Arch Ins. Co. v. A3 Dev., LLC, No. 23-cv-23524-BLOOM (2025)

Case details
Full caption
ARCH INSURANCE COMPANY v. A3 DEVELOPMENT, LLC
Country
United States
Jurisdiction
Federal
Decided
2025
Disposition
Motion Granted
Majority
Beth Bloom (J.) (unanimous Court)
ARCH INSURANCE COMPANY, Plaintiff, v. A3 DEVELOPMENT,..., Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.12025 WL 3091075Only the Westlaw citation is currently available.United States District Court, S.D. Florida.ARCH INSURANCE COMPANY, Plaintiff,v.A3 DEVELOPMENT, LLC, a foreign Limited liabilitycompany; A3 NORTH DEVELOPMENT, LLC, a foreignlimited A liability company; and A3 AMENITIES,LLC, a foreign limited liability company, Defendants.Case No. 23-cv-23524-BLOOM/Torres|Entered on FLSD Docket 10/21/2025Editor's Note: This decision contains discussion of citationreferences that are incorrect or do not actually exist. Theseinvalid citations appeared in the original court opinion andhave been preserved as written since they are part of theofficial record. Any links to these invalid citations have beenremovedAttorneys and Law FirmsGuy William Harrison, Jeffrey Scott Geller, EdwardEtcheverry, Etcheverry & Harrison LLP, Plantation, FL, forPlaintiff.Elizabeth K. Coppolecchia, Jessika Arce Graham, JosephHyam Serota, Richard Bradlee Rosengarten, Weiss SerotaHelfman Cole & Bierman, P.L., Coral Gables, FL, MichaelJohn Kurzman, Weiss Serota Helfman Cole & Bierman, Ft.Lauderdale, FL, for Defendants.ORDER ON MOTION TO STRIKEBETH BLOOM UNITED STATES DISTRICT JUDGE*1 THIS CAUSE is before the Court upon PlaintiffArch Insurance Company's (“Plaintiff”) Motion to StrikeAffirmative Defenses. ECF No. [101]. Defendants A3Development, LLC (“A3 Development”), A3 NorthDevelopment, LLC (“A3 North”), and A3 Amenities,LLC (“A3 Amenities”) (collectively “Defendants”) filed aResponse in Opposition (“Response”), ECF No. [107], towhich Plaintiff filed a Reply, ECF No. [114]. The Courthas reviewed the Motion, the supporting and opposingsubmissions, the record, and is otherwise fully advised. Forthe reasons that follow, Plaintiff's Motion is granted in partand denied in part.I. BACKGROUNDThis case arises from a construction project for certain luxuryresidences in Miami Beach. After several rounds of pleadings,Plaintiff filed its Third Amended Complaint on December20, 2024, alleging eight counts seeking declaratory relief andeight counts for breach of contract. ECF No. [80]. In response,Defendants filed a motion seeking to dismiss all sixteencounts. ECF No. [88]. The Court granted Defendants’ Motionin part, dismissing the claims for declaratory relief whilepreserving Plaintiff's breach of contract claims. ECF No.[98]. Thereafter, Defendants filed their Answer and AmendedAffirmative Defenses, asserting eight (8) affirmative defensesdirected to Plaintiff's breach of contract claims. ECF No. [99].Plaintiff's instant Motion now seeks to strike Defendants’First, Third, Fourth, Fifth, Sixth, Seventh, and Eighthaffirmative defenses on the basis that each is either amere denial (the First, Fourth, Fifth, and Sixth AffirmativeDefenses) or legally insufficient (the Third, Seventh, andEighth Affirmative Defenses). See ECF No. [101].II. LEGAL STANDARDA. Pleading Standard for Affirmative DefensesAn affirmative