United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND ORDER
F. ATLAS SENIOR UNITED STATES DISTRICT JUDGE
case is before the Court on Plaintiffs' Motion to Strike
Nine of Defendants' Affirmative Defenses (“Motion
to Strike”) [Doc. # 52]. Defendants filed an
Opposition [Doc. # 53], and Plaintiffs filed a Reply
[Doc. # 54]. Having reviewed the record and the applicable
legal authorities, the Court denies the
Motion to Strike, but requires Defendants to file an Amended
Answer in accordance with this Memorandum.
allege that in the fall of 2006, Plaintiff Moody National CI
Grapevine S, L.P. issued a confidential placement memorandum
regarding two hotel properties, a Residence Inn in Houston
and a Comfort Suites in Grapevine, Texas (the
“Project”). See Second Amended Complaint
[Doc. # 27], ¶ 25. In connection with the Project, some
of the Plaintiffs signed contracts containing broad
August 2010, the Project's original tenants-in-common
structure was converted to a Delaware Statutory Trust
allege that there were “continuing revenue generation
problems with the Project, ” which led to the sale of
the Project to MN TX II, LLC, an affiliate of the DST's
trustee. In connection with the potential sale, certain
Plaintiffs and all Defendants except TIC Texas Two 21, L.L.C.
entered into a Mutual Release by which they released all
claims and actions relating to the Project.
February 27, 2019, Plaintiffs filed this lawsuit, asserting
the Mutual Release as a basis to enjoin an arbitration
proceeding instituted by Defendants on February 1, 2019.
Plaintiffs also assert breach of contract claims based on the
Court determined that the enforceability of the Mutual
Release was an issue that required early resolution. The
Court, with input from counsel, entered a schedule for
discovery, motions, and mediation on that issue. See
Hearing Minutes and Order [Doc. # 50]. Motions for summary
judgment on the issue are due December 18, 2019.
September 4, 2019, Defendants filed their Original Answer
Regarding Enforceability of Plaintiffs' Purported Release
(“Answer”) [Doc. # 51]. In the Answer, Defendants
assert eleven affirmative defenses. See id.,
¶¶ 40-50. Plaintiffs filed a Motion to Strike nine
of those defenses. The Motion to Strike has been fully
briefed and is now ripe for decision.
APPLICABLE LEGAL STANDARD
responding to a pleading, a party must affirmatively state
any avoidance or affirmative defense . . ..”
Fed.R.Civ.P. (8)(c)(1). “A defendant must plead with
enough specificity or factual particularity to give the
plaintiff ‘fair notice' of the defense that is
being advanced.” LSREF2 Baron, L.L.C. v.
Tauch, 751 F.3d 394, 398 (5th Cir. 2014) (quotations and
citations omitted). “The ‘fair notice'
pleading requirement is met if the defendant sufficiently
articulated the defense so that the plaintiff was not a
victim of unfair surprise.” Woodfield v.
Bowman, 193 F.3d 354, 362 (5th Cir. 1999) (internal
quotations and citation omitted).
move pursuant to Rule 12(f) for an order striking nine of
Defendants affirmative defenses. Rule 12(f) authorizes a
court to “strike from a pleading an insufficient
defense or any redundant, immaterial, impertinent, or
scandalous matter.” Fed.R.Civ.P. 12(f). “Motions
to strike are disfavored and infrequently granted.”
U.S. v. Cushman & Wakefield, Inc., 275 F
.Supp.2d 763, 767 (N.D. Tex. 2002) (citing Augustus v.
Bd. of Pub. Instruction of Escambia Cty., Fla., 306 F.2d
862, 868 (5th Cir. 1962)). “Striking an affirmative
defense is warranted if it cannot, as a matter of law,
succeed under any circumstance.” United States v.
Renda, 709 F.3d 472, 479 (5th Cir. 2013).
move to strike the affirmative defenses of: (1) failure of
consideration; (2) estoppel; (3) failure to mitigate damages;
(4) unclean hands, waiver and laches; (5) fraud; (6) duress;
and (7) illegality. In the Opposition, Defendants reference,
and incorporate, the factual allegations in their Motion to
Dismiss [Doc. # 32]. Additionally, Defendants explain more
fully the basis for their ...