FREESTREAM AIRCRAFT USA LTD. v. CHOWDRY, No. 9:2016cv81232 - Document 160 (S.D. Fla. 2018)
Court Description: ORDER granting in part and denying in part 136 Plaintiff's Motion to Strike Defendant Ronni Chowdry's Affirmative Defenses. Defendant's third, fourth, sixth, and seventh affirmative defenses are STRICKEN. The first affirmative defens e is stricken without prejudice to Defendant amending the first affirmative defense within seven (7) business days from the date of this Order if Defendant has a good faith basis to do so. Signed by Magistrate Judge William Matthewman on 3/12/2018. (kza)
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FREESTREAM AIRCRAFT USA LTD. v. CHOWDRY Doc. 160 UNITED STATES DISTRICT COURT SO UTH ERN DISTRICT O F FLORID A CivilNo.16-cv-81232-M ATTHEW M AN FREESTREA M A IRCRA FT U SA LTD ., Plaintiff, FlLED i)y VS. ' D.C. MAq 12 2218 RON NICHOW DRY; ATLAS AVIATION LLC; A TLA S SA LES AN D LEA SIN G ,LLC; and ATLA S LU X UR Y JETS LLC, S>L z'i6 Lk/El( Nb r/7LDl ARi MqRE ' c. s. o=RoF rd6 b, i.-s h%r.pta B Defendants. / O RD ER G R AN TIN G IN PA RT A N D DEN Y IN G IN PA R T PLA IN TIFF'S M O TIO N TO STRJKE DEFENDANT RONNICH OW DRY 'S AFFIRM ATIVE DEFENSES lDE 1361 TH IS CAUSE is before the Courtupon Plaintiff, Freestream Aircraft USA Ltd.'s (dtplaintiff') Motion to Strike DefendantRonniChowdry's Aftirmative Defenses (çlM otion'') (DE 1361. Defendant,RonniChowdry (slDefendanf'),filed aresponse (DE 1451,and Plaintiff filedareply (DE 1461. Thematterisnow ripeforreview. TheCourthascarefully considered the filingsand attachm entsthereto,asw ellasthe entire docketin this case. BA C K G R O U N D Plaintiff filed its originalcom plaint in this case on July 11,2016. See D E 1. Plaintiff filed an Amended Complaint gDE 1091 on December 27,2017, with leave of Court.The A m ended Com plaint alleges piercing the corporate veil against D efendants Ronni Chowdry, AtlasAviation LLC,AtlasAviation Sales& Leasing LLC,and AtlasLuxury JetsLLC (Count 1);conversion againstDefendantsAtlasAviation,AtlasSales,and Chowdry (Count2);unjust em ichm ent against D efendants A tlas A viation,A tlas Sales, Chow dry, and Atlas Luxury Jets 1 Dockets.Justia.com (Count3);civiltheftinviolationofsection 772.11,FloridaStatutes,againstDefendantChowdry (Count4);and civiltheftin violation ofsection 812.014,Florida Statutes,againstDefendant Chowdry(Count5). (AmendedCompl.,DE 171. On January 5,2018,Defendantfiled aM otion toDism issAm ended Complaintand/orfor More Definite Statement@DE 1201. On the same date,Defendantalso filed his Answerand AffirmativeDefensestoAmended Complaint(DE 1211. Heassertedthefollowingaffirmative defenses' .unclean hands,lack ofstanding,failureto state acauseofaction,lack ofjurisdiction, and im properparty. Id M O TIO N .R ESPO N SE.A ND R EPLY M otion In the M otion,PlaintiffarguesthatD efendant's unclean hands affinnative defense should bestricken asitisinsuftkientasamatleroflaw,impertinent,andprejudicial. fDE 136atp.3). Plaintiffspecifically argueswith regard to theunclean handsdefense thatDefendanthasfailed to plead thatthere isany relationship between thealleged misconductand Plaintiffsclaim sorthat PlaintiffspurportedtaxevasioninjuredDefendant. f#.atpp.3-4. Plaintiffalsocontendsthat Defendant's unclean hand defense Strests on incom plete evidence...resulting in a m isleading portrayalofthe facts.'' 