Crescent Point Energy Corp. v. Tachyus Corporation

Background

Crescent Point moved to dismiss Tachyus’s counterclaim and strike Tachyus’s affirmative defenses. Tachyus asserted one counterclaim for breach of written contract. It alleged that Crescent Point agreed to a two-year engagement for $150,000 CDN per month, paid the monthly fee for the first seven months, and then stopped paying. Tachyus also alleged that Crescent Point owed a $510,000 CDN early-termination fee.

Monthly-fee counterclaim

Crescent Point argued that Tachyus had not alleged a duty to pay because the contract stated that undisputed fees were due within 45 days after Crescent Point received the applicable invoice. The court rejected that argument. Applying California law, the court held that the invoicing provision did not clearly state that issuing an invoice was a condition that had to occur before Crescent Point’s payment duty arose. The court therefore denied the motion to dismiss the counterclaim to the extent it was based on unpaid monthly fees.

Early-termination-fee counterclaim

The contract required an early-termination fee only if Crescent Point terminated the contract for convenience and not for cause before the term ended. The court found that Tachyus had not alleged that Crescent Point terminated the contract for any reason. Instead, Tachyus repeatedly alleged that Crescent Point never terminated the contract. The court granted the motion to dismiss the counterclaim to the extent it sought an early-termination fee. The opinion states that this dismissal would be with leave to amend.

Affirmative defenses

The court considered Crescent Point’s request to strike all 13 affirmative defenses. A motion to strike is a request to remove material from a pleading because it is insufficient, redundant, immaterial, impertinent, or scandalous.

The court struck the First, Fifth, Sixth, and Twelfth Defenses because they were not affirmative defenses. The First Defense asserted that Crescent Point failed to state a claim; the Fifth alleged that Crescent Point suffered no harm and would obtain a windfall; and the Twelfth alleged that the claimed damages were too remote and speculative. These defenses were stricken without prejudice to Tachyus raising the same matters as rebuttal to Crescent Point’s claims. The court did not strike the Fourth Defense, which alleged that Crescent Point breached the agreement by failing to make required payments, because it sought separate monetary relief rather than merely denying an element of Crescent Point’s claims.

For lack of fair notice, the court struck the Second Defense to the extent it relied on estoppel, unclean hands, in pari delicto, and waiver; the Eighth Defense; the Ninth Defense; and the Thirteenth Defense. Those defenses were stricken with leave to amend. The court found that the Third, Tenth, and Eleventh Defenses provided fair notice and did not strike them.

The court also struck the Seventh Defense without leave to amend. That defense asserted that Crescent Point sought excessive damages in violation of constitutional protections. The court explained that Crescent Point could not seek punitive damages for its contract claims, making the defense immaterial.

Disposition

Judge Maxine M. Chesney granted in part and denied in part Crescent Point’s motion to dismiss and strike. The court granted the motion as to the early-termination-fee portion of Tachyus’s counterclaim and struck the First, Second, Fifth, Sixth, Seventh, Eighth, Ninth, Twelfth, and Thirteenth Defenses. In all other respects, the motion was denied. Tachyus could file an amended counterclaim and amend the Second, Eighth, Ninth, and Thirteenth Defenses by July 22, 2022.