United States District Court, D. Nevada
REPORT & RECOMMENDATION (DOCKET NO. 53)
J. KOPPE UNITED STATES MAGISTRATE JUDGE
before the Court is Plaintiff's motion to strike
Defendants William Weidner and David Jacoby's
(“Defendants”) answer at Docket No. 21. Docket
No. 53. The Court has considered Plaintiff's motion,
Defendants' response, and Plaintiff's reply. Docket
Nos. 53, 63, 86. The motion is properly resolved without a
hearing. See Local Rule 78-1. For the reasons stated
below, the Court RECOMMENDS that the motion
be GRANTED in part and
DENIED in part.
case arises from a loan by Plaintiff to Defendant Lucky
Dragon LP (LDLP) to build a new hotel and casino. Docket No.
1 at 2. Defendants Andrew Fonfa, Weidner, and Jacoby signed a
guaranty for the loan. Docket No. 53 at 2. Plaintiff sues
Defendants because, it alleges, Defendant “LDLP did not
repay the loan, the Guarantor Defendants refused to [honor]
the Guaranty, and” Plaintiff, upon selling the hotel
and casino, “incurred a substantial deficiency.”
Id. Plaintiff alleges breach of contract and
deficiency claims against Defendants. Id.
“may strike from a pleading an insufficient defense or
any redundant, immaterial, impertinent, or scandalous
matter.” Fed.R.Civ.P. 12(f). The rule's aim is
“to avoid the expenditure of time and money that
[arises] from litigating spurious issues by dispensing
with” them before trial. Fantasy, Inc. v.
Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993).
to grant a motion to strike is within the district
court's discretion. See Nurse v. United States,
226 F.3d 996, 1000 (9th Cir. 2000). However, such motions are
usually disfavored. Nevada Fair Hous. Ctr., Inc. v. Clark
County, 565 F.Supp.2d 1178 (D. Nev. 2008) (citations
omitted). “[C]ourts often require a showing of
prejudice by the moving party before granting the requested
relief.” Roadhouse v. Las Vegas Metro. Police
Dep't, 290 F.R.D. 535, 543 (D. Nev. 2013) (internal
quotation marks omitted). Further, “[u]nless it would
prejudice the opposing party, courts freely grant leave to
amend stricken pleadings.” Kohler v. Islands
Restaurants, LP, 280 F.R.D. 560, 564 (S.D. Cal. 2012)
(citing Wyshak v. City Nat't Bank, 607 F.2d 824,
826 (9th Cir. 1979)).
asks the Court to strike “paragraphs 40 and 50 and
[all] the affirmative defenses” in Defendants'
answer. Docket No. 53 at 3. The Court addresses the
paragraphs and affirmative defenses in turn.
Paragraphs 40 and 50
40 and 50 of Plaintiff's complaint allege that it had
“performed all conditions required of it” under
“the Construction Loan Agreement, Secured Promissory
Note, and Secured Lined of Credit” and under the
“Guaranty and the Loan Documents.” Docket No. 1
at 8, 9. Defendants' answer to paragraph 40 states that:
[Defendant LDLP] borrowed money from Plaintiff. Defendants
deny any allegations that are inconsistent with the terms of
the Construction Loan, the Secured Promissory Note, the
Secured Line of Credit and the course of dealing between the
parties. Defendants further assert that any liability on the
part of [Defendant LDLP] in relation to the Construction
Loan[, ] the Secured Promissory Note, [or] the Secured Line
of Credit is subject to all defenses, offsets and
counterclaims that [Defendant LDLP] and/or the Defendants may
have against Plaintiff. Defendants are without knowledge to
admit or deny the remaining allegations contained therein and
therefore deny the same.
Docket No. 21 at 8. Defendants' answer to paragraph 50
states that they “deny” the allegations.
Id. Plaintiff submits that these responses violate
Fed.R.Civ.P. 9(c) and fail to give it fair notice and thus
should be stricken.
9(c) requires a party “denying that a condition
precedent has occurred or been performed” to do
“so with particularity.” The Ninth Circuit has
not interpreted that requirement. See Ghorbanian v.
Guardian Life Ins. Co. of Am., 2016 WL 4467941, at *3
(W.D. Wash. Mar. 2, 2016). However, other courts in
this Circuit have looked to the Seventh Circuit for guidance.
See, e.g., id. (collecting cases). The
Seventh Circuit has held that Rule 9(c) requires the pleading
party to “specifically allege” that a particular
condition precedent has not been performed. Smith v.
Wal-Mart Stores, 2006 WL 2711468, at *7 (N.D. Cal. Sept.
20, 2006) (citing Runnemede Owners, Inc. v. Crest Mortg.
Corp., 861 F.2d 1053, 1057-58 (7th Cir. 1988)).
Court finds that Defendants' answers violate Rule 9(c).
Neither answer specifically alleges that a particular
condition precedent has not occurred or been performed.
Because Defendants' answers violate Rule 9(c), the Court
need not decide whether they otherwise fail to give Plaintiff
fair notice. Accordingly, the Court
RECOMMENDS that Plaintiff's motion to
strike be GRANTED as to paragraphs 40 and 50
of Defendants' answer. The Court further
RECOMMENDS that Defendants be granted leave
to amend to cure the noted deficiencies.
answer contains twenty-nine affirmative defenses. Docket No.
21 at 11-13. Plaintiff submits that, for several reasons, all
twenty-nine should be stricken. Docket No. 53 at 7- 18. The
Court analyzes Defendants' affirmative defenses in ...