Flying Fish Bikes, Inc. v. Giant Bicycle, Inc.
| Decision Date | 02 February 2015 |
| Docket Number | Case No: 8:13-cv-2890-T-23AEP |
| Parties | FLYING FISH BIKES, INC., a Florida corporation, Plaintiff, v. GIANT BICYCLE, INC., a California corporation, Defendant. |
| Court | U.S. District Court — Middle District of Florida |
This cause is before the Court on Plaintiff's Motion to Strike Affirmative Defenses ("Motion") (Dkt. No. 72) and Defendant's response thereto (Dkt. No. 75). For the reasons discussed below, the undersigned RECOMMENDS that Plaintiff's Motion be GRANTED IN PART AND DENIED IN PART.1
This action brought by Flying Fish Bikes, Inc. ("Fish") against Giant Bicycle, Inc. ("Giant") alleges fraud with intent and seeks both compensatory and punitive damages (Dkt. No. 64). In support, Fish avers Giant representative Geoff Godsey ("Godsey") intentionally misrepresented Giant's business intentions in the geographical region in an attempt to solicit a large volume order for inventory, all while being aware of Giant's intentions to imminently terminate its relationship with Fish and open its own store front in the same region. .Fish alleges that this material omission of information resulted in damages in excess of $100,000, and, additionally, warrants a finding of punitive damages. (Dkt. No. 64). In its amended answer, Giant denies the majority of Fish's allegations and presents sixteen affirmative defenses—seven of which are placed into issue by Plaintiff's Motion. (Dkt. No. 69).
Federal Rule of Civil Procedure 12(f) provides that "[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). "Although the Court has broad discretion in ruling on a motion to strike, such motions are disfavored due to their draconian nature." 126th Ave. Landfill, Inc. v. Pinellas County, Fla., No. 8:09-cv-307-T-33TBM, 2010 WL 3245309, at *1 (M.D. Fla. Aug. 17, 2010). Thus, "[a]n affirmative defense will only be stricken . . . if the defense is 'insufficient as a matter of law.'" Microsoft Corp. v. Jesse's Computers & Repair, Inc., 211 F.R.D. 681, 683 (M.D. Fla. 2002) (quoting Anchor Hocking Corp. v. Jacksonville Elec. Auth., 419 F. Supp. 992, 1000 (M.D. Fla. 1976)). An affirmative "defense is insufficient as a matter of law only if: (1) on the face of the pleadings, it is patently frivolous, or (2) it is clearly invalid as a matter of law." Id. "To the extent that a defense puts into issue relevant and substantial legal and factual questions, it is 'sufficient' and may survive a motion to strike, particularly when there is no showing of prejudice to the movant." Reyher v. Trans World Airlines, Inc., 881 F. Supp. 574, 576 (M.D. Fla. 1995) (citation omitted). Further, district courts have "broad discretion in disposing of motions to strike." Anchor Hocking, 419 F. Supp. at 1000.
Affirmative defenses are also subject to the general pleading requirements of Rule 8 of the Federal Rules of Civil Procedure. Rule 8(b)(1)(A) requires that a party "state in short and plain terms its defenses to each claim asserted against it." Fed. R. Civ. P. 8(b)(1)(A). AlthoughRule 8 does not obligate a defendant to set forth detailed factual allegations, a defendant must give the plaintiff "fair notice" of the nature of the defense and the grounds upon which it rests. Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007).
The Court, in turn, reviews Giant's Affirmative Defenses 3, 4, 5, 7, 12, 13, and 14.2
a. Third Affirmative Defense
GIANT alleges that its business relationship with BIKES was subject to and controlled by the non-exclusive Dealer Agreement that governed the respective rights, duties, and obligations of each party. Thus, BIKES' alleged damages, if any, are barred or limited in accordance with the Limitation of Liability provision contained within the Dealer Agreement.
b. Fourth Affirmative Defense
GIANT alleges that, at all times material, the Dealer Agreement with BIKES was non-exclusive, contained no territorial, geographic or non-competition limitations or restrictions and expressly did not confer a right to know or require either BIKES or GIANT to disclose to each other confidential business dealings with any other third-party. Thus, BIKES' claims are barred as a matter of law.
c. Fifth Affirmative Defense
GIANT alleges that, at all times material, its business relationship with BIKES was that of a "distributor and retailer" with no fiduciary duty owed by either party or conferred upon either party. Thus, GIANT did not have a duty to disclose to BIKES its confidential business dealings with other existing authorized GIANT retailers and BIKES had no right to know of those confidential business dealings.
d. Seventh Affirmative Defense
GIANT alleges that BIKES' reliance on purported misrepresentations by GIANT and/or its representatives, if any, was not reasonable or justified, in that, at all times material, the parties were sophisticated business entities acting at arms-lengths.
