Summary
striking paragraphs in defendants' Preliminary Statement to counterclaims that were "broad, ad hominem character attacks" on plaintiff's "integrity"
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David W. Sanford, Ellen Peterson, Russell Lasser Kornblith, Jeremy Heisler, Sanford Heisler Sharp, LLP, New York, NY, for Plaintiff.
Anthony Proscia, Kaufman Dolowich & Voluck LLP, New York, NY, Adam Matthew Marshall, Kaufman Dolowich & Voluck LLP, Woodbury, NY, for Defendant.
Cristina Roseann Yannucci, Lewis Brisbois Bisgaard & Smith LLP (Water St), Jonathan B. Bruno, Rivkin Radler, LLP, New York, NY, Mateo Jani Vila, L’Abbate Balkin Colavita & Contini, LLP, Garden City, NY, for Third-Party Defendants.
MEMORANDUM ORDER
JED S. RAKOFF, UNITED STATES DISTRICT JUDGE
Before the Court is plaintiff’s motion to strike paragraphs 144 through 158 and 293 through 296 of defendants’ Answer to Second Amended Complaint with Affirmative Defenses, Jury Demand and Counterclaims ("Answer"). ECF Nos. 45, 55. Plaintiff argues that paragraphs 144 through 158 - which constitute the Preliminary Statement to defendants’ counterclaims - should be stricken as "scandalous, irrelevant and prejudicial," Memorandum of Law in Support of Plaintiff’s Motion to Strike ("Pl.’s Mem.") at 3, ECF No. 56, and that paragraphs 293 through 296 should be stricken because they relate to settlement negotiations and are therefore "immaterial and potentially prejudicial," id. at 6 (citation omitted). For the following reasons, plaintiff’s motion is granted with respect to paragraph 144 and paragraphs 155 through 158, and denied with respect to the remaining paragraphs.
Familiarity with all prior proceedings is here assumed. In brief, this case arises from defendants’ representation of plaintiff Alexander Prout in connection with his claims against his former employer, Invesco, Ltd. ("Invesco"), for whistleblower retaliation and violations of the Family and Medical Leave Act ("FMLA"). Prout alleges that defendants negligently let the two-year statutes of limitations lapse on his claims for non-willful violation of the FMLA and retaliation under the Sarbanes-Oxley Act ("SOX"). Defendants deny Prout’s allegations and assert counterclaims for breach of contract, quantum meruit, and a charging lien against Prout.
In the Preliminary Statement to their counterclaims, defendants make several specific allegations, including that Prout: (1) initially expressed to defendants his intention to leave Invesco, but to do so on terms that would maximize his severance, Answer ¶ 145-46; (2) intended to leave Invesco because he was not performing well, id. ¶ 147-48; (3) took stolen proprietary information from Invesco to Morgan Stanley (his new employer) and then lied about having done so, id. ¶ 149-51; and (4) strategically chose to let the statutes of limitations lapse on his claims against Invesco, id. ¶ 152-54. Defendants also allege more generally that Prout lacks "integrity." See, e.g., id ¶ 157 ("If Prout truly had integrity, it would show in his actions - it does not."); see also ¶¶ 144, 155-56, 158.
Later, in paragraphs 293 through 296 of their Answer, defendants allege that Prout made several efforts to improperly extract a settlement for his instant malpractice claim. Defendants allege that Prout’s lawyer, David Sanford, Esq., encouraged them to settle because defendants’ insurance carrier would reimburse them. Id. ¶¶ 294-95. Defendants also allege that Sanford threatened to "commence a suit in an effort to embarrass [defendants] and to tarnish their reputations within the legal community." Id. ¶ 296.
Under Rule 12(f) of the Federal Rules of Civil Procedure, "[t]he court may strike from a pleading ... any redundant, immaterial, impertinent, or scandalous matter." However, "motions to strike are disfavored and should not be granted ‘unless there is a strong reason for so doing.’ " Bailey v. Pataki, No. 08 Civ. 8563 JSR, 2010 WL 234995, at *3 (S.D.N.Y. Jan. 19, 2010) (citation omitted). While courts are generally reluctant to grant motions to strike, "allegations may be stricken if they have no real bearing on the case, will likely prejudice the movant, or where they have criminal overtones." G-I Holdings, Inc. v. Baron & Budd, 238 F.Supp.2d 521, 555 (S.D.N.Y. 2002); see id. at 555-56 (granting motion to strike where allegations were "amorphous, unspecific and [could ]not be defended against," and "harm[ed] [the moving party] in the public eye and could influence prospective jury members"). Beginning with the Preliminary Statement to defendants’ counterclaims, there is no question that in parts of this section defendants have disregarded the boundaries of acceptable tone and language in a manner that does no service to their clients and reflects poorly on themselves and the profession. To strike the entire Preliminary Statement, however, would be unjustified. In particular, the allegations made in paragraphs 145 through 154 bear directly on the merits of Prout’s legal malpractice claim. As this Court has discussed previously, Prout’s malpractice claim requires him to prove that he would have received a more advantageous result on his underlying retaliation claims if it had not been for defendants’ negligence. Defendants’ allegations in paragraphs 145 through 148 make it harder for Prout to meet this burden, as they suggest that Prout was fired not as a result of retaliation, but because he either wanted to leave Invesco or was underperforming.
