Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-00846/USCOURTS-casd-3_10-cv-00846-3/pdf.json

Nature of Suit Code: 385
Nature of Suit: Property Damage - Product Liability
Cause of Action: 28:1441 Petition for Removal- Property Damage

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MARINE GROUP, LLC d.b.a. MARINE

GROUP BOAT WORKS; and NATIONAL

UNION FIRE INSURANCE CO. OF

PITTSBURGH, PENNSYLVANIA.,

Plaintiffs,

Case No. 10cv00846 BTM (CAB)

ORDER GRANTING PLAINTIFFS’

MOTION TO DISMISS DEFENDANT

EXACTECH’S AMENDED

COUNTERCLAIMS

v.

MARINE TRAVELIFT, INC.; ALL-LIFT

SYSTEMS, INC.; OLSEN

FABRICATION, INC.; EXACTECH, INC.;

JUST IN TIME CORP.; SOUTHERN

WEAVING CO.; and DOES 4-20,

Defendants.

EXACTECH, INC.,

Counterclaimant,

 v.

MARINE GROUP, LLC d.b.a. MARINE

GROUP BOAT WORKS; and NATIONAL

UNION FIRE INSURANCE CO. OF

PITTSBURGH, PENNSYLVANIA.,

Counterdefendants.

Pending before the Court is Plaintiffs’ motion to dismiss the amended counterclaims

of Defendant ExacTech, Inc. (“ExacTech”). For the reasons set forth herein, the Court

GRANTS Plaintiff’s motion (Doc. 112) in its entirety.

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BACKGROUND

This lawsuit arises out of a January 19, 2009 accident involving the alleged failure of

a boat hoist and boat handling equipment (the “boat lift”) and the resulting fall of a large

motor yacht from a suspended state into a concrete sea wall. Plaintiffs (the boat repair

facility operating the boat lift at the time of the accident, and its insurance company) claim

that the boat hoist and boat handling equipment “were manufactured, designed, supplied,

sold, and distributed” by all Defendants (including ExacTech), “and each of them.” (Doc. 75,

Amended Complaint, at ¶ 15.) Plaintiffs seek damages, declaratory relief, prejudgment

interest, and attorneys’ fees and costs against all Defendants on multiple theories, including

negligence, strict products liability, breach of express and implied warranty, and equitable

subrogation.

On November 29, 2011, ExacTech filed its amended answer (Doc. 103), which

included cross claims against other Defendants and counterclaims against Plaintiffs under

three causes of action, respectively entitled “Contributory Negligence/Comparative Fault,”

“Bad Faith,” and “Declaratory Relief.”

DISCUSSION

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) should be granted

only where a plaintiff's complaint lacks a “cognizable legal theory” or sufficient facts to

support a cognizable legal theory. Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th

Cir. 1988). When reviewing a motion to dismiss, the allegations of material fact in plaintiff’s

complaint are taken as true and construed in the light most favorable to the plaintiff. See

Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Although detailed

factual allegations are not required, factual allegations “must be enough to raise a right to

relief above the speculative level.” Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007). “A

plaintiff’s obligation to prove the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than

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labels and conclusions, and a formulaic recitation of the elements of a cause of action will

not do.” Id.

All three of ExacTech’s asserted causes of action fail to state a claim upon which relief

can be granted. The Court addresses each in turn.

a. First cause of action: “Contributory Negligence/Comparative Fault”

Exactech claims in its first cause of action that if it is “found liable” and it “is required

to pay damages . . . , [it] is entitled to contribution from Counter-Defendants in an amount

based on [their] comparative fault.” (Doc. 103 at 17.)

This cause of action fails to state a claim upon which relief can be granted as to the

counterclaim against Plaintiffs, because it mirrors ExacTech’s affirmative defenses and does

not seek any affirmative relief (i.e., this cause of action cannot exist independently; it is based

entirely upon the claims asserted against ExacTech). See generally Fed. R. Civ. P. 13; see

also Allstate Ins. Co. v. Pira, No. C 11-3511, 2012 WL 1997212, at *5 (N.D. Cal. June 4,

2012) (“Courts have . . . discretion to dismiss counterclaims under Fed. Rule Civ. Pro. 12(f)

where they are either the ‘mirror image’ of claims in the complaint or redundant of affirmative

defenses.” (citation and quotation marks omitted)).