1d.atp.4. Plaintiffnextassertsthatthe undean handsdefense could only applyto the unjustemichmentclaim asitisan equitabledefense. 1d. Finally,Plaintiff arguesthatthedefensewouldprejudicePlaintiffandfurtherconfusetheissues. Id atpp.4-5. Plaintiff asserts that the rem aining defenses are not actually aftirmative defenses,but ratherare negative defenses thatshould be stricken. (DE 136 atp.51. Plaintiffmaintains failure to state a claim eannotbe properly asserted asan aftirm ative defense underthe relevant case law and that the rem aining defenses are tûnotbased on any additional set of facts that bar recovery notwithstanding Plaintiffs claim . All of these defenses turn on the question on w hether Plaintiff is the tl'ue ow ner of the Funds- which D efendant has already denied in his amended answer...orwhetherDefendantisthetruerecipientoftheFunds- also denied.'' Id at pp. 5-6. Plaintiff requests that the Court treat the purported defenses as llreiterations of Defendant'sdenials,and strikethem asredundant.'' 1d.atp.6. Response In response,Defendantarguesthatithasproperly asserted an unclean handsdefenseashe hasdem onstrated thatPlaintiffswrongdoing is directly related to the claim againstwhich itis assertedandDefendanthasshownthathewaspersonallyinjuredbyPlaintiff conduct. (DE 145 atp.41. Defendantspecifically assertsthatttthe action ofPlaintiffin causing the fundsto be transferred to ATLAS AVIATION to defraud theIRS isdirectly relatedto thePlaintiffsclaim of unjustenrichment.'' 1d atp.5. Defendantalsocontendsthathisinjuryisthatçlplaintiffseeksto hold ATLAS AVIATION liable forthe taxeson the consulting fee,while seeking to recoverthe m onies transferred to ATLAS AVIATION .'' f#. Defendant acknowledges that the unclean handsdefenseappliesonlytotheunjustenrichmentcount. 1d.atp.6. Finally,Defendantargues thatitdid notsubm itan incom plete exhibitto the Court. W ith regard to the rem aining defenses,Defendant argues thatthey are al1properly pled. (DE 145atp.7). DefendantmaintainsthatSlstanding,''evenwhenlabeledanaffinnativedefense, lishould notbe stricken when itputstheplaintiffand thecourton noticeofcertain issuesthatthe defendant intends to assert against the plaintiff s claim .'' 1d Defendant next contends that failure to state a case of action upon w hich relief m ay be granted can be raised by w ay of an affinnative defense. 1d.at p. Defendant similarly argues that lack of subject matter jurisdictioncanberaisedasanaftirmativedefenseandthatitççmayonlybestrickenwhenthereare 3 multipleoralternativtbasesforthecourt'sjurisdidion overthematterorwherenorelationship exists betw een a defense and the party'sclaim .'' 1d. atp.11. Finally,Defendantassertsthatthe tsimproperparty''aftirmativedefense isproperly pled because itsetsforth in detailDefendant's ûtpositionthatthem oney in question wastransferredtoATLA SAVIATION ,nottotheDefendant, andthusthePlaintiffsclaim sagainsttheDefendantshould failattxial.'' 