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Troung v. Garden View Townhomes LLC

United States District Court, D. Arizona

January 8, 2020

Shannon Troung, Plaintiff,
v.
Garden View Townhomes LLC, et al., Defendants.

          ORDER

          Douglas L. Rayes United States District Judge

         Before the Court are Plaintiff's motion to dismiss Mr. Janowiak's counterclaims for lack of jurisdiction (Doc. 11) and motion to strike Defendants' affirmative defenses 2-4 (Doc. 19), which are fully briefed.[1] For the reasons explained below, the Court will grant Plaintiff's motion to dismiss and grant in part Plaintiff's motion to strike.

         I. Background

         Plaintiff worked as a property manager at Defendant Garden View Townhomes, LLC (“Garden View”) from approximately May 1, 2015 until September 20, 2019. (Doc. 26 at 2.) On October 14, 2019, Plaintiff filed a complaint against Garden View and Franciszek Janowiak, Garden View's owner and manager, that asserts claims for violation of the Fair Labor Standards Act (“FLSA”) and A.R.S. §§ 23-362 - 23-364 stemming from Defendants' alleged failure to pay her minimum wage or overtime wages during her employment. (Doc. 1.) On November 8, 2019, Defendants filed an answer to Plaintiff's complaint. (Doc. 9.) The same day, Mr. Janowiak asserted counterclaims against Plaintiff and additional counterdefendants for conversion, unjust enrichment, and violations of A.R.S. § 13-2314.04 arising from an alleged scheme in which Plaintiff impersonated Mr. Janowiak and used his credit accounts to make purchases and to obtain cash advances on behalf of herself and the other co-counterdefendants. (Doc. 10.) On November 11, 2019, Plaintiff filed a motion to dismiss Mr. Janowiak's counterclaims for lack of subject matter jurisdiction, arguing that the counterclaims do not form part of the same case or controversy necessary for the Court to exercise supplemental jurisdiction. (Doc. 11.) On November 26, 2019, Defendants filed an amended answer to Plaintiff's complaint, which amended Defendants' affirmative defenses to include estoppel, setoff, and unclean hands defenses based on Plaintiff's alleged credit fraud scheme. (Doc. 18.) On December 3, 2019, Plaintiff filed a motion to strike Defendants' affirmative defenses 2-4. (Doc. 19.) On December 13, 2019, Plaintiff filed an amended complaint, adding Mr. Janowiak's spouse, Elzbieta Janowiak, as a Defendant. (Doc. 26.) On December 23, 2019, Defendants filed an answer to Plaintiff's amended complaint, which asserts identical affirmative defenses 2-4. (Doc. 32.) The motions are now ripe.

         II. Legal Standards

         A. Counterclaims

         In certain instances, federal courts may maintain supplemental jurisdiction over counterclaims that have no other basis for jurisdiction. 28 U.S.C. § 1367. Particularly, “a court has jurisdiction over state law claims that are so related to claims brought under the Court's federal question jurisdiction that they form part of the same case or controversy under Article III.” Ader v. SimonMed Imaging Inc., 324 F.Supp.3d 1045, 1050 (D. Ariz. 2018) (quotations omitted). To determine whether a counterclaim constitutes part of the same case or controversy, “the Court must determine whether the federal claim and the state claim arise from the same ‘common nucleus of operative fact.'” Id. (quoting In re Pegasus Gold Corp., 394 F.3d 1189, 1195 (9th Cir. 2005)). The Ninth Circuit applies the “liberal logical relationship test” which studies “whether the essential facts of the various claims are so logically connected that considerations of judicial economy and fairness dictate that all the issues be resolved in one lawsuit.” Pochiro v. Prudential Ins. Co. of Am., 827 F.2d 1246, 1249 (9th Cir. 1987) (citation omitted). In applying the test, the Court assumes the factual allegations in the challenged pleadings are true and draws all reasonable inferences in the non-moving party's favor. Poehler v. Fenwick, No. CV-15-1161-JWS, 2015 WL 7299804, at *1 (D. Ariz. Nov. 19, 2015).

         B. Affirmative Defenses

         The Court may strike an affirmative defense that is insufficient, immaterial, or impertinent. PAE Gov't Servs., Inc. v. MPRI, Inc., 514 F.3d 856, 858 (9th Cir. 2007) (citing Fed.R.Civ.P. 12(f)). An affirmative defense is immaterial if it does not directly relate to the plaintiff's underlying claim for relief. Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 975 (9th Cir. 2010) (citation omitted). An affirmative defense is impertinent if it does not pertain and is not necessary to the issues in question. Id. “The function of a 12(f) motion to strike is to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial.” Ader v. SimonMed Imaging, Inc., 324 F.Supp.3d 1045, 1049 (D. Ariz. 2018) (citation omitted).

         III. Discussion

         A. Plaintiff's Motion to Dismiss Counterclaims

         It is undisputed that there is no independent basis for the Court's jurisdiction over Defendant's counterclaims. Plaintiff argues that Mr. Janowiak's counterclaims should be dismissed because accusations that Plaintiff engaged in illegal or fraudulent conduct while working at Garden View are unrelated to the issues central to her FLSA claim-the hours she worked or the wages or overtime compensation she was paid-and therefore do not share the same common nucleus of operative fact. (Doc. 11 at 2-4.) Mr. Janowiak responds that grounds exist for the Court to exercise supplemental jurisdiction over the counterclaims because Plaintiff only filed her complaint for wage violations in response to Mr. Janowiak's discovery of her fraudulent use of his credit cards, and the evidence related to the counterclaims establishes Plaintiff's lack of credibility. (Doc. 21 at 9-10.)

         The Court concludes that it is inappropriate to exercise supplemental jurisdiction over Mr. Janowiak's counterclaims. The fact that all alleged claims and counterclaims arise out of the same employment relationship, alone, is insufficient to conclude that they share a common nucleus of operative fact. Ader, 324 F.Supp.3d at 1050. The Court also is unfamiliar with any authority-and Mr. Janowiak cites to none-to support the theory that counterclaims that might discredit a plaintiff's general credibility share a common nucleus of operative fact with the plaintiff's claims. Were the Court to exercise supplemental jurisdiction over every counterclaim that, if proven, might undermine a claimant's credibility, the exception would swallow the rule.

         In addition, considerations of judicial economy and fairness do not dictate that these issues be resolved in one lawsuit. Discovery for Plaintiff's claim will focus on Plaintiff's employment status, the hours she worked, whether an exemption applies to determine whether she is owed wages and overtime, and whether any violations by Defendants were willful. Conversely, Mr. Janowiak's ...


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