Smith et al v. Brown et al

Filing 75

ORDER ON DEFENDANTS' MOTION TO AMEND re: 67 71 Motion to Amend. Defendants are ordered to file their amended answer within 5 days of this order by Judge Marsha J. Pechman.(MD)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 and 17 18 19 20 21 This matter comes before the Court on Defendants' motion to amend their Answer and JEROME FRIGILLANA and THERESA FRIGILLANA, et al., Second-Party Defendants. v. GARY BROWN and RENE BROWN, et al., Defendants, UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE RUTH SMITH; HERBERT AULT; LOUISE AULT; and KATHRYN RICHARDSON, Plaintiffs, CASE NO. C10-1021 MJP ORDER ON DEFENDANTS' MOTION TO AMEND

22 Affirmative Defenses. (Dkt. No. 67.) Having reviewed the motion, the responses (Dkt. No. 70, 23 24
ORDER ON DEFENDANTS' MOTION TO AMEND- 1

1 71), the reply (Dkt. No. 72), and all supporting papers, the Court GRANTS in part and DENIES 2 in part the motion. 3 4 Background Plaintiffs are a group of disabled, elderly adults living an adult family home run by

5 Second-Party Defendants, Jerome and Theresa Frigillana (the "Frigillanas"). Plaintiffs moved 6 for and obtained a preliminary injunction against Defendants, who sought to enforce a settlement 7 agreement that required the Frigillanas to sell their house and close down the adult family home. 8 (Dkt. No. 60.) Plaintiffs pursue claims under the Fair Housing Act ("FHAA"), 42 U.S.C. § 3601 9 and the Washington Law Against Discrimination ("WLAD"). (Dkt. No. 27.) 10 Defendants assert four new affirmative defenses, one of which fields no objection from

11 Plaintiffs and Second-Party Defendants. (Dkt. Nos. 67, 70, 71.) The newly added affirmative 12 defenses are: 13 14 15 16 17 18 19 20 7.13. 21 (Dkt. No. 67 at 14.) 22 23 24
ORDER ON DEFENDANTS' MOTION TO AMEND- 2

7.10. The Plaintiffs' own conduct, or by the conduct of its agents, representatives, and consultants, which may include the Second-Party Defendants. [sic] 7.11. All of the consequences of which the Plaintiffs now complain were proximately and solely caused by the acts or omissions of the Second-Party Defendants. 7.12 To the extent that any damages, fees or costs are awarded to Plaintiffs against Defendants Brown, then (and without waiving Defendants Brown's right to resolve all issues and disputes with Second-Party Defendants exclusively before Judicial Dispute Resolution of Seattle), Defendants Brown are entitled to full and complete indemnity (inclusive of Defendants Brown's fees and costs) from Second-Party Defendants. Hindrance of contract.

1 2 A. 3 Standard

Analysis

Under Rule 15(a), leave to amend should be given freely when justice so requires.

4 Amendment should be granted absent evidence of bad faith, undue delay or prejudice to the 5 opposing party. Bowles v. Reade, 198 F.3d 752, 757 (9th Cir. 1999). However, if a proposed 6 amendment is futile or legally insufficient, the Court should not grant leave. Gordon v. City of 7 Oakland, --- F.3d ---, 2010 WL 4673695, at *2 (9th Cir. Nov. 19, 2010). A proposed amendment 8 is futile "if no set of facts can be provided under the amendment to the pleading that would 9 constitute a valid and sufficient claim or defense." Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 10 214 (9th Cir. 1988). 11 B. 12 Affirmative Defense 7.12 Plaintiffs and Second-Party Defendants have not challenged Affirmative Defense 7.12.

13 The Court GRANTS leave to add this defense. Nothing in Defendants' motion shows evidence 14 of undue delay, bad faith, or prejudice to the opposing party. This fact is true as to all of the 15 asserted affirmative defenses. 16 C. 17 Affirmative Defense 7.10 As an initial matter, the parties agree that this affirmative defense lacks a verb as it is

18 drafted. In their reply, Defendants amended the asserted pleading, stating it should read: "[t]he 19 Plaintiffs are bound by their own conduct or by the conduct of its [sic] agents, representatives, 20 and consultants which may include the Second-Party Defendants." (Dkt. No. 72 at 2.) Because 21 Plaintiffs adequately intuited and argued against this proposed affirmative defense the Court 22 considers it. (Dkt. No. 70 at 3.) 23 24
ORDER ON DEFENDANTS' MOTION TO AMEND- 3

