United States District Court, N.D. Indiana, Hammond Division
SUMMER FURNITURE ON GRANT STREET, INC., d/b/a SUMMER FURNITURE, INC., Plaintiff,
SECURITY NATIONAL INSURANCE COMPANY and NORTHERN UNDERWRITING MANAGERS, INC., d/b/a NORTHERN ILLINOIS INSURANCE AGENCY, Defendants.
OPINION AND ORDER
E. MARTIN MAGISTRATE JUDGE.
matter is before the Court on Defendants' Joint Motion
for Leave to File Amended Answers and Affirmative Defenses
[DE 67], filed by Defendants on July 29, 2016. Plaintiff
filed a Response on August 8, 2016, and Defendant Northern
Underwriting Managers, Inc. filed a reply on August 15, 2016.
sued Defendants on September 21, 2015, alleging
insurance-related claims arising out of a fire that destroyed
Plaintiff's business property. Defendant Security
National Insurance Company filed an Answer and Affirmative
Defenses on November 16, 2015. Northern Underwriting did the
same on November 20, 2015.
Court initially set a May 15, 2016, deadline for Defendants
to amend their pleadings, but on Defendants' motion the
Court later extended Defendants' deadline for amending
pleadings to July 29, 2016. On that date, Defendants filed a
motion seeking to add affirmative defenses that
“Plaintiff's claims may be barred or limited
because of arson.” Arson is not among the affirmative
defenses enumerated in Rule 8(c)(1), but “it is
generally held that arson is an affirmative defense to be
established by proof . . . that the insured participated in
the burning of the property to obtain the insurance
proceeds.” Palace Entertainment, Inc. v. Bituminous
Cas. Corp., 793 F.2d 842, 844 (7th Cir. 1986) (internal
argue that they should be allowed to add affirmative defenses
of arson because “substantial circumstantial
evidence” indicates that the fire that destroyed
Plaintiff's property was caused by arson. Plaintiff
counters that Defendants' proposed affirmative defenses
“are nothing more than bare, conclusory
Rule of Civil Procedure 15 provides that “a party may
amend its pleading only with . . . the court's
leave.” Fed.R.Civ.P. 15(a)(2). The Rule further
provides that the Court “should freely give leave when
justice so requires.” Id. The decision to
grant or deny a motion to amend lies within the Court's
sound discretion, but leave to amend is “inappropriate
where there is undue delay, bad faith, dilatory motive on the
part of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the
opposing party by virtue of allowance of the amendment, or
futility of the amendment.” Villa v. City of
Chicago, 924 F.2d 629, 632 (7th Cir. 1991); Campbell
v. Ingersoll Milling Mach. Co., 893 F.2d 925, 927 (7th
Plaintiff does not argue that it will suffer prejudice if
Defendants are allowed to amend their affirmative defenses.
Nor does Plaintiff allege any undue delay, bad faith, or
dilatory motive by Defendants, and Defendants have not
repeatedly failed to cure deficiencies in their answers. The
only question, then, is whether the proposed affirmative
defenses are futile. Plaintiff argues that the proposed
affirmative defenses are futile because they do not satisfy
the Federal Rules of Civil Procedure's pleading
requirements and would be subject to dismissal under Rule
Plaintiff notes, affirmative defenses are pleadings and are
therefore subject to the Federal Rules of Civil
Procedure's pleading requirements. Heller Fin., Inc.
v. Midwhey Powder Co., 883 F.2d 1286, 1294 (7th Cir.
1989). The familiar pleading requirements for a
complaint come from Bell Atl. Corp. v.
Twombly, 550 U.S. 544 (2007), and Ashcroft v.
Iqbal, 556 U.S. 662 (2009). To satisfy Twombly
and Iqbal and survive a Rule 12(b)(6) motion to
dismiss, a complaint must provide “a short and plain
statement of the claim showing that the pleader is entitled
to relief, ” see Fed. R. Civ. P. 8(a)(2), and
“must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on
its face.'” Iqbal, 556 U.S. at 678
(quoting Twombly, 550 U.S. at 570).
district courts are divided on the question of whether an
affirmative defense must comply with
Twombly and Iqbal's heightened pleading
standard. See Cottle v. Falcon Holdings Mgmt., LLC,
No. 11-95, 2012 U.S. Dist. LEXIS 10478, *3-4 (N.D. Ind. Jan.
30, 2012) (collecting cases on both sides); Husainy v.
Allied Collection Serv., Inc., No. 15-95, 2016 U.S.
Dist. LEXIS 54073, *2 (N.D. Ind. Apr. 22, 2016) (“The
Seventh Circuit Court of Appeals has not yet decided whether
the pleading standard for a complaint set forth in
[Twombly and Iqbal] applies to ...
courts have held that Twombly and Iqbal do
apply to affirmative defenses. See, e.g., HCRI TRS
Aquirer, LLC v. Iwer, 708 F.Supp.2d 687, 691 (N.D. Ohio
2010) (“the pleading requirements for affirmative
defenses are the same as for claims of relief”);
Barnes v. AT&T Pension Benefit Plan, 718
F.Supp.2d 1167, 1171 (N.D. Cal. 2010) (“the vast
majority of courts . . . have extended Twombly's
heightened pleading standard to affirmative defenses”)
courts in the Northern District of Indiana have generally
held that an affirmative defense need not satisfy
Twombly and Iqbal. See Cottle,
2012 U.S. Dist. LEXIS 10478 at *5 (“This Court agrees
with those cases declining to apply the
‘plausibility' standard of Iqbal and
Twombly to affirmative defenses.”);
Fletcher v. Hoeppner Wagner & Evans, LLP, No.
14-231, 2015 U.S. Dist. LEXIS 153057, *19 (N.D. Ind. Nov. 12,
2015) (“the Court declines to apply to affirmative
defenses the plausibility standard applied in Iqbal
and Twombly”); Husainy, 2016 U.S.
Dist. LEXIS 54073 at *2 (“This Court continues to agree
with those cases declining to apply . . . Iqbal and
Twombly to affirmative defenses.”).
this view, an affirmative defense need not satisfy
Twombly and Iqbal's plausibility
standard, but the affirmative defense must still contain a
“short and plain statement” of the defense
itself. Heller Fin., Inc. v. Midway Powder Co., 883
F.2d 1286, 1294 (7th Cir. 1989). Affirmative defenses must be
stricken if they contain “nothing but bare bones
conclusory allegations” without “any
short and plain statement of facts.” Id. at
1295 (emphasis added). In essence, an affirmative defense
must “be adequately pled to put a plaintiff on notice
of the defense.” Cottle, 2012 U.S. Dist. LEXIS
10478 at *12; Design Basics, LLC v. Windsor Homes,
Inc., No. 16-51, 2016 U.S. Dist. LEXIS 91910, *8 (N.D.
Ind. July 14, 2016) (denying motion to strike affirmative
defenses because the affirmative defenses were stated
“in short and plain terms” and
“sufficiently put [the plaintiff] on notice of the