Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_19-cv-05398/USCOURTS-azd-2_19-cv-05398-0/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 29:201 Fair Labor Standards Act

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Shannon Troung,

Plaintiff,

v. 

Garden View Townhomes LLC, et al.,

Defendants.

No. CV-19-05398-PHX-DLR

ORDER 

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 

 

1 Defendant’s request for oral argument is denied because the issues are adequately 

briefed and oral argument will not help the Court resolve the motion. See Fed. R. Civ. P. 

78(b); LRCiv. 7.2(f); Lake at Las Vegas Investors Grp., Inc. v. Pac. Malibu Dev., 933 F.2d 

724, 729 (9th Cir. 1991). 

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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 

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“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 

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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 counterclaims would demand entirely different 

discovery related to the alleged scheme to defraud Mr. Janowiak. 

Furthermore, even if there were a greater nexus between Plaintiff’s claims and Mr. 

Janowiak’s counterclaims, policy considerations weigh against exercising jurisdiction. 

This district previously has done so under similar circumstances, noting “[t]he only 

economic feud contemplated by the FLSA involves the employer’s obedience to minimum 

wage and overtime standards. To clutter these proceedings with the minutiae of other 

employer-employee relationships would be antithetical to the purpose of the Act.” 

Poehler, 2015 WL 7299804, at *7 (citations omitted). Accordingly, the Court will grant 

Plaintiff’s motion to dismiss. 

B. Plaintiff’s Motion to Strike Affirmative Defenses 2-4

Defendants, in both their amended answer (Doc. 18) and answer to Plaintiff’s 

amended complaint (Doc. 32), assert identical affirmative defenses 2-4. Although 

Plaintiff’s motion to strike refers specifically to affirmative defenses 2-4 asserted in the 

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amended answer, which is no longer the operative answer, the Court will treat the motion 

as directed to the identical affirmative defenses 2-4 raised in the answer to Plaintiff’s 

amended complaint. The Court will address whether Defendants’ affirmative defenses of 

estoppel, setoff, and unclean hands are sufficient, material, and pertinent, in turn. 

1. Estoppel

In affirmative defense 2, Defendants advance an estoppel defense, contending that 

Plaintiff’s failure to account for and/or report her overtime hours estops her claim for 

overtime related pay. (Doc. 32 at 5-6.) Plaintiff contends that Defendants’ estoppel 

defense is not recognized under the FLSA and should therefore be stricken. (Doc. 19 at 3.)

However, “there appears to be a circuit split as to whether an employee’s failure to 

accurately report his or her time on his or her timesheets estops the employee from 

challenging those timesheets in a FLSA suit,” and the Ninth Circuit has not spoken directly 

on the question. Lillehagen v. Alorica, Inc., No. SACV 13-0092-DOC (JPRx), 2014 WL 

6989230, at *21 (C. D. Cal. Dec. 10, 2014). Because the Ninth Circuit has not definitively 

held that an estoppel defense is inappropriate in an FLSA case, the Court will not strike 

Defendants’ second affirmative defense. 

2. Setoff 

In affirmative defense 3, Defendants contend that sums due to Plaintiff should be 

set off by the amount owed by Plaintiff to Defendants stemming from her fraudulent use 

of Mr. Janowiak’s credit cards to make purchases and obtain cash advances. (Doc. 32 at

6-7.) Plaintiff asserts that, because the Court lacks subject matter jurisdiction over the 

counterclaims, it should not consider those same claims when recast as an affirmative 

defense. (Doc. 19 at 4-5.) When confronted with this issue, the Ninth Circuit in Ader

explained,

Courts sometimes use the terms setoff and counterclaim 

interchangeably. The Ninth Circuit, however, has expressed a 

willingness to disregard labels and characterize an action 

according to its substance. [Defendant’s] affirmative defense 

alleges that [a]ny sums due to [Plaintiff] from Defendants 

should be set off by the sums owed by [Plaintiff] to 

[Defendant] stemming from [Plaintiff’s] engage[ment] in 

various activities related to the sale of radiological equipment 

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to [Defendant]. This defense would require the presentation of 

[Defendant’s] own evidence about [Plaintiff’s] alleged 

misdeeds and a finding by the jury as to Defendants’ damages 

after considering the Court’s instruction on the law regarding 

Defendants’ claims. Only then would the jury offset any award 

of damages to [Plaintiff] by the amount awarded to 

Defendants. The Court thus sees no distinction between the 

Defendants’ affirmative defense of setoff and its 

counterclaims, which have been dismissed for lack of subject 

matter jurisdiction. Because the Court does not have 

jurisdiction over those counterclaims, the Court finds no basis 

for allowing the parties to litigate those same claims just 

because they have been framed as an affirmative defense rather 

than a counterclaim. As such, the Court will strike the 

Defendants’. . . affirmative defense of set off. 

Ader, 324 F. Supp. 3d at 1052-53. Like in Ader, Defendants’ third affirmative defense 

would obligate the discrete discovery and presentation of evidence about Plaintiff’s alleged 

illicit activity and a separate jury finding regarding Defendants’ damages. Consequently, 

any distinction between Defendants’ affirmative defense of setoff and Mr. Janowiak’s

counterclaims is illusory. The Court will not permit Defendants to work around the Court’s 

dismissal of Mr. Janowiak’s counterclaims by recharacterizing them as an affirmative 

defense. The Court will therefore strike Defendants’ third affirmative defense. 

3. Unclean Hands

In affirmative defense 4, Defendants advance an unclean hands defense, contending 

that Plaintiff’s claim is barred, to the extent Plaintiff seeks amounts in excess of minimum 

wage, because of Plaintiff’s fraudulent use of Mr. Janowiak’s credit cards. However, as 

discussed when addressing Defendants’ third affirmative defense, the Court has declined 

to exercise supplemental jurisdiction over Mr. Janowiak’s counterclaims that allege 

Plaintiff’s misconduct unrelated to her claims. Like the setoff affirmative defense, the 

unclean hands affirmative defense is merely a recharacterization of these counterclaims. 

Thus, the Court will strike Defendants’ fourth affirmative defense.

IT IS ORDERED that Plaintiff’s motion to dismiss (Doc. 11) is GRANTED. Mr. 

Janowiak’s counterclaims are hereby dismissed. 

//

//

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IT IS FURTHER ORDERED that Plaintiff’s motion to strike (Doc. 19) is 

GRANTED IN PART. The Clerk of Court is directed to strike Defendants’ third and 

fourth affirmative defenses in their answer to Plaintiff’s amended complaint (Doc. 32).

Dated this 8th day of January, 2020.

Douglas L. Rayes

United States District Judge

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