1

The Court finds sufficient allegations in the pleadings to support a defense that Plaintiffs

2 have an agency relationship with the Second-Party Defendants that may bind them to the 3 underlying settlement agreement. Defendants point to a letter drafted by the Frigillanas' attorney 4 in the underlying litigation in which the Frigillanas invoked Plaintiffs' rights under the Fair 5 Housing Act and asked for an accommodation for both Plaintiffs and the Frigillanas. (Dkt. No. 6 72 at 2-3.) This letter is expressly referenced in the amended complaint and is properly 7 considered as part of the pleadings. (Dkt. No. 27 at 5); see United States v. Ritchie, 342 F.3d 8 903, 908 (9th Cir. 2003) (stating that the Court may consider documents incorporated by 9 reference in a complaint). This letter provides a plausible basis on which Defendants may argue 10 that an agency relationship exists and that Plaintiffs may be bound by the settlement agreement 11 entered into between Defendants and the Second-Party Defendants. The Court GRANTS leave 12 to add this affirmative defense as it is set out in the reply brief (with corrections to the 13 grammatical errors noted above). 14 D. 15 Affirmative Defense 7.11 Plaintiffs correctly argue that Affirmative Defense 7.11 is not a proper affirmative

16 defense. 17 Affirmative Defense 7.11 states that "[a]ll of the consequences of which the Plaintiffs

18 now complain were proximately and solely caused by the acts and omissions of the Second-Party 19 Defendants." (Dkt. No. 67 at 14.) 20 An affirmative defense is proper if it precludes liability, even if Plaintiffs can otherwise

21 satisfy all the elements of their claim or claims. Barnes v. AT&T Pension Ben. Plan, 718 F. 22 Supp. 2d 1167, 1173-74 (N.D Cal. 2010). However, "[a] defense which demonstrates that 23 plaintiff has not met its burden of proof as to an element plaintiff is required to prove is not an 24
ORDER ON DEFENDANTS' MOTION TO AMEND- 4

1 affirmative defense." Zivkovic v. S. California Edison Co., 302 F.3d 1080, 1088 (9th Cir. 2002). 2 Here, Defendants' proposed defense appears to be an attack to causation only, which is an 3 element of Plaintiffs' claims. This is not an affirmative defense. Id. To the extent that 4 Defendants seek to estop Plaintiffs claim on the theory they are bound by the settlement between 5 the Frigillanas and Defendants, the defense is better addressed under estoppel and waiver 6 (Affirmative Defense 7.2) or agency (Affirmative Defense 7.10). The Court DENIES leave to 7 add this defective defense. 8 E. 9 Affirmative Defense 7.13 Plaintiffs argue that Affirmative Defense 7.13, "hindrance of contract," is not an

10 affirmative defense. In response, Defendants only argue that there is a cause of action against 11 one who hinders or delays the performance of a contract. (Dkt. No. 72 at 5.) The parties do not 12 dispute that there can be a cause of action for breach of the duty not to hinder performance on a 13 contract. (Compare Dkt. No. 70 at 5 with Dkt. No. 72 at 5.) However, Defendants have 14 essentially admitted that this is a cause of action, not an affirmative defense. Nowhere have 15 Defendants explained why this is an affirmative defense and simply a counter-claim or cross16 claim, neither of which Defendants have pleaded. The Court does not find it to be properly 17 asserted as an affirmative defense. The Court DENIES the motion as to this proposed 18 affirmative defense. 19 20 Conclusion Defendants have proposed two affirmative defenses which are properly asserted. The

21 Court GRANTS leave to amend the Answer and assert Affirmative Defenses 7.10 (as drafted in 22 the reply brief with grammatical errors fixed) and 7.12. However, Affirmative Defenses 7.11 23 24
ORDER ON DEFENDANTS' MOTION TO AMEND- 5

1 and 7.13 are not properly asserted. The Court DENIES the motion as to these defenses. 2 Defendants are ordered to file their amended answer within 5 days of this order. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
ORDER ON DEFENDANTS' MOTION TO AMEND- 6

The clerk is ordered to provide copies of this order to all counsel. Dated this 10th day of December, 2010.

Marsha J. Pechman United States District Judge

A