United States District Court, D. Connecticut
ORDER ON MOTION TO STRIKE [DKT. 23].
Vanessa L. Bryant United States District Judge
Introduction and Procedural History
action arises out of an insurance coverage dispute.
Plaintiffs/Counter-Defendants Murray Haber, Susan, Haber, and
the Murray Haber Revocable Trust (collectively, the
“Habers”) allege that Defendant/Counter-Plaintiff
Bankers Standard Insurance Company (“Bankers”)
wrongfully withheld additional insurance benefits and
proceeds of up to $2, 000, 000 due to the Habers under the
insurance policy on their home for damages caused by an oil
spill. [Dkt. 1-1]. It is undisputed that Bankers paid the
Habers $300, 000 in policy benefits. [Dkt. 9].
filed a counterclaim, seeking a declaratory judgment that its
insurance policy has an express exclusion that applies to
this loss except to the extent of “limited
coverage” in the amount of $10, 000, as provided by an
endorsement to the policy. [Dkt. 9 at ¶¶20-26]. In
response, the Habers denied Bankers's characterization of
its policy and asserted five affirmative defenses: failure to
state a claim, estoppel, waiver, unclean hands, and laches.
before the Court is Bankers's motion to strike the last
four of the Habers' affirmative defenses as legally
insufficient. [Dkt. 23]. The Habers oppose the motion. [Dkt.
28]. The Court requested supplemental briefing on whether
insurance coverage can be expanded by estoppel or waiver,
[Dkt. 43], and the parties submitted memoranda in response.
[Dkt. 45 (Defs.'s Supp'l Mem.), Dkt. 46 (Pl.'s
Supp'l Mem.)]. After considering the briefing, the Court
GRANTS in part and DENIES in part the motion for the reasons
Legal Standard for a Motion to Strike
Rule 12(f) of the Federal Rules of Civil Procedure, a court
may strike “any insufficient defense or any redundant,
immaterial, impertinent, or scandalous matter.”
Fed.R.Civ.P. 12(f). An affirmative defense may be stricken if
(a) it does not meet “the plausibility standard of
Twombly”; (b) “it is a legally
insufficient basis for precluding a plaintiff from prevailing
on its claims;” or (c) it prejudices the defendant and
it is “presented beyond the normal time limits of the
Rules.” GEOMC Co. v. Calmare Therapeutics
Inc., 918 F.3d 92, 98-99 (2d Cir. 2019). “When
considering a motion to strike affirmative defenses,
“the Court should construe ‘the pleadings
liberally to give the defendant a full opportunity to support
its claims at trial, after full discovery has been made.'
” GEOMC Co. v. Calmare Therapeutics, Inc., No.
3:14-CV-01222 (VAB), 2016 WL 6122930, at *4 (D. Conn. Oct.
19, 2016), aff'd, 918 F.3d 92 (2d Cir. 2019)
(internal citations and quotation marks omitted).”
Habers assert waiver as their third affirmative defense,
arguing that Bankers's payments, and its acts and
conduct, are inconsistent with an intent to limit its
responsibility for the Habers' losses to $10, 000, and
thus Bankers waived enforcement of that limitation. [Dkt. 19
at 4, Dkt 28 at 5.] In response, Bankers argues that waiver
cannot expand coverage under a policy where coverage does not
previously exist. [Dkt. 23 at 2].
is the voluntary relinquishment of a known right.”
MacKay v. Aetna Life Ins. Co., 173 A. 783, 787
(Conn.1934); see Heyman Assocs. No. 1 v. Ins. Co. of
State of Pa., 653 A.2d 122, 134 (Conn. 1995) (same).
“An insurance contract, once entered into, cannot then
be ‘reformed [through waiver] to create a liability for
a condition specifically excluded by the specific terms of
the policy.'” Great Lakes Reinsurance (UK), PLC
v. JDCA, LLC, No. CIV.A. 11-00001-WGY, 2014 WL 6633039,
at *15 (D. Conn. Nov. 21, 2014) (quoting Heyman, 653
A.2d at 134)). “This limitation on the applicability of
waiver to an insurance contract recognizes that because
waiver requires the relinquishment of a known, and therefore
existing, right within the insurance contract, a
party cannot create through waiver coverage for a claim that
the parties expressly had excluded from that contract.”
Heyman, 653 A.2d at 134 (emphasis added).
Court agrees with Bankers. Here, if Bankers succeeds in
proving that the insurance policy specifically excluded
coverage for oil spills, with the exception of a $10, 000
limited coverage endorsement, then Bankers has also shown
that it had no rights regarding such coverage that it could
waive. See Heyman, 653 A.2d at 134.
Habers argue that this interpretation mischaracterizes their
argument: they are not arguing that Bankers's waiver
created additional coverage, but rather that Bankers waived
the right to enforce a limit on already existing
coverage. [Dkt. 28 at 5]. They cite no cases supporting this
distinction, however, and the Court cannot see how it is
relevant. In both cases-the case of an expansion to a new
type of coverage and the expansion beyond a specified
coverage limit-the underlying theory is the same: a
“company should not be required by waiver… to
pay a loss for which it charged no ...