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Mosser v. Aetna Life Insurance Co.

United States District Court, E.D. Texas, Sherman Division

March 28, 2018





         Came on for consideration the report of the United States Magistrate Judge in this action, this matter having been heretofore referred to the Magistrate Judge pursuant to 28 U.S.C. § 636. On March 9, 2017, the report of the Magistrate Judge (the “Report”) (Dkt. #278) was entered containing proposed findings of fact and recommendations that Plaintiff Nicholas D. Mosser's (“Plaintiff”) Motion to Strike Aetna Life Insurance Company's Affirmative Defenses (the “Motion to Strike”) (Dkt. #193) be denied.

         Plaintiff filed objections to the report (the “Objections”) (Dkt. #280). The Court has made a de novo review of the objections raised by Plaintiff and is of the opinion that the findings and conclusions of the Magistrate Judge are correct and the objections are without merit as to the ultimate findings of the Magistrate Judge. The Court hereby adopts the findings and conclusions of the Magistrate Judge as the findings and conclusions of the Court.

         Plaintiff seeks to strike the following affirmative defenses (the “Affirmative Defenses”) asserted by Aetna: (1) First and Nineteenth Affirmative Defenses (failure to state a claim upon which relief can be granted); (2) Third Affirmative Defense (good faith and lawful business reasons); (3) Eighth Affirmative Defense (standing); (4) Fifteenth Affirmative Defense (agency); (5) Seventeenth Affirmative Defense (actual knowledge and/or negligence); and (6) Twenty-first Affirmative Defense (reservation of rights). See Dkt. 193.

         Plaintiff's first point of error is that the Magistrate Judge incorrectly applied federal law, rather than state law, in her analysis of the sufficiency of Aetna's First and Nineteenth Affirmative Defenses, failure to state a claim. Plaintiff appears to create a dispute where none exists. To the extent that Plaintiff suggests the Magistrate Judge failed to apply the proper pleading standards in her analysis, Plaintiff is wrong.

         In diversity cases, federal courts apply state substantive law and federal procedural law, Hanna v. Plumer, 380 U.S. 460, 466-67 (1965). Traditionally, Texas courts have applied a pleading standard that is more liberal than the federal pleading standard, upholding a petition so long as it provides “fair notice of the claim involved.” Tex.R.Civ.P. 45(b). In March 2013, however, the Texas Supreme Court adopted Rule 91a of the Texas Rules of Civil Procedure, which provides in pertinent part:

[A] party may move to dismiss a cause of action on the grounds that it has no basis in law or fact. A cause of action has no basis in the law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought. A cause of action has no basis in fact if no reasonable person could believe the facts pleaded.

Tex. R. Civ. P. 91a.1 While not identical to the Rule 12(b)(6) standard, the Texas Courts of Appeals have interpreted Rule 91a as essentially calling for a Rule 12(b)(6)-type analysis, and have relied on the 12(b)(6) case law in applying Rule 91a. See Linron Properties, Ltd. v. Wausau Underwriters Ins. Co., 2015 WL 3755071, at *2-3 (N.D. Tex. 2015) (citing Wooley v. Schaffer, 447 S.W.3d 71, 76 (Tex. App.-Houston [14th Dist.] 2014), reh'g overruled (Oct. 9, 2014);, LLC v. Toups, 429 S.W.3d 752, 754 (Tex. App.-Beaumont 2014), review denied (Nov. 21, 2014)).

         Based on the foregoing, there is no credible argument that the Magistrate Judge applied the incorrect standard. Furthermore, the Magistrate Judge agreed with Plaintiff that failure to state a claim is not an affirmative defense, but declined to strike those defenses. See Dkt. #278 at 5. Thus, it appears that Plaintiff disagrees not with the analysis, but rather with the Magistrate Judge's conclusion. This does not constitute a basis for error. The Magistrate Judge properly declined to strike Aetna's First Affirmative Defense. The Magistrate Judge noted that a failure to state a claim defense, although commonly pleaded in an answer because Federal Rule 12(h)(2) allows it, is not an affirmative defense. Dkt. #278 at 5 (citing Kleppinger v. Tex. Dep't of Transp., 2012 WL 12893653, at *9 (S.D. Tex. 2012) (collecting cases)). Although not technically an affirmative defense, the failure to state a claim defense may be treated as such. See Lebouef v. Island Operating Co., Inc., 342 Fed.App'x. 983, 984- 85 (5th Cir. 2009).

         Additionally, the defense raises no risk of unfair surprise because Plaintiff has sufficient notice of what Aetna's assertion of failure to state a claim requires of him-“that the ‘plain statement' possess[es] enough heft to ‘sho[w] that the pleader is entitled to relief.'” Twombly, 550 U.S. 544, 557, 127 S.Ct. 1955 (2007) (citing Fed.R.Civ.P. 8(a)(2)); see also Rogers v. McDorman, 521 F.3d 381, 385 (5th Cir. 2008). Furthermore, striking the defense from Aetna's answer would be pointless because Plaintiff is not at risk of prejudicial harm. See Joe Hand Promotions, Inc. v. Izalco, Inc., 2017 WL 3130581, at *1 (S.D. Tex. 2017) (citing Brown & Williamson Tobacco Corp. v. United States, 201 F.2d 819, 822 (6th Cir. 1953)).

         Accordingly, the Court finds no error in the Magistrate Judge's conclusion that the motion to strike Aetna's failure to state a claim defense should be denied, and Plaintiff's Objection is OVERRULED.

         The Magistrate Judge also properly denied Aetna's Third Affirmative Defense explaining that “while mislabeled, [it] informed both Plaintiff and the Court of facts Aetna intends to offer in response to the elements of Plaintiff's case, ” and therefore, should not be stricken. Dkt. #278 at 6. As the Magistrate Judge noted, Plaintiff has been given fair notice here of the defense being advanced by Aetna. Id. (citing LSREF2 Baron, L.L.C. v. Tauch, 751 F.3d 394, 398 (5th Cir. 2014) (internal citation omitted) (“A district court has discretion to determine whether the party against whom the defense was raised suffered prejudice or unfair surprise as a result of the delay.”)). The Court, therefore, finds no error, and this Objection is likewise OVERRULED.

         Aetna's Eighth Affirmative Defense alleges Plaintiff lacks standing. Plaintiff takes issue with the Magistrate Judge's reliance on Muschong v. Millennium Physician Grp., LLC, 2014 WL 3341142, at *3 (M.D. Fla. July 8, 2014), an unpublished case from the Middle District of Florida, for the proposition that a mistakenly labeled “lack of standing” affirmative defense, can be treated as a specific denial, rather than stricken under Rule 12(f). See Dkt. #280 at 5. As explained below, the Court finds no error in the Magistrate Judge's ...

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