High 5 Sportswear, Inc. v. High 5 Gear, Inc.

Filing 41

ENTRY AND ORDER DENYING DEFENDANT/THIRD-PARTY PLAINTIFF H5G, LLC'S MOTION TO STRIKE THIRD-PARTY DEFENDANT, SELECTIVE INSURANCE COMPANY OF AMERICA'S AFFIRMATIVE DEFENSES 26 . Signed by Judge Thomas M. Rose on 8-3-2016. (de)

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT DAYTON
HIGH 5 SPORTSWEAR, INC.,
Plaintiff,
v.

:

Case No. 3:15-cv-00401

:

Judge Thomas M. Rose

:

HIGH 5 GEAR, INC.,
Defendant/Third-Party Plaintiff,

:
:
:

v.
SELECTIVE INSURANCE COMPANY OF
AMERICA,

:
:

Third-Party Defendant.
:
______________________________________________________________________________
ENTRY AND ORDER DENYING DEFENDANT/THIRD-PARTY PLAINTIFF
H5G, LLC’S MOTION TO STRIKE THIRD-PARTY DEFENDANT, SELECTIVE
INSURANCE COMPANY OF AMERICA’S AFFIRMATIVE DEFENSES (DOC. 26)
______________________________________________________________________________
Pending before the Court is the Motion to Strike Third-Party Defendant, Selective
Insurance Company of America’s Affirmative Defenses (“Motion to Strike”) (Doc. 26) filed by
Defendant/Third-Party Plaintiff H5G, LLC (“H5G”) (incorrectly sued as High 5 Gear, Inc.). The
Motion to Strike is fully briefed and ripe for review. For the reasons discussed below, the Court
DENIES the motion.1
I.

BACKGROUND
On November 6, 2015, Plaintiff High Five Sportswear, Inc. (“High Five”) filed the

instant lawsuit against H5G. (Doc. 1.) High Five alleges that H5G engaged in “trademark

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The Court acknowledges the valuable contribution and assistance of judicial extern Marcus Heath in drafting this
opinion.

infringement, deceptive trade practices, and unfair competition in connection with the designing,
manufacturing, marketing, selling and/or distributing of sportswear, sporting goods, and sports
equipment.” (Id. at 1.) On February 26, 2016, H5G filed an Amended Third-Party Complaint
against Selective Insurance Company of America (“Selective Insurance”) seeking declaratory
judgment of Selective Insurance’s duty to defend and indemnify H5G against High Five’s claims
and asserting claims for breach of contract and bad faith arising out of Selective Insurance’s
alleged failure to perform its obligations under its policy. (Doc. 19.) Selective Insurance
responded to the Third-Party Complaint with a combined Answer, Affirmative Defenses, and
Counterclaim. (Doc. 22).
On April 4, 2016, H5G filed the Motion to Strike, which is now before the Court, seeking
to strike eighteen of the twenty affirmative defenses asserted in Selective Insurance’s Answer to
H5G’s Amended Third-Party Complaint. (Doc. 26.) The eighteen affirmative defenses at issue
are as follows:
FIRST AFFIRMATIVE DEFENSE
The claims asserted in the First Amended Third-Party Complaint
are barred by the doctrines of estoppel, judicial estoppel, waiver
and unclean hands
SECOND AFFIRMATIVE DEFENSE
The claims asserted in the First Amended Third-Party Complaint
are barred by the applicable statute of limitations.
FOURTH AFFIRMATIVE DEFENSE
High 5 Gear’s claims are subject to the terms, provisions,
exclusions, conditions, limitations and definitions of the
Commercial Insurance Policy (Exhibit A hereto), which terms,
provisions, exclusions, limitations, conditions and definitions
speak for themselves and are incorporated herein by reference.
FIFTH AFFIRMATIVE DEFENSE
The claims asserted by High 5 Sportswear for trademark
infringement, false designations of origin and cybersquatting and
deceptive trade practices do not constitute “personal and

