Pujals v. Garcia
| Citation | 777 F.Supp.2d 1322 |
| Decision Date | 28 March 2011 |
| Docket Number | Case No. 10–22990–CIV. |
| Parties | Eduardo Antonio Fernandez PUJALS, on behalf of EL REY DE LOS HABANOS, INC., Plaintiff,v.Jose GARCIA, Jaime Garcia, Janny Garcia, My Father Cigars, Inc., El Rey De Los Habanos, Inc., Defendants. |
| Court | U.S. District Court — Southern District of Florida |
OPINION TEXT STARTS HERE
Jorge David Guttman, Jose Manuel Ferrer, Bilzin, Sumberg, Baena, Price & Axelrod, LLP, Miami, FL, for Plaintiff.Omar Ortega, Dorta & Ortega PA, Coral Gables, FL, for Defendants.
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION TO STRIKE AFFIRMATIVE DEFENSES
THIS CAUSE is before the Court upon Plaintiff's Motion to Strike Defendants' Amended Affirmative Defenses (DE # 23), filed December 6, 2010. The Court has been fully briefed on the matter.1
This is a shareholder derivative action. (DE # 1). Plaintiff Pujals is a shareholder and director of El Rey de los Habanos, Inc. (“El Rey”), a corporation that manufactures and sells cigars. Id. ¶ 17. The individual Defendants, Jose Garcia, Jaime Garcia, and Janny Garcia, are officers and directors of El Rey, who allegedly created a second corporation, My Father Cigars, Inc. (“MFC”), to complete with El Rey. Id. ¶ 20, 21, 31, 32. The individual defendants allegedly unlawfully transferred trademarks belonging to El Rey to MFC in order to usurp El Rey's business relationships. Id. ¶ 31. MFC is also named as a defendant in this action. (DE # 1).
Plaintiff's Complaint alleges six causes of action: breach of fiduciary duties, conversion, tortious interference with advantageous business relationships, civil conspiracy, aiding and abetting breaches of fiduciary duties, and ultra vires. Id. In response, Defendants jointly filed an Answer and Affirmative Defenses (DE # 12), and later filed Amended Affirmative Defenses. (DE # 20). Plaintiff moves to strike all thirteen of Defendants' Affirmative Defenses on the ground that they are legally deficient as a matter of law. (DE # 23).
“An affirmative defense is one that admits to the complaint, but avoids liability, wholly or partly, by new allegations of excuse, justification or other negating matter.” Royal Palm Sav. Ass'n v. Pine Trace Corp., 716 F.Supp. 1416, 1420 (M.D.Fla.1989) (quoting Fla. East Coast Railway Co. v. Peters, 72 Fla. 311, 73 So. 151 (1916)). Under Federal Rule of Civil Procedure 12(f), “[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). “Affirmative defenses are insufficient as a matter of law if they do not meet the general pleading requirements of Rule 8(a) of the Federal Rule of Civil Procedure, which requires ‘a short and plain statement’ of the defense.” Mid–Continent Casualty Co. v. Active Drywall South, Inc., 765 F.Supp.2d 1360, 1361, 2011 WL 679850 *1 (S.D.Fla.2011) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). An affirmative defense may also be stricken as insufficient if: “(1) on the face of the pleadings, it is patently frivolous, or (2) it is clearly invalid as a matter of law.” Blount v. Blue Cross and Blue Shield of Florida, Inc., Case No. 3:10–cv–1151–J–34MCR, 2011 WL 672450 (M.D.Fla. Feb. 17, 2011). The striking of affirmative defenses is a “drastic remedy” generally disfavored by courts. Augustus v. Bd. of Public Instruction of Escambia County, 306 F.2d 862, 868 (5th Cir.1962); 2 see also Blount, 2011 WL 672450 at *1 ().
Defendants assert multiple affirmative defenses to each of the six counts in the Complaint, and further assert seven additional affirmative defenses to the Complaint as a whole. The Court will address each in turn.
A. Affirmative Defenses to Count I: Breach of Fiduciary Duty
Defendants allege, “Plaintiff's claim for breach of fiduciary duty is barred because the parties to this action conducted business in an arm's length transaction in which there was no duty to protect the other party or disclose facts which Plaintiff could have discovered by its own diligence.” (DE # 20–1 at 1). Defendants further assert, “Plaintiff has failed to state a cause of action against the Defendants for the breach of duty owed to El Rey [because] no act or actions by any of the Defendants were precluded by agreement, either oral or written.” Id. at 2.
