United States District Court, S.D. Florida
ORDER ON THE OWNERS' MOTION TO STRIKE
G. TORRES UNITED STATES MAGISTRATE JUDGE.
matter is before the Court on BNH IV HM TRI LLC'S and
1159 Hillsboro Mile LLC's (collectively, the
“Owners”) motion to strike Arturo
Rubinstein's, Fab Rock Investments, LLC's, and
Oceanside Mile LLC's (collectively,
“Plaintiffs”) affirmative defenses to the
Owners' counterclaims. [D.E. 387]. Plaintiffs responded
to the Owners' motion on April 22, 2019 [D.E. 393] to
which the Owners' replied on April 29, 2019. [D.E. 395].
Therefore, the Owners' motion is now ripe for
disposition. After careful consideration of the motion,
response, reply, and relevant authority, and for the reasons
discussed below, the Owners' motion to strike is
GRANTED in part and DENIED in
filed this action on May 22, 2017 and alleged the following
claims: federal and Florida RICO violations, tortious
interference, unjust enrichment conversion, rescission, quiet
title, and injunctive relief. [D.E. 1]. This case relates to
a Florida Limited Liability Company named Oceanside that was
formed in 2006. Mrs. Yehuda and her husband Mr. Yehuda were
Oceanside's two founding members. Oceanside's purpose
was to purchase, renovate, and operate the Sea Bonay Beach
Resort, a hotel located in Broward County, Florida (the
“Hotel Property”). The Yehudas transferred their
interests in Oceanside to the Trust, and, in 2007, 49.5% of
Oceanside's equity was sold to other
January 2012 - to avoid foreclosure - the Yehudas enlisted
the help of Mr. Rubinstein in offering his personal guaranty
to Oceanside's lender so that it would extend the
maturity date of a loan. Mr. Rubenstein apparently never gave
a personal guaranty to Oceanside's lender, as the lender
refused to extend the loan's maturity date. Nevertheless,
the Trust gratuitously assigned all of its interest in
Oceanside to Fab Rock, and Fab Rock was designated as
Oceanside's managing member.
these transfers, Plaintiffs allowed the Yehudas to continue
their management of the day to day operations of the Hotel
Property. In 2013, Oceanside filed for bankruptcy, but
recovered with the help of a multi-million-dollar loan from
Stonegate Bank and payments from Fab Rock. Shortly
thereafter, the Yehudas began attempts to secretly seize
control of Oceanside from Fab Rock. Plaintiffs claim that the
Yehudas forged Mr. Rubinstein's signature on an agreement
regarding the assignment of the Trust's interest in
Oceanside to Fab Rock and an amendment to that agreement
granting the Trust an option to reacquire that interest from
Fab Rock. Mrs. Yehuda disputes this contention and claims
that she properly exercised the option agreement by
delivering written notice to Mr. Rubinstein in December 2015.
2016, Plaintiffs uncovered certain improprieties about the
Yehudas' management of the Hotel Property. Plaintiffs
demanded that the Yehudas turn over management and operation
of the Hotel Property to Mr. Rubinstein. The Yehudas refused.
In August 2016, Oceanside filed a lawsuit in California to
remove the Yehudas from managing and operating the Hotel
Property, alleging that the Yehudas: (1) misappropriated
Oceanside's hotel proceeds, (2) created an entity to
seize control of Oceanside and to convince third parties that
the Yehudas were the managing members of Oceanside, and (3)
entered into transactions on behalf of Oceanside without its
knowledge or consent. In their defense, the Yehudas argue
that Fab Rock had no interest in Oceanside because the Trust
exercised its option to reacquire all of Fab Rock's
interest in Oceanside.
April 28, 2017, the buyers purchased the Hotel Property from
Oceanside for $13.5 million, pursuant to a warranty deed that
was recorded in Broward County's public records on May 1,
2017. Mrs. Yehuda signed the deed as the sole manager of
Oceanside. On the date of the sale, the Department's
records reflected that Mrs. Yehuda was Oceanside's sole
manager. Prior to the sale, Mrs. Yehuda also executed an
affidavit in connection with the closing - swearing (1) that
she was Oceanside's sole manager, (2) that she was
authorized to execute deeds and other documents necessary to
convey real property on Oceanside's behalf, and (3) that
all the prerequisites needed to authorize the Hotel
Property's sale had been effectuated. After Plaintiffs
learned of the transaction, they sued.