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advertising injury,” as defined under the Commercial Insurance
Policy issued by Selective.
SIXTH AFFIRMATIVE DEFENSE
Even if the claims asserted by High 5 Sportswear qualified as
“personal and advertising injury,” which is denied, the claims are
nevertheless excluded from coverage pursuant to the “Infringement
Of Copyright, Patent, Trademark Or Trade Secret” exclusion in the
Commercial Insurance Policy issued by Selective.
SEVENTH AFFIRMATIVE DEFENSE
The claims asserted by High 5 Sportswear for cybersquatting are
also excluded from coverage pursuant to the “Unauthorized Use Of
Another’s Name Or Product” exclusion in the Commercial
Insurance Policy issued by Selective.
EIGHT AFFIRMATIVE DEFENSE
To the extent that the Complaint filed by High 5 Sportswear
alleges that High 5 Gear knowingly and intentionally engaged in
trademark infringement and cybersquatting, coverage is excluded
pursuant to the “Knowing Violation Of Rights of Another”
exclusion in the Commercial Insurance Policy Issued by Selective.
NINTH AFFIRMATIVE DEFENSE
The claims asserted by High 5 Sportswear in the Complaint do not
allege damages resulting from High 5 Gear’s “advertisements,” as
that term is defined in the Commercial Insurance Policy issued by
Selective.
TENTH AFFIRMATIVE DEFENSE
To the extent that the claims asserted by High 5 Sportswear in the
Complaint qualify as “personal and advertising injury” under the
Commercial Insurance Policy, which is denied, the offenses took
place prior to the inception date of the Commercial Insurance
Policy, which precludes coverage for any such claims.
ELEVENTH AFFIRMATIVE DEFENSE
Selective did not breach any of the terms and conditions of the
Commercial Insurance Policy in disputing that it owes coverage to
High 5 Gear for the claims asserted by High 5 Sportswear.
TWELFTH AFFIRMATIVE DEFENSE
H[5]G LLC is not the named insured in the Commercial Insurance
Policy and thus is not entitled to coverage.

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THIRTEENTH AFFIRMATIVE DEFENSE
Selective did not breach the implied covenant of good faith and
fair dealing and did not engage in any bad faith conduct in
disputing that it owes coverage to High 5 Gear for the claims
asserted by High 5 Sportswear in the Complaint.
FOURTEENTH AFFIRMATIVE DEFENSE
While maintaining its position that its disclaimer of coverage to
High 5 Gear was proper and legally sustainable, Selective denies
that it committed bad faith as there was “reasonable justification”
for disputing coverage.
FIFTEENTH AFFIRMATIVE DEFENSE
The claims are barred by breach of contract.
SIXTEENTH AFFIRMATIVE DEFENSE
If Defendant/Third-Party Plaintiff suffered any damages, said
damages are the direct and proximate result of their own conduct.
SEVENTEENTH AFFIRMATIVE DEFENSE
Damages are capped per R.C. 2315.18 and R.C. 2315.21.
EIGHTEENTH AFFIRMATIVE DEFENSE
The third-party claims are barred by a failure to mitigate damages.
TWENTIETH AFFIRMATIVE DEFENSE
The First Amended Third-Party Complaint does not describe the
allegations and claims against Selective with sufficient
particularity so as to allow Selective to identify and assert all
potentially applicable defenses. Selective therefore reserves its
right to assert any and all applicable legal defenses and coverage
defenses based on the terms, conditions and exclusions set forth in
the Commercial Insurance Policy issued by Selective.
(Doc. 26 at 3-6, Doc. 22 at 8-11.)
H5G argues that these affirmative defenses should be stricken because Selective
Insurance fails to allege supporting facts sufficient to make them “plausible on their face.” (Doc.
26 at 3).

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II.

ANALYSIS
Under Fed. R. Civ. Proc. 12(f), the Court may strike “an insufficient defense or any

redundant, immaterial, impertinent, or scandalous matter.” The Sixth Circuit advises courts to
use its power to strike sparingly and “only when required for the purposes of justice” and “the
pleading to be stricken has no possible relation to the controversy.” Brown & Williamson
Tobacco Corp. v. United States, 201 F.2d 819, 822 (6th Cir. 1953); see also Morrow v. South,
540 F. Supp. 1104, 1111 (S.D. Ohio 1982) (“Motions under Rule 12(f) are not favored, and
should not be granted unless it is apparent that the matter has no possible relation to the
controversy.”).
H5G argues that Selective Insurance’s affirmative defenses are insufficient under
pleading standard articulated in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and
Ashcroft v. Iqbal, 556 U.S. 662 (2009). The Sixth Circuit has never held, however, that Iqbal
and Twombly apply to affirmative defenses. See Shreve v. Franklin County, Ohio, Nos. 2:10-cv644, et al., 2012 WL 1580936, at *1 (S.D. Ohio May 4, 2012). District courts in the Sixth
Circuit and judges in this District have reached different resolutions of the issue. At least three
judges have issued decisions finding that the Twombly-Iqbal pleading standard applies to
affirmative defenses. Edizer v. Muskingum Univ., No. 2:11-cv-799, 2012 WL 4499030, at *11
(S.D. Ohio Sept. 28, 2012) (Marbley, J.); Nixson v. Health Alliance, No. 1:10-cv-00338, 2010
WL 5230867, at *1-2 (S.D. Ohio Dec. 16, 2010) (Spiegel, J.); HCRI TRS Acquirer, LLC v. Iwer,
708 F. Supp.2d 687, 691 (N.D. Ohio 2010) (Zouhary, J.). Other judges, however, have declined
to apply the Twombly-Iqbal pleading standard to defenses. See Sprint Solutions, Inc. v. Shoukry,
No. 2:14-cv-00127, 2014 WL 5469877, at *2 (S.D. Ohio Oct. 28, 2014) (Sargus, J.); Joe Hand
Promotions, Inc. v. Havens, No. 2:13-cv-0093, 2013 WL 3876176, at *2 (S.D. Ohio Jul. 26,