defense is a defense that “admits to thecomplaint, but avoids liability, wholly or partly, by newallegations of excuse, justification, or other negating matters.”Adams v. Jumpstart Wireless Corp., 294 F.R.D. 668, 671 (S.D.Fla. 2013) (citing Royal Palm Sav. Ass'n v. Pine Trace Corp.,716, F. Supp. 1416, 1420 (M.D. Fla. 1989)). District courtsin the Eleventh Circuit have been split as to the pleadingstandard necessary for affirmative defenses. See FAST SRLv. Direct Connection Travel LLC, 330 F.R.D. 315, 317 (S.D.Fla. 2018). While some courts have held that affirmativedefenses are subject to the heightened pleading standard ofRule 8(a) required by Twombly and Iqbal, see, e.g., Torresv. TPUSA, Inc., No. 2:08-cv-618-FtM-29DNF, 2009 WL764466, at *1 (M.D. Fla. Mar. 19, 2009), other courts haveconcluded that affirmative defenses need only satisfy the “lessstringent standards” of Rules 8(b) and 8(c) and thus “needonly ‘provide fair notice of the nature of the defense and thegrounds upon which it rests.’ ” Laferte v. Murphy Painters,Inc., No. 17-cv-60376, 2017 WL 2537259, at *2 (S.D. Fla.June 12, 2017) (quoting collecting cases); see Tsavaris v.Pfizer, Inc., 310 F.R.D. 678, 681 (S.D. Fla. 2015). Opinions
ARCH INSURANCE COMPANY, Plaintiff, v. A3 DEVELOPMENT,..., Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.2within this district have reinforced that affirmative defensesneed not “satisfy the strictures of Twombly and Iqbal.” MadRoom, LLC v. City of Miami, No. 21-cv-23485, 2024 WL2776173, at *1 (S.D. Fla. May 30, 2024). The Court agreeswith the “growing number of courts” that the lower pleadingstandard for affirmative defenses “is faithful both to the letterand the spirit of Rules 8(b) and (c), as revealed through theplain language of Rule 8 and Eleventh Circuit precedent.”Tsavaris, 310 F.R.D. at 682.*2 Because this Court follows the lower pleading standardrequirement set forth in Rules 8(b) and 8(c), an affirmativedefense need only provide the opposing party “fair notice ofthe nature of the defense and the grounds upon which it rests.”Forsythe v. Starboard Yacht Group, LLC, 345 F.R.D. 544,548 (S.D. Fla. 2023) (quoting Dionisio v. Ultimate Images &Designs, Inc., 391 F. Supp. 3d 1187, 1192 (S.D. Fla. 2019)).In other words, an affirmative defense is sufficiently pledif “a plaintiff has notice that an affirmative defense will beraised at trial.” Hewitt v. Mobile Research Tech., Inc., 285 F.App'x. 694, 696 (11th Cir. 2008) (citing Hassan v. U.S. PostalService, 842 F.2d 260, 263 (11th Cir. 1988)).B. Motion to StrikeRule 12(f) of the Federal Rules of Civil Procedure providesthat a court “may strike from a pleading an insufficientdefense or any redundant, immaterial, impertinent, orscandalous matter.” Fed. R. Civ. P. 12(f). However, “[a]motion to strike will ‘usually be denied unless the allegationshave no possible relation to the controversy and may causeprejudice to one of the parties.’ ” Harty v. SRA/Palm TrailsPlaza, LLC, 755 F. Supp. 2d 1215, 1218 (S.D. Fla. 2010)(citing Story v. Sunshine Foliage World, Inc., 120 F. Supp.2d 1027, 1030 (M.D. Fla. 2000)); see Home Mgmt. Solutions,Inc. v. Prescient, Inc., No. 07-20608-CIV, 2007 WL 2412834,at *1 (S.D. Fla. Aug. 21, 2007); U.S. Commodity FuturesTrading Comm'n v. Minto, LLC, Case No. 15–cv–61960, 2016WL 3944101, at *2 (S.D. Fla. May 17, 2016).While courts have “broad discretion when considering amotion to strike, [ ] striking defenses from a pleading remainsa drastic remedy to be resorted to only when required for thepurposes of justice and only when the stricken material hasno possible relation to the controversy.” Lalusis v. NCL (Bah.)Ltd., Case No. 24-cv-21354, 2024 WL 3183238, *1 (S.D.Fla. June 26, 2024) (quoting FAST SRL v. Direct ConnectionTravel, LLC, 330 F.R.D. 315, 317 (S.D. Fla. 2018)). Thatbeing said, “affirmative defenses may be stricken if thedefense is ‘insufficient as a matter of law.’ ” Forsythe, 345F.R.D. at 546 (quoting Microsoft Corp. v. Jesse's Computers& Repair, Inc., 211 F.R.D. 681, 683 (M.D. Fla. 2002)). “Adefense is insufficient as a matter of law only if: (1) on theface of the pleadings, it is patently frivolous, or (2) it is clearlyinvalid as a matter of law.” Id.III. DISCUSSIONA. First, Fourth, Fifth, and Sixth Affirmative DefensesPlaintiff argues that Defendants’ First, Fourth, Fifth, andSixth Affirmative Defenses should be stricken because theyare mere denials and not true affirmative defenses. SeeECF No. [101]. Plaintiff contends the First AffirmativeDefense merely asserts that the breach of contract claims arebarred because Defendants satisfied all of their contractualobligations. See id. at 4. The Fourth Affirmative Defensealleges that the claims are also barred because Defendantsprovided proper notice under the bonds. Id. at 6. As for theFifth and Sixth Affirmative Defenses, Plaintiff argues theyare duplicative of the Second Affirmative Defense and aremere denials because they simply allege that Plaintiff cannotrecover on its breach of contract claims because Defendants’conduct was not the proximate or at least sole proximate causeof Plaintiff's injuries. See id. at 7-8.Defendants respond that the First Affirmative Defense is morethan a mere denial because it “provides a complete defense toliability—that all conditions precedent to [Plaintiff's] liabilitywere indeed satisfied.” ECF No. [107] at 4. Defendantsalso maintain that “[u]nder Rule 9(c) a defendant mayallege compliance with conditions precedent as an affirmativedefense.” Id. at 4-5. Defendants argue that the allegationsin the Fourth Affirmative Defense establish a valid defensebecause the contract expressly allowed Defendants to correctdefective work. Defendants contend the allegations amountto more than a denial because “courts recognize contractualprovisions that waive a plaintiff's rights under the contractualdocuments as a valid affirmative defense.” Id. at 6. As forthe Fifth and Sixth Affirmative Defenses, Defendants contendthat both defenses “directly speak to causation and damages”and therefore are not mere denials. Id. at 6. Defendants alsoargue that the defenses are not duplicative of the SecondAffirmative Defense because, unlike the Second, the Fifthand Sixth Affirmative Defenses “address [Plaintiff's] self-infliction of damages under theories of avoidance.” Id. at 6.Because avoidance is a valid defense and because “redundantdefenses are not valid reasons for striking an affirmativedefense,” Defendants insist that Plaintiff's request to strike theFifth and Sixth Affirmative Defenses should be denied. Id.
