United States District Court, D. Nevada
REPORT AND RECOMMENDATION MOTION TO STRIKE (ECF NO.
Ferenbach, United States Magistrate Judge.
matter concerns the allegedly fraudulent transfer of funds
from Mojave Aluminum Company, Inc. (“Mojave”) to
Defendant Dean Kajioka. Before the Court are Plaintiff Novva
Ausrustung Group. Inc.'s (“Novva's”)
Motion to Strike (ECF No. 29), Kajioka's opposition (ECF
No. 30), and Novva's reply (ECF No. 31). For the reasons
stated below, the Court recommends that Novva's motion to
strike be granted in part and denied in part.
2015, Novva entered into a loan agreement with Mojave and
transferred $1.8 million to Mojave to develop an aluminum
plant in California. (ECF No. 1 at 4). Mojave failed to pay
back the loan on time. (Id.). Novva discovered
Mojave was insolvent and sued Mojave and its operator, Mr.
Shen, for breach of contract, fraud, and related claims.
(Id.). While investigating its case against Mojave
and Mr. Shen, Novva discovered that Mr. Shen had transferred
over $500, 000 of Mojave's funds to Kajioka, a licensed
attorney. (Id. at 4-5). In May 2017, Novva brought a
claim for fraudulent transfer against Kajioka, asserting the
funds were (1) not for legitimate services rendered and (2)
transferred “with actual intent to defraud, hinder, or
delay” Mojave's creditors, including Novva.
(Id. at 6). As proof of Mojave's intent to
defraud, Novva asserted the funds were transferred to an
insider (Kajioka), and the “value of purported legal
services received by Mojave were not reasonably equivalent to
the value of funds transferred to Kajioka.”
(Id. at 7).
filed an answer in July 2015. (ECF No. 21). In his answer,
Kajioka asserts a number of affirmative defenses claiming he
received funds from Mr. Shen based on legitimate and
extensive legal services, Novva was negligent in supervising
Mr. Shen's spending, and Kajioka was not an insider of
Mojave. (Id. at 6-8). Novva also asserts
“[t]his litigation…is retaliatory by Liu
[Zhongtian] indirectly based upon Kajioka having both a
personal and profession relationship with Shen and a falling
out occurring between Shen and Liu.” (Id. at
9). Kajioka goes on to explain how Liu, through his
“network of affiliates and agents, ” controls
Novva. (Id.). Novva subsequently filed a motion to
strike many of Kajioka's affirmative defenses. (ECF No.
Rule of Civil Procedure 12(f) states that “[t]he court
may strike from a pleading an insufficient defense or any
redundant, immaterial, impertinent, or scandalous
matter.” The purpose of a Rule 12(f) motion to strike
is “to avoid the expenditure of time and money that
must arise from litigating spurious issues by dispensing with
those issues prior to trial.” Whittlestone, Inc. v.
Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010)
(quoting Fantasy, Inc. v. Fogerty, 984 F.2d 1524,
1527 (9th Cir. 1993), rev'd on other grounds,
Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994));
see also 2 James Wm. Moore, Moore's Federal
Practice, § 12.37, 128-29 (3d ed. 2017)
(“To prevail on this motion to strike, the movant must
clearly show that the challenged matter ‘has no bearing
on the subject matter of the litigation and that its
inclusion will prejudice the defendants.'”).
matter stricken under Rule 12(f) must be either: (1) an
insufficient defense; (2) redundant; (3) immaterial; (4)
impertinent; or (5) scandalous. Whittlestone, Inc.,
618 F.3d at 973-74. An allegation is “immaterial”
it if “has no essential or important relationship to
the claim for relief or the defenses being pleaded.”
Fogerty, 984 F.2d at 1527 (quoting 5A Charles A.
Wright & Arthur R. Miller, Federal Practice and
Procedure § 1382, at 706-07 (1990)).
“Impertinent” matters consist of statements that
do not pertain, and are not necessary, to the issues in
question. Id. (quoting 5A Federal Practice and
Procedure § 1382, at 711).
to grant a motion to strike lies within the discretion of the
district court. Whittlestone, Inc., 618 F.3d at 973.
Though Rule 12(f) motions are generally disfavored,
“[a]ffirmative defenses that are insufficient as a
matter of law should be stricken.” D.E. Shaw
Laminar Portfolios, LLC v. Archon Corp., 570 F.Supp.2d
1262, 1271 (D. Nev. 2008). “[C]ourts often require a
showing of prejudice by the moving party before granting the
requested relief.” See Roadhouse v. Las Vegas
Metro. Police Dep't, 290 F.R.D. 535, 543 (D. Nev.
2013) (quotation omitted).
motion to strike addresses several of Kajioka's affirmative
defenses. To understand the parties' arguments, the Court
must first evaluate the necessary elements and possible
defenses to Novva's fraudulent transfer claim against
Kajioka. The Court will then address the affirmative defenses
based on their subject matter and the legal theory under
which they can survive or must be dismissed.
NRS 112.180(1)(a),  a “transfer made…by a debtor
is fraudulent to a creditor…if the debtor made the
transfer…[w]ith actual intent to hinder, delay or
defraud any creditor.” NRS 112.180(2) lists several
factors the court may consider in determining the
debtor's intent, including whether the transfer was to
“an insider, ” and whether “[t]he value of
the consideration received by the debtor was reasonably
equivalent to the value of the asset transferred or the
amount of the obligation incurred.” However, “[a]
transfer or obligation is not voidable under paragraph (a) of
subsection 1 of NRS 112.180 against a person who took in good
faith and for a reasonably equivalent value.” NRS
Defenses Based on Legal Services Kajioka ...