United States District Court, D. Minnesota
Kevin M. Lasser, Plaintiff,
American General Life Insurance Company, et al., Defendants.
REPORT AND RECOMMENDATION AND ORDER
LEO I. BRISBOIS, Magistrate Judge.
This matter comes before the undersigned United States Magistrate Judge upon Plaintiff's Motion for Judgment on the Pleadings, [Docket No. 19], and Plaintiff's Motion to Extend Time to Serve and File Amended Complaint and For Leave to File First Amended Complaint, [Docket No. 42]. The Honorable Michael J. Davis, Chief United States District Judge for the District of Minnesota, referred Plaintiff's Motion for Judgment on the Pleadings, [Docket No. 19], to the undersigned Magistrate Judge for report and recommendation, pursuant to 28 U.S.C. § 636(b)(1)(B). (Order of Referral [Docket No. 26]). The Undersigned heard argument on Plaintiff's motions on February 12, 2015. (Minute Entry [Docket No. 45]).
For reasons articulated herein, the Court recommends DENYING Plaintiff's Motion for Judgment on the Pleadings, [Docket No. 19]; and the Court GRANTS Plaintiff's Motion to Extend Time to Serve and File Amended Complaint and For Leave to File First Amended Complaint, [Docket No. 42].
Plaintiff Kevin M. Lasser ("Plaintiff") initiated the present declaratory judgment action in Minnesota state court on or about August 12, 2014, naming as Defendants American General Life Insurance Company ("American General") and Clara Lasser ("Defendant Lasser"). American General removed to the United States District Court for the District of Minnesota on September 2, 2014. (Notice of Removal [Docket No. 1]).
Plaintiff alleges that in 1999, Wanda Lasser, Plaintiff's former spouse, purchased a life insurance policy. (Compl. [Docket No. 1-1], ¶ 4). The policy named Plaintiff as the primary beneficiary and Defendant Lasser (Plaintiff's mother and Wanda Lasser's former mother-in-law) as the contingent beneficiary. (Id. ¶ 5). Wanda Lasser purchased the policy while married to Plaintiff; the couple divorced in 2012, but Plaintiff remained the primary beneficiary under the policy. (Id. ¶ 6).
Wanda Lasser died on April 26, 2014. (Id. ¶ 7). On June 25, 2014, an insurance servicer informed Plaintiff that the insurer (American General) intended to pay the proceeds of the life insurance policy to Defendant Lasser. (Id. ¶ 8). On August 12, 2014, Plaintiff initiated the present declaratory judgment action, "to obtain a determination as to whether the life insurance proceeds are payable to Plaintiff as the primary beneficiary on the policy." (Id. ¶ 9).
In her Answer to the Complaint, Defendant Lasser alleges that upon Plaintiff's divorce from Wanda in 2012, Minn. Stat. § 524.2-804 revoked Plaintiff's status as Wanda's primary beneficiary. (Answer [Docket No. 7], ¶ 7). Additionally, Defendant Lasser preserves a number of affirmative defenses, alleging that "Plaintiff's claims may be barred, in whole or in part, by... estoppel, duress, laches, release or waiver." (Id. ¶ 9). Defendant Lasser requests the Court deny judgment in Plaintiff's favor and declare "Clara Lasser is the proper beneficiary of the referenced life insurance policy[.]" (Id. at 2).
II. REPORT AND RECOMMENDATION: PLAINTIFF'S MOTION FOR JUDGMENT ON THE PLEADINGS, [DOCKET NO. 19]
Pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, Plaintiff moves the Court for an order (1) dismissing Defendant Lasser's affirmative defense of duress, pled on behalf of decedent Wanda Lasser, for lack of standing; (2) dismissing Defendant Lasser's affirmative defense of duress, pled on behalf of decedent Wanda Lasser, for failure to state a claim with sufficient particularity; and (3) granting Plaintiff judgment on the pleadings. (Pl.'s Mot. for Judgment on the Pleadings [Docket No. 19]).
In support of the present motion, Plaintiff argues that he is entitled to judgment on the pleadings because he is the primary beneficiary under Wanda Lasser's policy and because Minn. Stat. § 524.2-804 could not, upon the couple's divorce, retroactively revoke Plaintiff's status as the primary beneficiary. Plaintiff argues that application of Minn. Stat. § 524.2-804 to revoke Plaintiff's status as the primary beneficiary under Wanda Lasser's life insurance policy is unconstitutional, per Whirlpool Corp. v. Ritter, 929 F.2d 1318 (8th Cir. 1991). Additionally, Plaintiff argues that Defendant Lasser's affirmative defenses - specifically, duress - necessarily fail, as she pleads duress with insufficient specificity. In response, Defendant Lasser argues that Minn. Stat. § 524.2-804 did revoke Plaintiff's status as primary beneficiary under Wanda Lasser's policy. Defendant Lasser argues that "other federal courts and authoritative legal commentators" have "roundly criticized" the Eighth Circuit's holding in Whirlpool, and, accordingly, Defendant Lasser effectively argues that this Court should overturn the Eighth Circuit holding and deny Plaintiff judgment on the pleadings.