ARCH INSURANCE COMPANY, Plaintiff, v. A3 DEVELOPMENT,..., Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.3*3 The Court finds the First Affirmative Defense is a meredenial. Although Defendants are correct that a failure tosatisfy a condition precedent is a valid affirmative defense,see MSPA Claims 1, LLC v. Infinity Auto Ins. Co., No.15-21504-CIV, 2017 WL 10402992, at *4 (S.D. Fla. Aug.9, 2017), merely alleging that a defendant satisfied all theobligations of a contract is not. Here, Defendants allege thatthey satisfied the conditions necessary to make a demandunder the bonds and therefore did not breach the relatedcontracts. See ECF No. [99] at 35-36. Defendants do notcontend that a condition precedent was not satisfied and,therefore, the First Affirmative Defense is not an affirmativedefense but rather a denial. Nevertheless, the Court will notstrike the defense because “[w]hen a defendant mislabels aspecific denial as a defense, the proper remedy is to treatthe claim as a denial, not to strike it.” Tsavaris v. Pfizer,310 F.R.D. 678, 682 (S.D. Fla. 2015) (citing FDIC v. BristolHome Mortgage Lending, LLC, No. 08–81536–CIV, 2009WL 2488302, at *3 (S.D. Fla. Aug. 13, 2009)). As such,Plaintiff's request to strike the First Affirmative Defense isdenied.In the Fourth Affirmative Defense, Defendants simplycontend that they had no obligation under the contract toprovide notice to Plaintiff and, therefore, failure to providesuch notice was not a breach of the contract. “[A] defensewhich points out a defect in the Plaintiff's prima facie caseis not an affirmative defense.” Pujals ex rel. El Rey DeLos Habanos, Inc. v. Garcia, 777 F. Supp. 2d 1322, 1328(S.D. Fla. 2011) (quoting In re Rawson Food Serv. Inc., 846F.2d 1343, 1349 (11th Cir. 1989)). Rather than admitting theelements of a breach of contract as is required to assert anaffirmative defense, Defendants contend the breach elementwas not satisfied because there was no obligation underthe contract to provide Plaintiff notice. Accordingly, theFourth Affirmative Defense is a specific denial.1 However,as previously explained, because mislabeled defenses shouldnot be stricken, the Court denies Plaintiff's request to strikeDefendants’ Fourth Affirmative Defense at this juncture.The Fifth Affirmative Defense is not a valid defense either. Inessence, the Fifth Affirmative Defense alleges that Plaintiff'sown actions contributed to the damages alleged in the ThirdAmended Complaint. See ECF No. [99] at 38. However,“comparative fault is not a defense to a breach of contractclaim.” Kobi Karp Architecture & Interior Design, Inc.v. RG Michigan 2014 LLC, No. 18-21079-CIV, 2021 WL4819903, at *7 (S.D. Fla. Oct. 15, 2021) (quoting Fed.Deposit Ins. Corp. v. Kunzmann Appraisals, Inc., No. 12-CV-80525, 2014 WL 12531543, at *3 (S.D. Fla. Feb. 11,2014)). While Plaintiff's comparative fault may be introducedas evidence of damages, “it has no bearing on whetherDefendants breached the contract at issue.” Fed. Deposit Ins.Corp., 2014 WL 12531543, at *3 (citing Tampa Elec. Co. v.Stone & Webster Eng'g Corp., 367 F. Supp. 27, 38 (M.D. Fla.1973)). Accordingly, the Court finds that the Fifth AffirmativeDefense must be stricken.*4 As for the Sixth Affirmative Defense, Defendants allegethat Plaintiff's “claims are barred because to the extent that[Plaintiff] has suffered any damages, [Defendants’] actionswere not the proximate legal cause.” ECF No. [99] at 38.The Court finds that these allegations constitute a specificdenial of the proximate cause element of Plaintiff's breach ofcontract claims and, therefore, cannot be considered a validaffirmative defense. See Inversiones YV3343, C.A. v. LynxFBO Fort Lauderdale, LLC, No. 21-CV-60197, 2024 WL2938805, at *11 (S.D. Fla. June 11, 2024) (explaining thatallegations that defendant was not the proximate cause wasnot a valid affirmative defense). While Defendants’ Responseexplains why the Sixth Affirmative Defense is not duplicativeof the Second, Defendants fail to explain why the allegationsare not merely a specific denial of Plaintiff's prima faciecase. Accordingly, since Defendants failed to establish thatthe Sixth Affirmative Defense is a valid defense, the Courtwill treat it as a specific denial of proximate cause.B. Third Affirmative DefenseThe Third Affirmative Defense claims that the Plaintiff's“claims are barred in whole or in part due to [Plaintiff's]frustration of the purpose of the bonds.” ECF No. [99] at36-37. Plaintiff argues that this affirmative defense is legallyinsufficient “as it is nothing more than the Defendants’basis for [Plaintiff's] breach of contract.” ECF No. [101] at5. Id. Defendant does not allege an “unforeseeable event”that would destroy the purpose of the bonds and, therefore,because the challenges Defendants faced were reasonablyforeseeable, the affirmative defense must be stricken.Defendants contend that Plaintiff's interpretation of thefrustration of purpose defense “is a narrow interpretation notsupported by case law.” ECF No. [107] at 5. According toDefendants, they “provided a viable and fact-based defense”by alleging that Plaintiff's “delayed response defeated the coreprotective purpose of the performance bonds.” Id.
