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Taylor v. J P Morgan Chase

United States District Court, N.D. Indiana, Hammond Division, Lafayette

November 7, 2016

ANTHONY G. TAYLOR, Plaintiff,
v.
J P MORGAN CHASE, CHASE HOME FINANCE, Defendant.

          OPINION AND ORDER

          JOHN E. MARTIN MAGISTRATE JUDGE.

         This matter is before the Court on Defendant's Motion for Leave to File First Amended Answer and Affirmative Defenses [DE 13], filed by Defendant on September21, 2016. Plaintiff has responded by filing a Motion to Strike [DE 18], which the Court has construed as a Response to Defendant's Motion. See DE 19. Defendants have replied [DE 20].

         I. Background

         Plaintiff sued Defendant in state court, alleging breach of contract and breach of the duty of good faith and fair dealing. Plaintiff says that, after Defendant offered him a trial modification to his mortgage payment plan under the federal Home Affordable Modification Program (HAMP), Defendant breached its agreement to convert the trial modification into a permanent modification.

         Defendant removed the case to federal court and filed an answer to the complaint. Defendant now asks for leave to file an amended answer that contains affirmative defenses not contained in Defendant's initial answer. Plaintiff objects on the ground that the proposed affirmative defenses do not comply with the Federal Rules of Civil Procedure.

         II. Analysis

         A party may amend a pleading with the Court's leave, and the Court "should freely give leave when justice so requires." Fed.R.Civ.P. 15(a)(2). 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. Inger soil Milling Mach. Co, 893 F.2d 925, 927 (7th Cir. 1990).

         Here, Plaintiff does not argue that he will suffer prejudice if Defendant is allowed to amend its affirmative defenses. Nor does Plaintiff allege any undue delay, bad faith, or dilatory motive by Defendant, and Defendant has not repeatedly failed to cure deficiencies in its affirmative defenses. The only question, then, is whether the proposed affirmative defenses are futile. Plaintiff says the proposed affirmative defenses are futile, because they do not meet the Federal Rules of Civil Procedure's pleading requirements. See Heller Fin, Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1294 (7th Cir. 1989) (affirmative defenses are pleadings and are therefore subject to the Federal Rules of Civil Procedure's pleading requirements).

         The familiar pleading requirements for a complaint come from Bell Ail. 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).

         But 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 . . . affirmative defenses.").

         Some 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'?, heightened pleading standard to affirmative defenses") (collecting cases).

         But 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.").

         Under this view, an affirmative defense need not satisfy Twombly and Iqbal? plausibility standard, but the affirmative defense must still contain a "short and plain statement" of the defense itself. Heller Fin., Inc. v. Midwhey 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 affirmative defenses"); accord Bielfeldt v. Bourazak, No. 15-1419, 2016 U.S. Dist. LEXIS 46986, *6 (CD. 111. Apr. 7, 2016) ("Federal Rule of Civil Procedure 8 requires for affirmative defenses, at a minimum, fair notice of a party's defense.").

         Here, Plaintiff argues that proposed affirmative defenses B, G, H, M, N, and O use the word "may" and are consequently not "affirmative" but are rather "a laundry list of maybes." For example, proposed affirmative defense B asserts that Plaintiff s claims "may be barred by his failure to mitigate damages." The Court agrees. Affirmative defenses must be stricken if they present merely "bare bones" or "conclusory" allegations, and the proposed affirmative defenses at issue are not even conclusory, as Defendant proposes to plead that Plaintiffs claims "may" be barred for various reasons-not that the claims are ...


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