Il Fornaio LLC v. Arthur J. Gallagher Risk Management Services
Il Fornaio (America) LLC v. Arthur J. Gallagher Risk Management Services, LLC erroneously sued as Arthur J. Gallagher & Co. Insurance Brokers of California, Inc.
- William Alsup
- 3:23-cv-04378
- U.S. District Court · Northern District of California
- 8
In Il Fornaio v. Gallagher, Judge Alsup granted plaintiff’s motion to strike defenses, allowing amendment of some.
Il Fornaio (America) LLC and Arthur J. Gallagher Risk Management Services, LLC; the order removed specified defenses from Gallagher’s answer, allowed Gallagher to amend seven of them, and barred amendment of seven others.
What happened
Il Fornaio (America) LLC sued Arthur J. Gallagher Risk Management Services, LLC, claiming Gallagher negligently failed to submit an employment-related insurance claim under the correct policy. Gallagher responded with several affirmative defenses, and Il Fornaio asked the court to strike them.
Judge Alsup found the motion timely and applied a standard requiring defenses to include enough supporting facts to make them plausible. He struck some defenses because they lacked factual support and others because they merely denied parts of Il Fornaio’s case, repeated another defense, or reserved a possible right to add defenses later.
In Il Fornaio (America) LLC v. Arthur J. Gallagher Risk Management Services, LLC, Judge William Alsup granted the motion to strike. Gallagher may amend the fifth, sixth, seventh, ninth, thirteenth, fourteenth, and fifteenth defenses by April 3, 2024; the first, third, fourth, tenth, eleventh, twelfth, and sixteenth defenses were struck without leave to amend.
The detailed version
- Il Fornaio LLC v. Arthur J. Gallagher Risk Management Services · No. 3:23-cv-04378
- William Alsup
- Mar. 20, 2024
Background
Il Fornaio (America) LLC sued its insurance broker, Arthur J. Gallagher Risk Management Services, LLC, alleging that Gallagher negligently failed to submit an employment-related claim under the “Private Edge Policy.” The claim arose from a female employee’s 2019 complaint to California’s Department of Fair Employment and Housing and the Equal Employment Opportunity Commission. Il Fornaio alleged that it instead tendered the claim under an “Argo policy,” which denied coverage because the events occurred before that policy period began. The parties also disputed whether Il Fornaio was a subsidiary covered by the Private Edge Policy.
After Gallagher answered the first amended complaint, Il Fornaio moved under Federal Rule of Civil Procedure 12(f) to strike Gallagher’s affirmative defenses. Rule 12(f) permits a court to remove an insufficient defense or redundant, immaterial, impertinent, or scandalous material from the pleadings.
Timeliness and pleading standard
The court rejected Gallagher’s argument that the motion was untimely. The motion responded to Gallagher’s answer to the amended complaint, filed December 26, 2023, and Il Fornaio filed the motion exactly 21 days later, as permitted by Rule 12(f)(2).
The court applied the plausibility standard from Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal to the affirmative defenses. Under that standard, a defense must include enough supporting facts to make it plausible, rather than merely stating a legal conclusion. The court also considered that a defendant has less time to investigate and prepare an answer than a plaintiff has to prepare a complaint.
Defenses lacking factual support
The court struck the fifth, sixth, and seventh defenses because they did not provide enough facts. The fifth alleged that Il Fornaio’s damages were caused by Il Fornaio’s negligence or acquiescence, without identifying who was responsible or explaining how. The sixth alleged that Il Fornaio was partly responsible for its non-economic damages but supplied no supporting facts. The seventh alleged that other parties caused the damages but did not identify those parties.
The court also struck the ninth defense, which alleged that Il Fornaio had failed to perform conditions required between the parties. Rule 9(c) requires a party denying that a condition precedent occurred to state the denial with particularity. The court found that Gallagher’s assertion lacked factual support.
The court further struck the thirteenth, fourteenth, and fifteenth defenses because they stated legal conclusions without factual support or a legal explanation sufficient to give fair notice.
The fifth, sixth, seventh, ninth, thirteenth, fourteenth, and fifteenth defenses were stricken with leave to amend. This means the order allowed Gallagher to revise and reassert those defenses.
Defenses improperly pleaded as affirmative defenses
The court struck the first and third defenses without leave to amend because they did not assert true affirmative defenses. Instead, they disputed elements that Il Fornaio would have to prove. The third defense stated that Gallagher had fully or substantially performed any obligations it owed.
The court also struck the tenth, eleventh, and twelfth defenses without leave to amend. Those defenses challenged injury or proximate cause, which the court treated as matters concerning Il Fornaio’s burden of proof rather than affirmative defenses.
The fourth defense, concerning an intervening and superseding cause, was stricken without leave to amend because it was redundant of the eleventh defense. The sixteenth defense, which reserved Gallagher’s ability to amend its answer and add other defenses after further investigation, was also stricken without leave to amend because it was redundant and immaterial and did not negate liability.
Disposition
Judge William Alsup granted Il Fornaio’s motion to strike Gallagher’s affirmative defenses. Leave to amend the fifth, sixth, seventh, ninth, thirteenth, fourteenth, and fifteenth defenses was granted, and Gallagher was ordered to assert amended affirmative defenses by April 3, 2024. The first, third, fourth, tenth, eleventh, twelfth, and sixteenth defenses were stricken without leave to amend.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.