Shaughnessy v. LVNV Funding, LLC

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 GRADY SHAUGHNESSY, individually Case No.: 20-cv-1809-DMS-WVG and on behalf of all others similarly 12 situated, ORDER DENYING PLAINTIFF’S 13 MOTION TO STRIKE AND Plaintiff, GRANTING DEFENDANTS LEAVE 14 v. TO AMEND 15 LVNV FUNDING, LLC; RESURGENT 16 CAPITAL SERVICES, LP, 17 Defendants. 18 19 Pending before the Court is Plaintiff Grady Shaughnessy’s motion to strike portions 20 of Defendants LVNV Funding, LLC, and Resurgent Capital Services, LP’s (“Defendants”) 21 Answers to the Complaint. Defendants filed an opposition, in which they counter-moved 22 for leave to amend, and Plaintiff filed a reply. For the following reasons, the Court grants 23 Defendants leave to amend and denies Plaintiff’s motion to strike as moot. 24 I. 25 BACKGROUND 26 On August 11, 2020, Plaintiff filed a putative class action complaint in California 27 Superior Court, alleging violation of the California Consumer Credit Reporting Act, Cal. 28 Civ. Code § 1785.25(a). (Compl., Ex. A to ECF No. 1.) On September 14, 2020, 1 Defendants removed the action to this Court. (ECF No. 1.) On September 21, 2020, 2 Defendants each filed an Answer to the Complaint, (ECF Nos. 5, 7.) Both Answers assert 3 the following affirmative defenses: (1) Cal. Civ. Code § 1785.25(g), (2) failure to exhaust 4 administrative remedies, (3) statute of limitations, (4) contributory negligence, (5) failure 5 to mitigate, (6) estoppel, (7) laches, (8) unclean hands, (9) waiver, (10) good faith, (11) 6 failure to state a claim, (12) conduct of third parties, and (13) reservation of the right to 7 assert additional affirmative defenses. (ECF Nos. 5, 7.) Plaintiff filed the present motion 8 on October 13, 2020. (ECF No. 11.) 9 II. 10 DISCUSSION 11 Plaintiff moves to strike portions of Defendants’ Answers, arguing certain defenses 12 are not affirmative defenses, and others fail to give fair notice of the nature of the defense. 13 See Fed. R. Civ. P. 12(f). 14 Generally, motions to strike are disfavored because pleadings are of limited 15 importance in federal practice and such motions are usually used as a delaying tactic. RDF 16 Media Ltd. v. Fox Broadcasting Co., 372 F. Supp. 2d 556, 566 (C.D. Cal. 2005). Motions 17 to strike are also disfavored because of the “strong policy favoring resolution on the 18 merits.” Barnes v. AT & T Pension Benefit Plan–Nonbargained Program, 718 F. Supp. 2d 19 1167, 1170 (N.D. Cal. 2010). Moreover, even when a motion to strike is granted, courts 20 typically grant leave to amend stricken pleadings unless it would prejudice the opposing 21 party. Kohler v. Staples the Office Superstore, LLC, 291 F.R.D. 464, 467 (S.D. Cal. 2013). 22 Defendants contend their defenses raise disputed questions of fact and law and thus 23 should not be stricken. Defendants further request leave to amend the Answers. 24 Defendants state they intended to file Amended Answers pursuant to Federal Rule of Civil 25 Procedure 15(a)(1), but failed to do so within the 21-day time period. See Fed. R. Civ. P. 26 15(a)(1). In opposition to Defendants’ request for leave to amend, Plaintiff argues 27 Defendants did not comply with the Civil Local Rules governing motions, including 28 motions to amend. See CivLR 7.1.b (requiring party to obtain hearing date for motion); 1 CivLR 15.1 (requiring motion to amend to include copy of proposed amended pleading 2 and version that shows how the proposed amended pleading differs from operative 3 pleading). Defendants filed Amended Answers at the same time as they filed their 4 opposition to Plaintiff’s motion, despite being outside of the 21-day window to amend 5 (ECF Nos. 14, 15), and counter-moved to amend in response to Plaintiff’s motion, rather 6 than filing a separate motion (ECF No. 16). The Court notes Plaintiff’s argument but 7 declines to deny Defendants’ counter-motion on this basis. However, the parties are 8 directed to comply with the Local Rules moving forward in this case. 9 The Court finds the present issues are best resolved by granting Defendants leave to 10 amend. Even if a party does not amend its pleading within the 21-day time period 11 prescribed by Rule 15(a)(1), the court “should freely give leave” to amend “when justice 12 so requires.” Fed. R. Civ. P. 15(a)(2). In accordance with this Rule, the Supreme Court 13 has stated, 14 in the absence of any apparent or declared reason—such as undue delay, bad 15 faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the 16 opposing party by virtue of allowance of the amendment, futility of 17 amendment, etc.—the leave sought should, as the rules require, be “freely given.” 18 19 Foman v. Davis, 371 U.S. 178, 182 (1962). Of these factors, the Ninth Circuit has stated 20 “it is the consideration of prejudice to the opposing party that carries the greatest weight.” 21 Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). Absent 22 prejudice, or a strong showing of any of the remaining Foman factors, there exists a 23 presumption under Rule 15(a) in favor of granting leave to amend. Id. 24 Here, granting Defendants leave to amend will give Defendants the opportunity to 25 cure the purported defects alleged in Plaintiff’s motion to strike. Moreover, Plaintiff does 26 not assert that granting leave to amend would result in prejudice. Although granting leave 27 to amend will render Plaintiff’s pending motion to strike moot, Plaintiff may renew the 28 motion if he chooses to do so. Thus, Plaintiff has not shown he would be prejudiced by 1 || Defendants’ proposed amendments. Indeed, even if the Court were to grant Plaintiff’s 2 ||motion to strike, leave to amend would likely be given. See Kohler, 291 F.R.D. at 467 3 || (stating even when motion to strike is granted, courts typically grant leave to amend unless 4 would prejudice opposing party). Accordingly, in the interests of justice, the Court grants 5 ||Defendants’ request for leave to amend their Answers and denies Plaintiff's motion to 6 || strike as moot. 7 II. 8 CONCLUSION AND ORDER 9 For the reasons set out above, the Court grants Defendants leave to file Amended 10 || Answers within fourteen (14) days of this Order and directs Defendants to withdraw the 11 || previously filed “Amended Answers” (ECF Nos. 14, 15). In light of this ruling, Plaintiff’ s 12 ||motion to strike is denied as moot. Plaintiff may renew his motion to strike once 13 || Defendants file Amended Answers, or if Defendants do not file Amended Answers within 14 || the ordered timeframe. 15 IT IS SO ORDERED. 16 17 || Dated: December 23, 2020 18 ns my. L4\ Hon. Dana M. Sabraw 19 United States District Judge 20 21 22 23 24 25 26 27 28