1d. atp.12. Inreply,Plaintiffagain arguesthattheaffirmativedefenseoftmclean handsisnotproperly pledbecausedçDefendantisaccused,in thesingle-counttowhichthisdefensecould beraised,with unjustlyenrichinghimselfwithPlaintiffsFunds. HisbaselessaccusationthatPlaintiffintended adifferentwrong,oftax evasion,isnotthesnmekindofconduct.'' (DE 146atp.21. Plaintiff alsocontendsthatDefendanthasnottûpledfactsdemonstratinghisinjuryfrom Plaintiffsalleged attem ptattax evasion.'' Plaintiffm aintains thatçlthe Courtshould notafford D efendant an opportunity to am end hisdefensebecauseDefendantfrustrated Plaintiffseffortsto discovery his purported tax evasion scheme theory athisdeposition.'' Id.atp.3. Plaintiffnextassertsthattr efendantdoesnotdispute the factthathe hasim properly listed m ultiple redundant denials under the caption tAftirm ative D efenses,' but instead rehashes the argumentsraised in his motion to dism issthe am ended com plaintwith respectto each ofthese negative defenses.'' (DE 146 at p. 4). Plaintiff further argues that Defendant cannot itsim ultaneously adm itthe essentialfactsofPlaintiffscom plaint specifically thatPlaintiffistrue ow nerofthe Funds- w hile also alleging defensesthatrely on Plaintiffnotbeing the true ow nerof theFunds.'' 1d. PlaintiffcontendsthatDefendantwillnotbeprejudicedbytheCourtstrikingthe defenses. 1d.atpp.4-5. 4 ANALYSIS GeneralApplicable Law FederalRuleofCivilProcedure12(9 providesthataçtcourtmaystrikefrom apleadingany redundant,im m aterial,im pertinent,or scandalous m atter.'' Fed.R . Ci v.P.1249. Courtshave held thata defense istiinsuftscientas a m atterof1aw if,on the face ofthe pleadings,itis patently frivolous...or ifit is clearly invalid as a m atter of law .'' A nchor Hocking Corp. v.Jacksonville Elec.Auth.,419F.Supp.992,1000(M .D.Fla.lg76ltcitationsomitted). %1Anaffrmativedefense isone thatadm itsto the complaint,butavoids liability,wholly orpartly,by new allegationsof excuse,justiûcation,orothernegatingmatters.''Adamsv.JumpstartWirelessCorp.,294F.R.D. 668,671(S.D.Fla.2013)(citingRoyalPalm Sav.Ass' nv.PineTraceCorp.,716F.Supp.1416, 1420 (M .D.Fla.1989)). ç1A defensethatsimply pointsouta defectorlack ofevidencein the plaintiffscase is notan affirmative defense.'' Id (citingFlav-o-Rich,Inc.v.Rawson Food Serm,Inc.(1nreRawsonFood Serv.,Inc.4,846F.2d 1343,1349(11th Cir.1988)). M otionsto strike are generally disfavored and tiw illusually be denied unlessthe allegationshave no possible relation to the controversy and may cause prejudice to one of the parties.'' Carlson Corp./southeastv.School#(fofseminoleCt/p zn/y,778F.Supp.518,5l9(M .D.Fla.1991). The U nclean H ands A ffirm ative Defense D efendant'sfirstaffirm ative defense isunclean hands. Defendanthas pled as follow s: Plaintiffs claims are barred by the doctrine ofunclean hands. Plaintiffand/or Tyrusutilized theoperating accountofATLA S AVIATION,to perpetrate a fraud on the lRS to avoidpayingtaxes. Thewirecopy showingthetransferofftmdsin question is attached as EX H IBIT A . The em ail chain betw een A TLA S AV IATION and Tyrus,including the W 9 thatw as requested by Tyrus,and issued to ATLA S AVIATION,is attached as EXH IBIT B. Thereaher,in connection with filing its2013 tax return,Tyrus subm itted the infonnation gathered from the W 9 thatitissued to ATLAS AVIATION,to the IRS,representing to the Federal Governm ent,thatit paid ATLA S A V IA TION ,a consulting fee in the am ount of 5 $2,580,950.00. See EXHIBIT C. Thus,Tynls requested the W 9 from ATLA S AVIATION,not from the Plaintiff,and subm itted thatinformation to the IRS, representingthatthemoney wasdueandpayabletoATLAS AVIATION,nottbthe Plaintiff. To wit,the Plaintiffand/orTyrus W ings,Inc.,also used bank accounts of other parties,including, but not lim ited to,W