally disfavor motions to strike as a

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severe form of relief. See, e.g., Germaine Music v. Universal Songs of Polygram, 275 F. Supp. 2d

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1288, 1300 (D. Nev. 2003) aff’d in part, 130 F. App’x 153 (9th Cir. 2005). “‘[M]otions to strike

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should not be granted unless it is clear that the matter to be stricken could have no possible bearing
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on the subject matter of the litigation.’” Id. (quoting Colaprico v. Sun Microsystems, Inc., 758 F.

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Supp. 1335, 1339 (N.D. Cal. 1991)).

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As Plaintiff notes in its Opposition, the language at issue is common in federal banking

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statutes and regulations. For example, the Federal Deposit Insurance Act requires depository

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institutions to prepare a report with a statement of the management’s responsibilities for

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“complying with the laws and regulations relating to safety and soundness.” See 12 U.S.C. §

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1831m(b)(2)(A). See also 12 C.F.R. § 337.11 (“an insured State nonmember bank [...] has a duty

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to conduct its operations in a safe and sound manner.”); 12 C.F.R. § 365.2(b)(2)(ii) (“A bank’s

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lending policies must also establish “prudent underwriting standards.”). The Court finds the

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subject language is neither redundant nor immaterial. Similarly, the Court declines to conclude that

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the language could have “no possible bearing” on this litigation. Accordingly,

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IT IS HEREBY ORDERED that Defendants’ Motion for a More Definite Statement (#30)
is denied.
DATED this 26th day of July, 2013.
___________________________________
GEORGE FOLEY, JR.
United States Magistrate Judge

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