A. Standard of Review
When reviewing Rule 12(c) motions for judgment on the pleadings, courts "accept as true all facts [pled] by the non-moving party and grant all reasonable inferences from the pleadings in favor of the non-moving party." Faibisch v. Univ. of Minnesota, 304 F.3d 797, 803 (8th Cir. 2002) (quoting United States v. Any & All Radio Station Transmission Equip., 207 F.3d 458, 462 (8th Cir. 2000)); see also Nat'l Car Rental Sys., Inc. v. Computer Assocs. Int'l, Inc., 991 F.2d 426, 428 (8th Cir. 1993); Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). A court may enter judgment on the pleadings where no material issue of fact remains to be resolved and the movant is entitled to judgment as a matter of law. Faibisch, 304 F.3d at 803 (citing Any & All Radio, 207 F.3d at 462).
As a threshold matter, the Court recommends denying Plaintiff's Motion for Judgment on the Pleadings, [Docket No. 19], insofar as Plaintiff is essentially moving the Court for an order dismissing Defendant Lasser's affirmative defenses.
Federal Rule of Civil Procedure 8(c) states only that "a party must affirmatively state any avoidance or affirmative defense" in its responsive pleading. Fed.R.Civ.P. 8(c)(1). The plain language of Rule 8 does not require parties to plead affirmative defenses with any degree of particularity. Unlike affirmative claims for relief, a party need only state affirmative defenses in its responsive pleading; a party need not provide "a short and plain statement" demonstrating that the pleader is entitled to relief. C.f., Fed.R.Civ.P. 8(a), (c).
In light of the plain language of Rule 8, the Court finds that Iqbal/Twombly pleading standards do not apply to affirmative defenses. The Court acknowledges that a split exists among district courts in the Eighth Circuit on this particular issue,  but the Court finds the Honorable Patrick J. Schiltz's analysis in Wells Fargo & Co. v. United States, 750 F.Supp.2d 1049, 1051 (D. Minn. 2010), particularly informative and persuasive. First, as discussed above, nothing in the language of the Federal Rules of Civil Procedure even subtly suggests that a defendant must plead sufficient facts to establish the plausibility or viability of an affirmative defense. Id . An affirmative defense is neither a claim for affirmative relief nor governed by Rule 8(a)'s pleading
standard. Affirmative defenses preserve defenses to be explored throughout discovery and, eventually, tested on their merits come summary judgment and/or trial.
Second, affirmative claims for relief as are asserted by a plaintiff are procedurally distinct from affirmative defenses:
Typically, a plaintiff has months - often years - to investigate a claim before pleading that claim in federal court. By contrast, a defendant typically has 21 days to serve an answer. Whatever one thinks of Iqbal and Twombly, the "plausibility" requirement that they impose is more fairly imposed on plaintiffs who have years to investigate than on defendants who have 21 days.
Id. (internal citations omitted). Finally, as Judge Schiltz discusses, it is common practice in federal court to simply list affirmative defenses in one's answer. Id.
Significantly, and consistent with the foregoing discussion, the Eighth Circuit has explicitly held that affirmative defenses "need not be articulated with any rigorous degree of specificity" and that a party sufficiently pleads and preserves affirmative defenses via "bare assertions." Zotos v. Lindbergh Sch. Dist., 121 F.3d 356, 361 (8th Cir. 1997) (citations omitted); see also Wisland v. Admiral Beverage Corp., 119 F.3d 733, 737 (8th Cir. 1997) ("The rules do not require a party to plead every step of legal reasoning that may be raised in support of its affirmative defense; they only require a defendant to state in short and plain terms its defenses to a plaintiff's claims.").
A party sufficiently pleads and preserves an affirmative defense by simply identifying the defense in the party's responsive pleading. Once pled, the defendant bears the burden of proof on its affirmative defenses. "[A]s a defendant bears the burden of proof on an affirmative defense, it is normally not an appropriate basis upon which to grant a motion to dismiss or for judgment on the pleadings." Fry v. Accent Mktg. Servs., L.L.C., 2013 WL 2403669, at *4 (E.D. Mo. May 31, 2013).
Plaintiff's general arguments concerning the ultimate likely sufficiency (whether upon summary judgment or trial) of Defendant Lasser's affirmative defenses are premature, and Plaintiff's attempt to dismiss Defendant Lasser's affirmative defenses via the present Motion for Judgment on the Pleadings is procedurally and substantively inappropriate. See, e.g., Fleishour v. Stewart Title Guar. Co., 640 F.Supp.2d 1088, 1090 (E.D. Mo. 2009) ("Plaintiff has presented no evidence that these affirmative defenses are not sufficient as a matter of law.'... Defendants raise appropriate questions of law and fact for the Court to consider. While Plaintiff may desire that more facts be provided in Defendant's defenses, the pleading requirements under the Federal Rules simply do not require a statement of the facts necessary to support the defense.").
Plaintiff may challenge the substantive merits of Defendant Lasser's affirmative defenses at a later date. But for now, Plaintiff's Motion for Judgment on the Pleadings, [Docket No. 19], with respect to Plaintiff's request for relief regarding Defendant Lasser's affirmative defenses, is not the correct vehicle by which Plaintiff may attempt to obtain the relief he has sought by his Complaint. The mere fact that ...