Fish contends Giant's Third, Fourth, Fifth, and Seventh Affirmative Defenses are insufficient as a matter of law as they fail to, under Florida law, have any effect on Fish's intentional tort claims. Moreover, Fish argues that the continued existence of these affirmative defenses in the proceedings would prejudice Fish by requiring additional discovery, argument, time, expense, and judicial resources. In response, Giant maintains its affirmative defenses are related to the controversy in that Fish's tort claim derives from the Dealer Agreement ("Agreement"), without which Fish's Complaint would fail to state a claim because Fish's allegations would not arise to the level of an independent tort.3 Giant ultimately contends that its affirmative defenses are properly pled, and, in the alternative, requests leave to amend them.
A matter of preliminary importance is the choice of law provision in the parties' Agreement. As Fish correctly contends, narrow choice of law provisions, such as the one contained in the Agreement,4 are not broad enough to encompass intentional torts relating to conduct outside the scope of contractual rights and duties. See Rayle Tech, Inc. v. DeKalb Swine Breeders, Inc., 133 F.3d 1405, 1409 (11th Cir. 1998). Because the choice of law provision is narrow, the Court must turn to the forum state, Florida, to determine the applicable law governing Fish's fraud claim. Green Leaf Nursery v. E.I. DuPont De Nemours & Co., 341 F.3d 1292, 1301 (11th Cir. 2003). Under Florida's "most significant relationship" test,5 it is clear thatFlorida law, the state where Fish's resale of Giant's product occurred and was set to continue, ought govern Fish's claims. See Bishop v. Florida Specialty Paint Co., 389 So. 2d 999, 1001 (Fla. 1980); id. (citing Garcia, 841 F.2d at 1064-65).
Having concluded Florida law governs Fish's intentional tort claims, the Court turns to whether Giant's Third Affirmative Defense is clearly invalid as a matter of law. Giant argues that Fish's fraud claim is inextricably intertwined with the Agreement's provisions, such that they control the relationship of the parties to the point of the former being contingent on the latter. This is not so. Florida law disfavors exculpatory clauses, and voids clauses that run contrary to public policy, such as those that preclude liability for intentional torts. See, e.g., Kellums v. Freight Sales Centers, Inc., 467 So. 2d 816, 817 (Fla. 5th DCA 1985); Goyings v. Jack & Ruth Eckerd Found., 403 So. 2d 1144, 1146 (Fla. 2d DCA 1981); Zuckerman-Vernon Corp. v. Rosen, 361 So. 2d 804, 806 (Fla. 4th DCA 1978). A party cannot contract against liability for its own fraud, See Rosen, 361 So. 2d at 806, and the Court need not look past the pleadings to make this determination. Therefore, Defendant's Third Affirmative Defense ought be held invalid as a matter of law. See Equal Employment Opportunity Comm'n v. First Nat'l Bank, 614 F.2d 1004, 1008 (5th Cir.1980), cert. denied, 450 U.S. 917 (1981) (citing 2A Moore's Federal Practice P 8.27(3), at 8251 (2d Ed. 1979)); see also Vance v. Westfalia Technologies, Inc., No. 8:12-CV-1902-EAK-TGW, 2013 WL 3270414, at *2 (M.D. Fla. June 26, 2013).
Next, Giant's Fourth and Fifth Affirmative Defenses are likewise insufficient as a matter of law. Giant contends it had no contractual duty to Fish to disclose information at issue and otherwise did not owe a fiduciary duty to Fish. While the facts underlying these contentions may be relevant to Giant's defense in general, particularly as they may relate to intent, they ultimatelyfail to bear any logical relationship to Fish's claims for fraud when structured as affirmative defenses. See Hassan v. U.S. Postal Serv., 842 F.2d 260, 263 (11th Cir. 1988) () (internal quotation omitted). Florida law does not require the existence of a fiduciary relationship to establish fraudulent inducement, and fraud claims do not depend on the existence or absence of underlying contractual provisions. HTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 685 So. 2d 1238, 1240 (Fla. 1996) (); TransPetrol, Ltd. v. Radulovic, 764 So. 2d 878, 880 (Fla. 4th DCA 2000) (); Nicholson v. Kellin, 481 So. 2d 931, 936 (Fla. 5th DCA 1985) (same); Vokes v. Arthur Murray, Inc., 212 So. 2d 906, 909 (Fla. 2d DCA 1968) (same). Accordingly, Affirmative Defenses Four and Five are insufficient as a matter of law. Reyher, 881 F. Supp. at 576 (...
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