hite M ountain Jets, LLC, a com pany ow ned by one ofPlaintiff s agents,Jnm es M ose,to evade paying taxesto theIRS. TheDefendantiswithoutknowledgeastothefullextentofPlaintiffstax evasion schem e as discovery is still ongoing. At a11 tim es m aterial hereto, it is believedthatTyrusW ings,lnc.,wasacting atthebehestofRebecca Posili-cilli. gDE 121atpp.7-81. ThepartiesagreethatthisaffinnativedefenseonlyappliestoPlaintiffsunjustenrichment cause ofthe action. Plaintiffalleges the following in the unjust enrichment section ofthe Amended Complaint(count3): 97. Bytheacts,practices,conductsand om issionsherein-alleged,AtlasAviation, Atlas Sales,Atlas Luxury,and Chowdry,individually or through his alter ego entities,haveimproperly and unjustly obtained property and assetsthatproperly belong to Plaintiffand which were misappropriated by the illegalconductalleged herein. 98. D efendants obtained thePlaintiffsproperty and assetsundercirctunstancesin which it is notjust,equitable,or conscionable for Defendants to retain the Plaintiff s property and assets. A s a consequence of the foregoing,each of the Defendants...hasbeenunjustlyenriched. (DE 109atp.161. In orderfora defendantto lisuccessfully availitselfofthe doctrine ofunclean hands,it mustsatisfytwo requirem ents.'' Calloway v.PartnersNat.Hea1th Plans,986 F.2d 446,450-51 (11th Cir. 1993). First,the defendantmust ltdemonstrate thatthe plaintiff's wrongdoing is directly related to the claim againstwhich itisasserted.'' f#.(citingKeystone Driller Co.v. GeneralExcavatorCo.,290U.S.240,245,54 S.Ct.146,147-48,78L.Ed.293(1933). ççgM?le're talking really directly related ...Itis,in essence,the reason forthe law suit.'' ElofHanssonPaper drBd,Inc.v.CalderasNo.11-20495-CV,2012 W L 12865853,at*6 (S.D.Fla.Apr.26,2012) 6 (quotingGastaldiv.SunvestResortCmtys.,LC,No.08-62076,2010W L 457243,at*9(S.D.Fla. Feb.3,2010)).Second,even ifthe plaintiff's wrongdoing is directly related,the Stplaintiffs wrongdoingdoesnotbarreliefunlessthedefendantcan show thatitwaspersonallyinjuredbyher conduct.''Calloway,986 F.2d at450-51 (citingM itchellBros.Film Group v.Cinema Adult Theater,604F.2d852,863(5thCir.1979),cert.denied,445U.S.917,100S.Ct.1277,63L.Ed.2d 601(1980(9. Here,Plaintiffsalleged m ongdoing iscomm ittingtax fraud with theIRS,andtheclaim at issue isunjustenrichment- Defendant's misappropriation ofPlaintiffs fundsand then tmjust retention ofthe funds. TheCourtnotesthatDefendant'sargum entsin hisresponseto Plaintiff's motiontostrikecontainedmuchmoredetailabouttheunjustenrichmentaftirmativedefensethan doesthe affirm ativedefensecontainsascurrently written. Defendanthasnotsufficiently shown in thefirstaffinuativedefense,ascurrentlyw ritlen,how Plaintiffsalleged wrongdoing isdiredly related to the unjustenrichmentclaim. Additionally,the CourtfindsthatDefendanthas not sufficiently shown in theactualwording oftheaffirmativedefensehow Defendantwaspersonally injured by Plaintiffs conduct. The Courtshallstrike the unclean handsaffirmative defense withoutprejudicetoDefendantamendingthedefenseifhebelievesthatthereisagoodfaithbasis to am end the affinnative defense so thatitcom pliesw ith the relevantcase law . TheFailureto State aCauseofAction Affirm ativeDefense Defendant'sthird,fourth,and seventh affirmative defensesallege failure to state ofcause ofaction. gDE 121atpp.8-101. TheCourtagreeswith Plaintiffthatthesepurported defenses are sim ply reiterations of Defendant's denials. Therefore,the Courtfinds thatthese defenses should be stricken as redundant. Scc,e.g.,Aidone v.N ationw ide Auto Guard, L.L.C.,295 F.R.D . 