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Hsbc Mortgage Services, Inc v. Equisouth Mortgage

February 7, 2011

HSBC MORTGAGE SERVICES, INC., PLAINTIFF,
v.
EQUISOUTH MORTGAGE, INC., AND MORRIS A. CAPOUANO, DEFENDANTS.



The opinion of the court was delivered by: Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

The Plaintiff, HSBC Mortgage Services, Inc. ("HSBC"), moves to strike portions of Defendant Equisouth Mortgage, Inc.'s ("Equisouth") Answer and the entirety of Equisouth and Co-Defendant Morris Capouano's ("Capouano") Affirmative Defenses. For the reasons that follow, the Motion is granted in part and denied in part.

I. BACKGROUND

HSBC brought suit against the Defendants alleging breach of a loan purchase agreement by Equisouth and breach of a personal guaranty by Capouano, the President of Equisouth. Defendants answered the complaint on October 18, 2010. The dispute centers around three loans - the Ferro loan, the Rasberry loan, and the Lozano loan. Plaintiff contends these loan documents contained material misrepresentations in regards to the borrower's employment, rent or occupancy, and that Equisouth has wrongly refused to repurchase the loans. Capouano and Equisouth contend that the loan documents were accurate at the time of loan, or, in the case of the Ferro loan, that Equisouth had no obligation to verify the borrower's employment information.

As a preliminary matter, Defendants assert that Plaintiff's Motion was untimely filed on November 22, 2010 because FED. R. CIV. P. 12(f) requires that such a motion be filed with 21 days of service of the Answer. Even assuming Plaintiff had an additional three days to file pursuant to FED. R. CIV. P. 6(d) because it was served electronically, its motions were nonetheless untimely. Regardless, the Court may choose to address the merits of the motion to strike. Sommerfield v. City of Chicago, No. 06 C 3132, 2010 WL 3786968, *5 (N.D. Ill. Sept. 20, 2010).

II. STANDARD OF REVIEW

Rule 12(f) provides that a court may strike an insufficient defense or "any redundant, immaterial, impertinent or scandalous matter." Generally, motions to strike are disfavored, but they are appropriate to remove "unnecessary clutter" from the litigation. Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1294 (7th Cir. 1989). The decision of whether to strike material is within the discretion of the trial court. Talbot v. Robert Matthews Distrib. Co., 961 F.2d 654, 665 (7th Cir. 1992).

III. DISCUSSION

Each of Plaintiff's motions will be taken in turn.

A. Motion to Strike Portions of Equisouth's Answer

First, HSBC contends Equisouth made numerous "self-serving averments" in its answer, including stating its position as to the wording of certain sections of the September 20, 2001 Flow Loan Purchase Agreement at issue in this case. HSBC seeks to strike Paragraphs 19, 20, 21, 22 and 52 of Equisouth's Answer. In those paragraphs, Equisouth generally asserts the Flow Loan Purchase Agreement was altered or amended, and quotes what it contends are the provisions of the amended agreement.

FED R. CIV. P. 8(b) requires that in responding to a pleading, a party must state in short and plain terms its defenses to each claim asserted against it, admit or deny the allegations raised against it, and fairly respond to the substance of the allegations. Equisouth meets this obligation in the paragraphs complained of by Plaintiff, and nothing in Rule 8(b) prohibits the additional statements that Equisouth includes in its answer. As such, HSBC's Motion to Strike portions of Equisouth's Answer is denied.

B. Motion to Strike Equisouth's and Capouano's Affirmative Defenses

Although Defendants submitted separate answers, they generally assert the same affirmative defenses with the same numbering. As such, the Court will jointly consider HSBC's motion to strike those ...


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