The substance of Exactech’s first cause of action is properly presented as an

affirmative defense pursuant to Rule 8 of the Federal Rules of Civil Procedure. See Fed. R.

Civ. P. 8(c)(1) (enumerating “contributory negligence” as an affirmative defense to be

pleaded pursuant to Rule 8). Thus, the Court dismisses the first cause of action in

Exactech’s counterclaim against Plaintiffs, and shall treat the affirmative defense raised

therein “as though it were correctly designated” as such. See Fed. R. Civ. P. 8(c)(2). 

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b. Second cause of action: “Bad Faith”

ExacTech’s second cause of action alleges that ExacTech was not involved with “the

manufacture, production, supply or marketing” of the boat lift, and that “thorough discovery”

has failed to produce any “evidence, material, admissible or otherwise to support any of the

eight causes of action” brought by Plaintiffs against ExacTech. (Doc. 103 at 17.) On that

basis, ExacTech demands a recovery of all litigation expenses on the ground that Plaintiffs

acted with “intentional dishonesty and vexatious, wanton, oppressive, and bad faith” conduct

in filing their First Amended Complaint. (Id. at 18.)

In opposition to Plaintiffs’ motion to dismiss, ExacTech is unable to cite any authority

supporting the existence of an independent cause of action for bad faith filing. (See Doc. 118

at 3-4.) Rather, ExacTech’s citations stand for the uncontroversial proposition that attorneys’

fees and costs are available as a remedy for bad faith filing of a complaint. (Id.) However,

all these cases address requests for fees and costs raised in the context of a motion for

sanctions. Since ExacTech’s second cause of action essentially alleges that Plaintiffs failed

to comply with the requirements of Rule 11, the Court dismisses the second cause of action. 

If ExacTech wishes to seek attorneys’ fees and costs based on its allegations of bad faith

filing, it must do so by filing a motion that comports with the requirements of Rule 11. See

Fed. R. Civ. P. 11(c)(2).1

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Plaintiffs are correct that if ExacTech’s second cause of action is to be construed as

a claim for malicious prosecution under California law, it must be dismissed on the ground

that a party may not bring a claim for malicious prosecution in the same action in which it is

being maliciously prosecuted. See Babb v. Superior Court, 3 Cal. 3d 841, 845-46 (1971) (“It

is hornbook law that the plaintiff in a malicious prosecution action must plead and prove that

the prior judicial proceeding of which he complains terminated in his favor. . . . Because of

this requirement, it is obvious that a defendant cannot cross-complain or counterclaim for

malicious prosecution in the first or main action . . . , since a claim cannot state a cause of

action at that stage of the proceedings. This appears to be the rule, not only in California,

but generally.” (citations omitted)).

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c. Third cause of action: “Declaratory Relief”

In its third cause of action, ExacTech seeks a declaratory judgment that (a) Plaintiffs

are liable in contributory negligence and comparative fault; (b) Plaintiffs are liable for

attorneys’ fees and costs as a result of their bad faith conduct in filing their complaint; and

(c) that the First Amended Complaint, as well as ExacTech’s cross claims and counterclaims,

“invoke the admiralty jurisdiction of this court . . . and the preemptive application of the

general maritime law.” (Doc. 103 at 18-19.)

ExacTech’s claims for declaratory relief as to (a) and (b) in the preceding paragraph

are duplicative of ExacTech’s first two causes of action, and the Court accordingly dismisses

them. With regard to ExacTech’s third request for declaratory relief, the choice of law

applicable to a particular claim or case is not the proper subject matter for a declaratory

judgment, and the Court dismisses the third request as well. See Calderon v. Ashmus, 523

U.S. 740, 749 (1998) (holding that declaratory judgment is appropriate only where it would

“completely resolve” a concrete controversy, and not where it would merely “carve out one

issue in the dispute for separate adjudication”). 

CONCLUSION

For the reasons set forth above, the Court DISMISSES each of ExacTech’s

counterclaims.

IT IS SO ORDERED.

DATED: July 6, 2012

BARRY TED MOSKOWITZ, Chief Judge

United States District Court

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