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MSP Recovery, LLC v. Allstate Insurance Co.

United States District Court, S.D. Florida

August 17, 2017

MSP RECOVERY, LLC, Plaintiff,
v.
ALLSTATE INSURANCE COMPANY, Defendant.

          ORDER ON PLAINTIFF'S MOTION TO STRIKE DEFENDANT'S AFFIRMATIVE DEFENSES

          EDWIN G. TORRES, UNITED STATES MAGISTRATE JUDGE.

         This matter is before the Court on a Motion to Strike Affirmative Defenses filed by Plaintiff MSP RECOVERY, LLC (“Plaintiff”) on May 30, 2017. [D.E. 62].

         Defendant ALLSTATE INSURANCE COMPANY (“Defendant” or “Allstate”) filed its Response to the Motion on June 12, 2017 [D.E. 63], and the Reply followed on June 19. [D.E. 64].[1] After a review of the Motion, Response, Reply, and the relevant authorities, Plaintiff's Motion is hereby GRANTED in part and DENIED in part.

         I. FACTUAL BACKGROUND AND LEGAL STANDARD

         This case involves a dispute between two insurers as to which is responsible for payment of a patient's medical bills. The incident giving rise to the claim occurred on June 19, 2014, when a Medicare enrollee suffered injuries in a car accident. Florida Healthcare Plus (“FHCP”) paid medical expenses associated with the enrollee's injuries in the amount of $1, 284.10. At the time the incident took place, Defendant allegedly provided “no-fault” vehicular insurance coverage to the enrollee, and Plaintiff asserts it should be reimbursed for the expenses paid as a result of several assignments of FHCP's rights. [D.E. 30, ¶ 25-26]. In this Motion, Plaintiff moves to strike certain defenses raised by Defendant in its Answer to the Second Amended Complaint. [D.E. 62].

         Rule 12(f) permits a court to strike an insufficient defense. See Fed. R. Civ. P. 12(f). Striking an affirmative defense is a drastic remedy that is disfavored and should only be granted if it is clear that the defense must fail. Electronic Comm. Tech., LLC v. Clever Athletics Co., LLC, 221 F.Supp.3d 1366, 1367 (S.D. Fla. 2016) (citing Augustus v. Bd. of Pub. Instruction of Escambia County, 306 F.2d 862, 868 (5th Cir. 1962)). Furthermore, “both because striking a portion of a pleading is a drastic remedy and because it often is sought by the movant simply as a dilatory or harassing tactic…motions under Rule 12(f) are viewed with disfavor and infrequently granted.” 5C Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: Civil § 1380 (3d ed. 2008). “[I]t must be shown that the allegations being challenged are so unrelated to plaintiff's claims as to be unworthy of any consideration as a defense and that their presence in the pleading throughout the proceeding will be prejudicial to the moving party.” Id.

         Affirmative defenses are subject to the same pleading scrutiny imposed by Rule 8's plausibility standard. See Bell At. Corp. v. Twombly, 550 U.S. 544, 555-56 (2009); Ashcroft v. Iqbal, 556 U.S. 662 (2009); see also Losada v. Norwegian (Bahamas) Ltd., 296 F.R.D. 688, 691 (S.D. Fla. 2013) (“After reviewing the case law on the issue and the purpose of an affirmative defense, this Court finds that affirmative defenses should be subject to the same general pleading standards of complaints.”). Rule 8(a)(2) requires “a short and plain statement of the claim showing that the pleader is entitled to relief, ” which should be sufficient to give the opposing party fair notice of the claim and its grounds. See Twombly, 550 U.S. at 555-56. The pleading must articulate enough facts to raise a plausible right to relief on the assumption that all of the non-conclusory, factual allegations in the complaint are true. Id. at 555. Formulaic recitations filled with labels and conclusions without factual allegations are insufficient. Id.

         We now turn to each affirmative defense Plaintiff challenges in its Motion.

         II. ANALYSIS

         A. Defendant's First Affirmative Defense

         Allstate's first affirmative defense states that Plaintiff must have a valid assignment from FHCP in order to recover damages and that absent such an assignment, “Plaintiff lacks standing to sue.” Although this affirmative defense fails to raise facts that would suffice under Rule 8's pleading standards, we are hesitant to strike it because it raises a question as to whether this Court maintains subject matter over the dispute. A court maintains broad discretion when determining whether to strike defenses under Rule 12(f), and it may decline to do so when there is a substantial or disputed question of law. See Wausau Bus. Ins. Co. v. Horizon Admin. Servs., LLC, 803 F.Supp.2d 209, 213 (E.D.N.Y. 2011) (“To strike an affirmative defense as insufficient…the court must first find that there are no substantial questions of law or fact that might allow the defense to succeed[.]”). Because striking an affirmative defense is generally disfavored, and in light of the broad discretion we have in determining whether striking a portion of the pleading is justified, Plaintiff's Motion as to Defendant's first affirmative defense is DENIED. Defendant should be allowed to plead the issue for the record.

         B. Defendant's Third Affirmative Defense

         The third affirmative defense states that Plaintiff's claims are barred “to the extent it failed to comply with § 627.736(10), Fla. Stat., which requires as a condition precedent to filing any action for personal injury protection benefits written notice of intent to initiate litigation.” Rule 9 of the Federal Rules of Civil Procedure require that “when denying that a condition precedent has occurred or been performed, a party must do so with particularity.” Fed.R.Civ.p. 9(c). The affirmative defense contains factual assertions that Plaintiff's pre-suit correspondence (1) failed to attach any assignment of benefits and (2) failed to provide “itemization of the charges, treatment, service or accommodation and the type of benefit claimed to be due.” This comports with Rule 12's pleading requirements, Twombly, 550 U.S. at 555, and Plaintiff's request as to the third affirmative defense is therefore DENIED. Cf. Falzarano v. Retail Brand Alliance, Inc., 2008 WL 899257, *2 (S.D. Fla. Mar. 31, 2008) (striking affirmative defense based on failure to comply with pre-suit requirements due to conclusory nature and because answering party failed to include facts that indicated whether such failure actually took place).

         C. Defendant's Fourth ...


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