The first defense, that the parties conducted business at arm's length, is essentially a denial of the allegations in the Complaint that Defendants were officers and directors of El Rey which owed any fiduciary duty. Existence of a duty is part of Plaintiff's prima facie case for breach of fiduciary duty, and “[a] defense which points out a defect in the Plaintiff's prima facie case is not an affirmative defense.” In re Rawson Food Serv. Inc., 846 F.2d 1343, 1349 (11th Cir.1989). Nonetheless, “the proper remedy is not [to] strike the claim, but rather to treat it as a specific denial.” CI Int'l Fuels, LTDA v. Helm Bank, S.A., Case No. 10–20357–CIV, 2010 WL 3368658 *2 (S.D.Fla. Aug. 24, 2010) (citation omitted). Accordingly, the motion to strike this defense is denied and it shall be treated as a specific denial.
Plaintiff argues the second affirmative defense to Count I, failure to state a claim because none of Defendant's acts were prohibited by any agreement between the parties, relies on inapplicable legal concepts. Plaintiff argues that the fiduciary duties imposed on corporate officers and directors arises solely from the existence of the relationship between the officer or director and the corporation, and the existence of an oral or written agreement is therefore irrelevant. See FDIC v. Stahl, 840 F.Supp. 124, 126 (S.D.Fla.1993) (). The existence of an agreement would only bear on the case if Defendants are not directors or officers, and do not have a relationship with the corporation giving automatically rise to fiduciary duties. In accordance with the principles outlined above, the Court will again treat this defense as a specific denial of the allegation that Defendants are corporate officers or directors, and deny the motion to strike.
Plaintiff's Complaint alleges Defendants converted certain trademarks owned by El Rey by transferring them, without authorization, to MFC. (DE # 1 ¶¶ 32–34). As affirmative defenses, Defendants state that the trademarks were never the property of El Rey, and they were never created or developed by El Rey. (DE # 20–1 at 3). Defendants concede in their Response that this defense simply points out a defect in Plaintiff's prima facie case: “Defendants assert that Plaintiff has failed to meet the prima facie elements of conversion because the Plaintiff has never had the right to possess the property that is alleged to have been converted.” (DE # 24 at 3). Accordingly, the Court treats this defense as a denial, and the motion to strike is denied.
Plaintiff alleges that Defendants interfered with El Rey's advantageous business relationships with customers by soliciting and obtaining business from El Rey's customers that would have otherwise gone to El Rey. (DE # 1 ¶¶ 50–51). Specifically, Plaintiff alleges Defendants have usurped many of El Rey's “private label” business customers.3 As affirmative defenses, Defendants assert that Plaintiff has failed to state a cause of action because he has failed to allege that the interference was intentional, which is one of the elements of the tort. (DE # 20–1 at 3). Defendants also state that El Rey continues to manufacture its private labels, and the business has thus not been interfered with. Id. These defenses simply point out a defect in Plaintiff's prima facie case, and will be treated as denials. The motion to strike is denied.
Defendant further alleges that Plaintiff has failed to state a cause of action because the private labels are owned by private companies other than El Rey, and El Rey therefore “has no specific property interest in the private labels it manufactures.” (DE # 20–1 at 3). However, whether El Rey had a property interest in the private labels is irrelevant. To state a claim for tortious interference, a plaintiff need only allege existence of a business relationship. Salit v. Ruden, McClosky, Smith, Schuster & Russell, P.A., 742 So.2d 381, 385 (Fla. 4th DCA 1999). There is no requirement that a plaintiff allege a “specific property interest” in property related to the business relationship. See id. “A motion to strike may be granted with regard to a defense, or parts of a defense, that can have no possible bearing upon the subject matter of the litigation.” Automated Transaction Corp. v. Bill Me Later, Inc., Case No. 09–61903–CIV, 2010 WL 3419282 *4 (S.D.Fla. Aug. 27, 2010) (quoting Craig Funeral Home, Inc. v. State Farm Mutual Automobile Ins. Co., 254 F.2d 569, 572 (5th Cir.1958)). El Rey's lack of a property interest in the private labels manufactured for other companies “can have no possible bearing” on this case, and this defense is stricken.
Defendants also argue a party may not be charged with interference with its own contract. (DE # 20–1 at 5). However, Plaintiff alleges Defendants interfered not with their own business relationships, but with the relationships of El Rey. Accordingly, this defense similarly has no bearing on the case, and is stricken.
Finally, Defendants state as a defense that an action for tortious interference with advantageous business relationships will not lie where the interference is with a contract at will. (DE # 20–1 at 5). However, Defenda...
To continue reading
Request your trial
- N.J. Carpenters Pension Fund v. Hous. Auth. & Urban Redevelopment Agency of Atl. City
- Hassoun v. Reliastar Life Ins. Co.
- United States v. Meyer
- Honus Wagner Co. v. Luminary Grp. LLC