ARCH INSURANCE COMPANY, Plaintiff, v. A3 DEVELOPMENT,..., Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.4Defendants’ frustration of purpose defense is indeedsufficient. Defendants simply need to provide “fair notice ofthe nature of the defense and the grounds upon which it rests.”Forsythe, 345 F.R.D. at 548. Here, Defendants have providednotice of the defense and have explained that the basis forasserting the defense is because of Plaintiff's delay in electinga preferred remedy. See ECF No. [99] at 36. Whether thosegrounds are sufficient to ultimately support a frustration ofpurpose defense is not for the Court to decide at this juncture.As such, the request to strike the Third Affirmative Defenseis denied.C. Seventh Affirmative DefenseDefendants’ Seventh Affirmative Defense alleges thatPlaintiff's “claims are barred by the doctrine of unclean handsbecause, among other things, [Plaintiff] acted wrongfullyby failing to promptly make an election of remedies underthe bonds. ECF No. [99] at 39. Plaintiff argues that theinvocation of the unclean hands defense is improper underthe circumstances because the defense requires “a showingof unscrupulous practices and conduct, concealment ofimportant facts, trickery, or taking unfair advantage of one'sposition.” ECF No. [101] at 8. Because a failure to promptlymake an election of remedies does not rise to the level ofegregious conduct, Plaintiff contends Defendants have failedto establish the affirmative defense. Plaintiff also points outthat the doctrine of unclean hands is an equitable defense, nota legal one. Given that the remaining claims in this case areall breach of contract claims and, therefore, legal in nature,Plaintiff argues that Defendants cannot rely on this equitabledefense.Defendants respond that the unclean hands defense isappropriate where a “plaintiff attempts to benefit from its ownactions or inaction,” including where the plaintiff breaches thecontract by failing to act under performance bonds. ECF No.[107] at 7.*5 The Court agrees with Plaintiff. The doctrine of uncleanhands is an equitable defense that is not applicable to anaction exclusively for legal damages. See Regions Bank v.Old Jupiter, LLC, No. 10–80188–CIV, 2010 WL 5148467, at*6 (S.D. Fla. Dec. 13, 2010) (“The unclean hands doctrinetraditionally applies only to claims for equitable relief or inopposition to equitable defenses.. .. Where, as here, a plaintiffseeks to recover only damages, the unclean hands doctrine isnot applicable”); 21st Mortg. Corp. v. TSE Plantation, LLC,301 So. 3d 1120, 1122 (Fla. 1st DCA 2020) (“The uncleanhands defense applies to bar an equitable claim”); Nat'l LoanAcquisitions Co. v. Tabernacle Christian Ctr. Ministries, Inc.,402 So. 3d 1028, 1037 (Fla. 4th DCA 2024) (“Unclean handsis an equitable defense[.]”) (quoting McMichael v. DeutscheBank Nat'l Tr. Co., 241 So. 3d 179, 181 (Fla. 4th DCA2018)). The only claims asserted by Plaintiff are breach ofcontract claims, which are actions at law, not actions inequity. AcryliCon USA, LLC v. Silikal GmbH, 985 F.3d 1350,1374 (11th Cir. 2021) (noting that “breach of contract isa traditional action at law”). Therefore, the unclean handsdoctrine does not apply, and Plaintiff's Motion to StrikeDefendants’ Seventh Affirmative Defense is granted.D. Eighth Affirmative DefenseThe Eighth Affirmative Defense alleges that Plaintiff “failedto mitigate its damages, and in fact caused its own