United States District Court, E.D. Michigan, Southern Division
FEDERAL DEPOSIT INSURANCE CORPORATION AS RECEIVER FOR WASHINGTON MUTUAL BANK, Plaintiff,
FIRST AMERICAN TITLE INSURANCE COMPANY, Defendant.
ORDER GRANTING PLAINTIFF'S MOTION TO STRIKE CERTAIN AFFIRMATIVE DEFENSES [#11]
GERSHWIN A. DRAIN, District Judge.
On September 18, 2014, Plaintiff, Federal Deposit Insurance Corporation as Receiver for Washington Mutual Bank ("FDIC-R"), filed a Complaint against Defendant, First American Title Insurance Company ("First American"). See Dkt. No. 1. In the Complaint, FDIC-R brings a single count of breach of contract against First American. Id. FDIC-R alleges that First American refused to honor its obligations under a Closing Protection Letter (the "CPL") issued in connection with a residential real estate transaction financed by Washington Mutual Bank ("WaMu"). Id. FDIC-R seeks damages from First American due to losses suffered as a result of purported fraud, dishonesty, and misconduct of First American's authorized issuing agent. Id. FDIC-R contends that First American agreed to indemnify FDIC-R for the actions of the authorized issuing agent under the CPL. Id.
In response to FDIC-R's Complaint, First American has asserted several affirmative defenses. See Dkt. No. 4. Presently before the Court is FDIC-R's Motion to Strike Certain Affirmative Defenses. See Dkt. No. 11. Specifically, FDIC-R seeks dismissal of First American's Third, Fourth, Seventh, Ninth, and Tenth affirmative defenses. This matter is fully briefed and a hearing was held on January 26, 2015. For the reasons discussed herein, the Court GRANTS FDIC-R's Motion to Strike Certain Affirmative Defenses.
II. LAW & ANALYSIS
A. Legal Standard
Pursuant to Rule 12(f) of the Federal Rules of Civil Procedure, "[t]he court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed.R.Civ.P. 12(f). The Court may strike improper material from pleadings either sua sponte or following a motion of a party. See Fed.R.Civ.P. 12(f)(1), (2). "Although the action of striking a pleading should be used sparingly by the courts, motions to strike are generally granted where the allegations are clearly immaterial to the controversy or would prejudice the movant." Spizizen v. Nat'l City Corp., No. 09-11713, 2010 WL 419993, at *2 (E.D. Mich. Feb.1, 2010) (Rosen, J.) (citing Brown & Williamson Tobacco Corp. v. United States, 201 F.2d 819, 822 (6th Cir. 1953)). "Ultimately, the decision to strike a pleading is firmly within the discretion of the court." Id. (citation omitted); see also Sheets v. U.S. Bank, Nat. Ass'n, No. 14-10837, 2014 WL 5499382, at *2 (E.D. Mich. Oct. 30, 2014) (Steeh, J.).
B. Legal Analysis
Plaintiff asserts that the Court should strike Defendant's Third, Fourth, Seventh, Ninth, and Tenth affirmative defenses because Plaintiff contends that the affirmative defenses are improper and/or legally insufficient. With respect to Defendant's Third and Fourth affirmative defenses, Plaintiff cites the Sixth Circuit and other courts throughout the country to argue these defenses should be stricken because FDIC-R does, in fact, have standing to enforce claims under the CPL issued to WaMu.
For Defendant's Seventh, Ninth and Tenth affirmative defenses, Plaintiff contends that contributory negligence is not a valid defense in a breach of contract case. Lastly, Plaintiff contends it will be greatly prejudiced if it is forced to engage in discovery relating to all of the aforementioned affirmative defenses because it will be compelled to expend unnecessary time and expenses associated with discovery. The Court will address these arguments, as well as Defendant's responses, in turn.
1. The Court will strike Defendant's affirmative defenses regarding standing given precedent from the Sixth Circuit.
On April 24, 2014, the United States Court of Appeals for the Sixth Circuit upheld a district court decision from the United States District Court for the Eastern District of Michigan and found that the "FDIC  had all the same rights as WaMu in the CPL, and it may bring a breach of contract claim based on that document." JPMorgan Chase Bank, N.A. v. First Am. Title Ins. Co., 750 F.3d 573, 580 (6th Cir. 2014), as amended (July 2, 2014).
Here, Defendant requests that the Court abstain from ruling on Plaintiff's Motion to Strike with respect to the standing defenses because "First American is in the process of filing a petition for a writ of certiorari to the United States Supreme Court from the Sixth Circuit Decision." Dkt. No. 12 at 9. The Court will not abstain from ruling on Plaintiff's Motion.
"[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes in its docket with economy of time and effort for itself, for counsel and for litigants." Ohio Envtl. Council v. U.S. Dist. Court, S. Dist. of Ohio, E. Div., 565 F.2d 393, 396 (6th Cir. 1977) (quoting Landis v. North American Company, 299 U.S. 248, 254, 57 S.Ct. 163, 166, 81 L.Ed. 153 (1936)). "How this can best be done calls for the exercise of ...