Axis Capital, Inc. v. Continental Garage et al (2010)

MEMORANDUM OF DECISION

In this case the defendants filed a motion to strike several of the plaintiff's special defenses.   The basis of the motion as to several of these special defenses is that they fail to comply with the court's orders on a previous request to revise filed by the defendants.   It is claimed that in filing its amended special defenses plaintiff has added new allegations not responsive to the court's order.   It is also argued that paragraph 3 of the “Factual Background” “states an entirely new claim that was not a requested revision” and “it alleges facts pertaining to an agreement that predates the Restructure Agreement, which is the controlling document at issue in this case.”

No memorandum was attached to this self-styled motion to strike.   A motion to strike “must be accompanied” by a memorandum of law “pursuant to subsection (a) of PB § 10-42.”   In this case no supporting memorandum was filed until January 14, 2010.   The “motion to strike” was filed over two months before on November 3, 2009.   However, the court need not accept a party's characterization of what has been filed.   The Practice Book is not a straight jacket.   A motion to strike tests the legal sufficiency of a pleading such as a special defense, see PB § 10-39(5).   A “motion to strike” a special defense based on an alleged failure to comply with a court's ruling on a request to revise is simply that and has nothing to do with the legal sufficiency of the special defense.   Any other position would be odd, if one accepts the position of Horton & Knox in their commentary to PB § 10-35, dealing with requests to revise, to the effect that “this section may not be used to test substantial rights ․ Thus the testing of a legal claim under the guise of seeking the deletion of unnecessary allegations is not permitted,” vol. 1 of Conn. Practice Series, commentary to PB § 10-35 at page 518 (2010 edition).

(2)

The court will now try to address the arguments made in the “motion to strike” directed at the revised special defenses.

(1) The defendants claim in their response to the new special defenses to their counterclaim that paragraph 3 of the “Factual Background” “states an entirely new claim.”   That paragraph refers to numerous bounced checks issued by the defendant to the plaintiff.   Furthermore it references a “Finance Agreement” that predates the “Restructure Agreement” which is said to be the “controlling document at issue in this case.”   With respect to paragraphs 4 and 5 of the “motion to strike,” bounced check references in the new special defenses are also repeated in the first, second, third, fourth, fifth, and six special defenses.   The defendants argue that these references in the special defenses to the counterclaims “are immaterial and will only serve to confuse the issues and prejudice the jury against the defendant in this case.”

The admittedly broad warrant given to the plaintiffs to revise their special defenses can only go so far.   The appropriate ambit to these special defenses is the counterclaim itself.   A close reading of that document indicates that all its allegations and counts are based on the plaintiff's purported violation of the Restructure Agreement.   That bounced check episodes may have led to or even necessitated a Restructure Agreement is thus irrelevant to the claims advanced in each of the counts of the counterclaim.  (See par 4 and 6 of first count of counterclaim, repeated in all the following counts.)   At the very least reference to “bounced checks” appear to have nothing to do, even abstractly considered, with any count other than the unjust enrichment count.   Even as to that count, if we read paragraphs 3 through 6 it would appear that the alleged impropriety of the plaintiff's actions are based on its failure to comply with the Restructure agreement despite alleged payments by the defendant.   That prior to this agreement bounced checks were made with reference to the original finance agreement appears immaterial.   But since this issue was not fully explored in prior argument the court will not order deletion of bounced check references in the unjust enrichment count.   It may have led to the decision to repossess despite what might have been considered a minor breach of the Restructure Agreement by a failure to make a payment.

(2) Paragraph 6 of the defendant's motion argues that the plaintiff's reference in paragraph 16 of the First Special Defense be deleted.   In that paragraph of the new special defense the plaintiff states it is entitled to all remedies provided for in their agreements and under § 42a-9-601 of the UCC, the defendant argues this is improper because it had requested this be deleted and the plaintiff has failed to comply.

The Court has examined the October 19, 2009 transcript and it is replete with references by the court to the need to explicitly state the law on which the plaintiffs relied on in its special defenses.   That is exactly what the plaintiff did in specifically citing the just mentioned section of the UCC. The court will not order that this paragraph be deleted.

(3) As to paragraph 16 of the second special defense the plaintiff's position is protected by the allegations of paragraph 15 and the revision to paragraph 17.   Therefore paragraph 16 should be deleted as argumentative.

(4) As to paragraph 15 of the third special defense, in light of the refusal of the court to delete the reference to “bounced checks” in this special defense, this paragraph is not necessary for the plaintiff to advance its equitable defense claim of which the doctrine of unclean hands is a subset.

(5) As to the fifth and sixth special defenses the argument is made that certain of the paragraphs should be stricken because the plaintiff is in violation of the court's order for not revising these paragraphs.   But the court made no such specific order and in light of the October 19th discussion, in fact, these two special defenses make explicit reference to the legal theory relied upon which the court indicated should be the object of the revision.

Corradino, J.T.R.

Corradino, Thomas J., J.