658,661-62 (S.D.Fla.2013), .fima v.Heng Xian,*662Inc.,No.09-61422-C1V,2009 W L 7 4906374,at* 1 (S.D.FIa.Dec.18,2009);Vallesillo v.Remaca Truck Repairs,Inc.,No.09807l4-ClV,2009W L 4807397,at*4 (S.D.FIa.Dec.4,2009)). Moreover,theCourtpreviously denied Defendant'sm otion to dismiss,which included a1loftheargumentsasserted byDefendant in the third, fourth, and seventh affirm ative defenses. See DE 157. A ccordingly, theseaffirm ativedefensesare clearly invalid asa matteroflaw . See GrovenorHouse, L.L.C.v. E.1.Du PontD e Nem oursAnd Co.,N o.09-21698-C1V ,2010 W L 3212066, at*4(S. D.Fla.Aug. 12,2010). Thus,theCourtwillstrikethethird,fourth,and seventhaffirmativedefenses. The Lack ofStanding and Lack ofJurisdiction A ftinnative D efenses Defendant'shaspledbothlackofstandingandlack ofjlzrisdictionasaffirmativedefenses. SeeDE 121. Laekofstanding isaSjurisdictionaldefenseandthusmayberaised atanytimein the litigation.'' Ram narine v.RG Grp.,Inc.,N o.12-80264-C1V ,2012 W L 2735340, at*3(S. D. Fla.July9,2012)(citingFloridaAss'nofMed.Equip.Dealersv.Apjèl,194F.3d1227,1230(11th Cir.1999)). FederalRule ofCivilProcedure 12(b)statesthatçigelvery defenseto a claim for reliefin any pleading m ustbe asserted in the responsive pleading ifone is required. Buta party mayassertthefollowingdefensesbymotion.''Fed.R.Civ.P.12(b). Therefore,theRuledoesnot require that Defendant raise this defense by m otion as opposed to a responsive pleading. Ramnarine,2012 W L 2735340,at*3. The same logic would apply to the lack ofjurisdiction affirm ative defense. TheCourthasreviewed the second and fifth affirmative defensesand finds thatthey have been pled with suffcientdetails. Thus,the second and fifth affinnative defenses shallnotbe stricken. The lm properParty Aftirm ative D efense ln the sixth affirmative defense,Defendant allegesthathe isthe ltimproperparty to be nam ed to this lawsuitbecause the f'unds allegedly transferred w ere transferred to a corporate 8 accountforA TLA S AV IA TION ,LLC,which isand w as a California lim ited liability com pany at thetime ofthe alleged transfer.'' gDE 121atp.101. TheCourttindsthatthesix affinuative defenseshould bestricken asitsim ply pointsoutadefectorlack ofevidencein Plaintiff scaseand isaredundantreiteration ofDefendant'sdenials. Based on the foregoing, it is hereby O R DE RED AN D A D JU D G ED that Plaintiff s M otionto StrikeDefendantRolmiChowdry'sAffinnativeDefenses(DE 1361isGRANTED IN PA RT A N D DEN IED IN PA R T. D efendant's third, fourth, sixth, and seventh affirm ative defensesare STRICKEN . TheM otion isdenied asto the second and fihh affinnative defenses; they are sufficientas a matteroflaw . Finally,the M otion isgranted asto the firstaffinnative defense; however,the first affirmative defense is stricken without prejudice to Defendant amendingthefirstaffinnativedefensewithinseven(7)businessdaysfrom thedateofthisOrderif Defendanthasagood faith basisto do so. D NE and ORDERED in ChambersatW estPalm Beach,Palm Beach County,Florida, s/W thi dfyofMarch, 2018. (' , W ILLIAM M A TTH E AN U nited StatesM agistrate Judge 9
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