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2013) (King, M.J.); Malibu Media, No. 13-11432, 2014 WL 2616902, at *2 (Drain, J.);
Sony/ATV Music Pub. LLC v. D.J. Miller Music Distributors, Inc., No. 3:09-cv-01098, 2011 WL
4729807, at *4 (M.D. Tenn. Oct. 7, 2011) (Nixon, J.); McLemore v. Regions Bank, No. 3:08-CV0021, 2010 WL 1010092, at *13 (M.D. Tenn. Mar. 18, 2010) (Cook, J.).
Iqbal and Twombly held that “a complaint must contain sufficient factual matter…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). The Supreme Court in Iqbal and Twombly articulated two primary purposes
behind a heightened plausibility pleading standard: (1) without factual allegations in the
complaint, the claimant cannot satisfy the requirement of providing “fair notice” of the nature of
the claim and the ground on which it rests, Twombly, 550 U.S. at 556, fn. 3; and (2) without
factual allegations, it is more likely that the plaintiff will waste defendant’s time and resources in
discovery pursuing groundless claims. Twombly, 550 U.S. at 557-58.
The Court declines to apply the Twombly/Iqbal standard to affirmative defenses. The
Court agrees with the District Judge in McLemore v. Regions Bank that:
. . . Twombly and Iqbal did not change the pleading standard for
affirmative defenses. On its face, Twombly applies only to
complaints and to Rule 8(a)(2), because the Court was interpreting
that subsection’s requirement of “’a short and plain statement of
the claim showing that the pleader is entitled to relief.’” Twombly,
550 U.S. at 555 (quoting Fed. R. Civ. P. 8(a)(2)). The opinion
does not mention affirmative defenses or any other subsection of
Rule 8. Iqbal also focused exclusively on the pleading burden that
applies to plaintiffs’ complaints. See 129 S. Ct. at 1949-54.
2010 WL 1010092, at *13. Instead, this Court, as did the McLemore court, will adhere to Sixth
Circuit precedent holding that “an affirmative defense may be pleaded in general terms and will
be held to be sufficient . . . as long as it gives plaintiff fair notice of the nature of the defense.”
Lawrence v. Chabot, 182 F.App’x 442, 456 (6th Cir. 2006) (quoting 5 Charles Alan Wright &

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Arthur R. Miller, Federal Practice and Procedure § 1274); see also Montgomery v. Wyeth, 580
F.3d 455, 467 (6th Cir. 2009).
Upon review, the Court finds that Selective Insurance’s challenged affirmative defenses
contain sufficient information to provide H5G fair notice of their nature and legal bases. See
Sony/ATV Music Pub. LLC v. D.J. Miller Music Distributors, Inc., No. 3:09-CV-01098, 2011
WL 4729807, at *5 (M.D. Tenn. Oct. 7, 2011). They do not contain detailed factual allegations,
but the Court has declined to apply the rigors of the Iqbal/Twombly pleading standard to them.
The fourth, fifth, sixth, seventh, eighth, ninth, tenth, and eleventh affirmative defenses, for
example, all concern Selective Insurance’s policy defenses. Although Selective Insurance does
not identify the facts that support these defenses, it has provided fair notice of the various
provisions of the policy and defined terms upon which it intends to base these defenses. The
Court deems Selective Insurance’s affirmative defenses adequate for pleading purposes. The
Motion to Strike is DENIED.
III.

CONCLUSION
Defendant/Third-Party Plaintiff H5G’s Motion to Strike (Doc. 26) is DENIED.
DONE and ORDERED in Dayton, Ohio, this Wednesday, August 3, 2016.
s/Thomas M. Rose
________________________________
THOMAS M. ROSE
UNITED STATES DISTRICT JUDGE

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