Furthermore, paragraphs 149 through 154 suggest that defendants’ failure to pursue Prout’s retaliation claims was not the product of negligence, but was instead a strategic decision made with Prout’s consent, and made in part because of concerns regarding Prout’s alleged theft of proprietary information from Invesco. See, e.g., Memorandum of Law on Behalf of Counterclaim-Plaintiffs in Opposition to Counterclaim-Defendant’s Motion to Strike Portions of the Counterclaims ("Def. Mem.") at 6, ECF No. 68 ("[Defendants] have asserted (and will continue to assert) that Prout was a fully engaged client that was involved in and agreed to each and every litigation strategy decision during the representation."). If Prout strategically chose to let the statutes of limitations lapse on his retaliation claims, then he may have difficulty proving that defendants were negligent or otherwise liable. Cf. Affordable Cmty., Inc. v. Simon, 95 A.D.3d 1047, 944 N.Y.S.2d 606, 607 (2nd Dep’t 2012) (finding triable issue of fact regarding defendant attorney’s negligence where "defendant alleged that the plaintiff limited him to presenting only certain unsuccessful defense arguments in the course of representation").
The paragraphs above, then, have a "real bearing on the case," G-I Holdings, 238 F.Supp.2d at 555, and to the extent they prejudice Prout, they do not do so "unduly," Wahlstrom v. Metro-N. Commuter R.R. Co., No. 96 Civ. 3589 PKL, 1996 WL 684211, at *3 (S.D.N.Y. Nov. 25, 1996). The remaining paragraphs in the Preliminary Statement, however, "are amorphous, unspecific and cannot be defended against." G-I Holdings, 238 F.Supp.2d at 556. Furthermore, these paragraphs "serve[ ] no purpose except to inflame the reader," Morse v. Weingarten, 777 F.Supp. 312, 319 (S.D.N.Y. 1991), and "gin up resentment ... on the part of a potential jury," Low v. Robb, No. 11-cv-2321 JPO, 2012 WL 173472, at *10 (S.D.N.Y. Jan. 20, 2012).
Even plaintiff concedes, in his reply brief, that he "has not moved to strike allegations ... that (i) he misappropriated proprietary information from Invesco and gave it to Morgan Stanley and then, because of this purported misconduct, (ii) agreed to forego his whistleblower retaliation claims under the Sarbanes-Oxley Act ... as well as his non-willful Family Medical Leave Act ... claims." Reply Memorandum of Law in Support of Plaintiff’s Motion to Strike ("Reply") at 3, ECF No. 69. But these allegations are exactly the ones defendants make in paragraphs 145 through 154 of their Preliminary Statement. See, e.g., Answer ¶ 149 ("He brought those proprietary materials to Morgan Stanley."); id. ¶ 152 ("Prout and his lawyer ... made the decision, after discussions of the timing of Prout’s theft, to let the two-year statute of limitations pass and rely on the potential additional year for willful violations of the Family Medical Leave Act (‘FLMA’).").
The Court notes, however, that it is not its usual practice to submit a complaint (or indictment) to a jury, since it has no evidentiary value.
Defendants argue that the paragraphs should not be stricken because Prout’s "lack of integrity ... [is] relevant to issues associated with [his] legal malpractice claim and [defendants’] Counterclaims." Def. Mem. at 3. But "integrity" is not an element of any claim or counterclaim at issue, and to the extent that defendants seek to impeach Prout’s character for truthfulness at trial, they are free do so. See Fed.R.Evid. 608. The remaining paragraphs of defendants’ Preliminary Statement are no more than "broad, ad hominem character attacks that do not assert any facts that can be litigated in this case." Low, 2012 WL 173472, at *10. "Even if [Prout] is ultimately found liable on every claim in the case, we will be no closer to knowing whether" his "repeated failures to be truthful are astonishing for someone who repeatedly reminds all that he has ‘integrity.’ " Id. ; Answer ¶ 155.
Moving to paragraphs 293 through 296 of defendants’ Answer, Prout argues that "[t]hese allegations ‘relate to conduct in the course of settlement negotiations, and [should] be stricken’ " under Rule 408 of the Federal Rules of Evidence. Pl.’s Mem. at 6 (citation omitted). Here Prout is mistaken, as Sanford’s alleged statements do not constitute protected compromise offers or negotiations within the meaning of Rule 408. To the contrary, defendants allege that Sanford tried to extort them by threatening to sue in order to harm their reputation. Answer ¶ 296. These are allegations that describe "baseless threats of litigation," Alpex Computer Corp. v. Nintendo Co., 770 F.Supp. 161, 164 (S.D.N.Y. 1991) (subsequent history omitted), not genuine attempts at settlement. See id. ("Rule 408 aims to promote dispute resolution, not threats of litigation." (citation omitted) ); Wayne D. Brazil, Protecting the Confidentiality of Settlement Negotiations, 39 Hastings L.J. 955, 980 (1988) ("[T]here is no reason to read rule 408 as barring evidence that a party attempted to extort another during settlement negotiations.").
For the foregoing reasons, plaintiff’s motion is granted with respect to paragraph 144 and paragraphs 155 through 158, and denied with respect to the remaining paragraphs. Defendants shall file an amended answer, excising the stricken portions, on or before August 15, 2018.
SO ORDERED.