allegedlosses by failing to promptly make an election of remediespursuant to Section 5 of the Bonds.” ECF No. [99] at39. Plaintiff argues that Defendants’ Eighth AffirmativeDefense should be stricken because Defendants have failedto plead the basic elements for a failure to mitigate damagesdefense. Plaintiff contends that such boilerplate allegationsare insufficient, as they fail to establish the essential factsto sustain a mitigation defense. Defendants respond that“[c]ourts recognize, particularly in surety cases, the duty tomitigate one's damages, and as such, Plaintiff's motion tostrike their Eighth Affirmative Defense should be denied.The Court finds that the allegations are sufficient to sustainthe Eighth Affirmative Defense. Failure to mitigate is indeeda valid affirmative defense in a breach of contract action,and although the facts supporting the defense are somewhatsparse, Defendants do point to sufficiently specific conductthat Plaintiff should have engaged in to mitigate damages.See Noveshen v. Bridgewater Assocs., LP, No. 13-CV-61535-KAM, 2016 WL 3902580, at *2 (S.D. Fla. Feb. 25, 2016);Bakshi v. Carnival Corp., CASE NO. 23-cv-21839, 2023 WL6376730, *7 (S.D. Fla. Aug. 23, 2023) (finding that failureto mitigate damages defense does not require significantadditional facts). Accordingly, Plaintiff's motion to dismissthe Eighth Affirmative Defense is denied.IV. CONCLUSIONAccordingly, it is ORDERED AND ADJUDGED that1. Plaintiff's Motion to Strike, ECF No. [101], isGRANTED in part and DENIED in part.
ARCH INSURANCE COMPANY, Plaintiff, v. A3 DEVELOPMENT,..., Slip Copy (2025) © 2025 Thomson Reuters. No claim to original U.S. Government Works.52. The Fifth and Seventh Affirmative Defenses areSTRICKEN.3. The First, Fourth, and Sixth Affirmative Defenses shallbe treated as specific denials.4. It is further ORDERED that no later than October28, 2025, defense counsel shall SHOW CAUSE as towhy the Court should not impose Rule 11 sanctionson Michael Kurzman and Elizabeth Coppelecchia forproviding the Court with non-existent cases as part ofDefendants’ response brief.DONE AND ORDERED in Chambers at Miami, Florida, onOctober 20, 2025.All CitationsSlip Copy, 2025 WL 3091075Footnotes1The only case law that Defendants seem to offer to the contrary is Solis v. Zenith Cap. LLC, a case thatappears not to exist. See ECF No. [107] at 5 (citing Solis v. Zenith Cap., LLC, No. 19-80730-CIV, 2019 WL7376782, at *2 (S.D. Fla. Sept. 26, 2019)). The Court also notes that later in Defendants’ Response, thereis another citation to what appears to be a non-existent case. See id. at 7 (citing PGA Nat'l Resort, LLCv. Liberty Mut. Fire Ins. Co., 2016 WL 8716673, at *3 (S.D. Fla. Oct. 24, 2016)). Defense counsel not onlyhas a duty of candor to the Court but a duty to ensure the brief filed is accurate. See ByoPlanet Int'l, LLCv. Johansson, No. 0:25-CV-60630, 2025 WL 2091025, at *7 (S.D. Fla. July 17, 2025) (“The filing of paperswithout taking the necessary care in their preparation is an abuse of the judicial system that is subject toRule 11 sanction.”) (quoting Mata v. Avianca, Inc., 678 F. Supp. 3d 443, 460 (S.D.N.Y. 2023) (additionallevel of citation and quotations omitted)). Defense counsel's inclusion of non-existent cases appears to havedisregarded those obligations.End of Document© 2025 Thomson Reuters. No claim to original U.S. Government Works.
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