APPLICABLE PRINCIPLES AND LAW
may move to strike pursuant to Rule 12(f) of the Federal
Rules “an insufficient defense or any redundant,
immaterial, impertinent, or scandalous matter.”
Fed.R.Civ.P. 12(f). “An affirmative defense is one that
admits to the complaint, but avoids liability, wholly or
partly, by new allegations of excuse, justification or other
negating matter.” Royal Palm Sav. Ass'n v. Pine
Trace Corp., 716 F.Supp. 1416, 1420 (M.D. Fla. 1989)
(quoting Fla. East Coast Railway Co. v. Peters, 72
Fla. 311, 73 So. 151 (Fla. 1916)). Thus, affirmative defenses
are pleadings, and as a result, must comply with all the same
pleading requirements applicable to complaints. See Home
Management Solutions, Inc. v. Prescient, Inc., 2007 WL
2412834, at *1 (S.D. Fla. Aug. 27, 2007). Affirmative
defenses must also follow the general pleading standard of
Fed.R.Civ.P. 8(a), which requires a “short and plain
statement” of the asserted defense. See Morrison v.
Executive Aircraft Refinishing, Inc., 434 F.Supp.2d
1314, 1318 (S.D. Fla. 2005). A defendant must admit the
essential facts of the complaint and bring forth other facts
in justification or avoidance to establish an affirmative
defense. See id.
striking of an affirmative defense is a ‘drastic
remedy' generally disfavored by courts.” Katz
v. Chevaldina, 2013 WL 2147156, at *2 (S.D. Fla. May 15,
2013) (citations omitted); see also Blount v. Blue Cross
& Blue Shield of Florida, Inc., 2011 WL 672450, at
*1 (M.D. Fla. Feb. 17, 2011) (“Striking a defense . . .
is disfavored by the courts.”); Pandora Jewelers
1995, Inc. v. Pandora Jewelry, LLC, 2010 WL 5393265, at
*1 (S.D. Fla. Dec. 21, 2010) (“Motions to strike are
generally disfavored and are usually denied unless the
allegations have no possible relation to the controversy and
may cause prejudice to one of the parties”) (internal
quotations omitted) (quoting another source).
“defendant must allege some additional facts supporting
the affirmative defense.” Cano v. South Florida
Donuts, Inc., 2010 WL 326052, at *1 (S.D. Fla. Jan. 21,
2010). Affirmative defenses will be stricken if they fail to
recite more than bare-bones conclusory allegations. See
Merrill Lynch Bus. Fin. Serv. v. Performance Mach. Sys.,
2005 WL 975773, at *11 (S.D. Fla. March 4, 2005) (citing
Microsoft Corp. v. Jesse's Computers & Repair,
Inc., 211 F.R.D. 681, 684 (M.D. Fla. 2002)). “An
affirmative defense may also be stricken as insufficient if:
‘(1) on the face of the pleadings, it is patently
frivolous, or (2) it is clearly invalid as a matter of
law.”' Katz, 2013 WL 2147156, at *1
(citing Blount v. Blue Cross and Blue Shield of Fla.,
Inc., 2011 WL 672450 (M.D. Fla. Feb.17, 2011)).
a court must not tolerate shotgun pleading of affirmative
defenses, and should strike vague and ambiguous defenses
which do not respond to any particular count, allegation or
legal basis of a complaint.” Morrison v. Exec.
Aircraft Refinishing, Inc., 434 F.Supp.2d 1314, 1318
(S.D. Fla. 2005). An affirmative defense should only be
stricken with prejudice when it is insufficient as a matter
of law. See Kaiser Aluminum & Chemical Sales, Inc. v.
Avondale Shipyards, Inc., 677 F.2d 1045, 1057
(5th Cir. 1982) (citing Anchor Hocking Corp. v.
Jacksonville Elec. Auth., 419 F.Supp. 992, 1000 (M.D.
Fla. 1976)). Otherwise, district courts may strike the
technically deficient affirmative defense without prejudice
and grant the defendant leave to amend the defense.
Microsoft Corp., 211 F.R.D. at 684.