United States District Court, E.D. Wisconsin
JOYCE M. WILLIAMS, Plaintiff,
FARMERS NEW WORLD LIFE INSURANCE COMPANY, Defendant.
DECISION AND ORDER
WILLIAM E. DUFFIN U.S. Magistrate Judge
M. Williams took out a life insurance policy with Farmers New
World Life Insurance Company (Farmers) on October 27, 2016.
She died two months later, on December 26, 2016. (ECF No.
1-1, ¶¶ 2-3.) Joyce M. Williams, Tajah's
mother, was the beneficiary of that policy. She gave notice
of Tajah's death to Farmers. (ECF No. 1-1, ¶ 4.)
denied coverage for the benefits under the policy after
obtaining medical records from an emergency room visit three
months before Tajah took out the policy which stated that
Tajah's “social history is significant for frequent
marijuana use (daily).” Farmers contends it would not
have issued the policy had that fact been disclosed. (ECF No.
1-1, ¶¶ 8, 11, 18.)
Williams filed an action in state court on December 18, 2017,
alleging bad faith on the part of Farmers and seeking
recovery under the policy. (ECF No. 1-1.) Farmers removed the
action to this court based on the diversity of the parties.
(ECF No. 1.) It answered the complaint on March 14, 2018.
(ECF No. 4.) Among other things, Farmers alleged rescission
as an affirmative defense, citing Wis.Stat. § 631.11.
Williams has moved for partial judgment on the pleadings.
(ECF No. 9.) She “seeks a determination that
Defendant's Policy No. 002383592 issued on the life of
Tajah M. Williams is valid and thus calls for full payment of
the $150, 000 benefit of that policy to beneficiary and
Plaintiff Joyce M. Williams, plus Wis.Stat. § 628.46
interest.” (ECF No. 10 at 1.) She contends that Farmers
“conceded in its Answer that it entered into a life
insurance policy on the life of Tajah Williams, premiums for
which were paid in full and that the policy was in full force
and effect as of the date of Tajah's death on December
26, 2016.” (ECF No. 10 at 2-3.) She argues that Farmers
did not plead its rescission affirmative defense (with its
misrepresentation requirement) with the specificity required
by Wis.Stat. § 802.03(2), which procedural rule she says
applies rather than Rule 9 of the Federal Rules of Civil
Procedure. (ECF No. 10 at 6-9.) She also argues that Farmers
failed to adequately plead its rescission affirmative defense
because, under Wisconsin law, an insurer must satisfy each
element of the statute by clear and convincing evidence. (ECF
No. 10 at 10 (discussing Pum v. Wis. Physicians Serv.
Ins. Corp., 2007 WI.App. 10, 298 Wis.2d 497, 727 N.W.2d
346)). Moreover, she argues Farmers could not prove the
affirmative defense because it is based on medical records
Farmers obtained after Tajah's death, a practice
prohibited by the regulations of the Wisconsin Insurance
Commissioner. (ECF No. 10 at 11-12.)
response, Farmers argues that a federal court sitting in
diversity applies federal, not state, procedural rules,
including federal pleading requirements. (ECF No. 11 at 2.)
Thus, the fact that Wisconsin state law has heightened
pleading requirements does not have any applicability here.
It argues that its Answer, including its affirmative
defenses, sufficiently pleads facts to support its rescission
defense-specifically, that the insured misrepresented her
health on her insurance policy application regarding her use
of marijuana and that such misrepresentation was material to
Farmers's decision to issue the policy. (ECF No. 11 at
Procedurally, Williams's motion is more properly
regarded, at least in part, as a motion to strike an
affirmative defense under Rule 12(f). Although presented as a
motion for judgment on the pleadings under Rule 12(c),
judgment in Williams's favor would be appropriate only if
the court first struck Farmers's rescission affirmative
defense. And, of course, affirmative defenses
“are pleadings, and as such, leave to amend is freely
granted as justice requires.” Heller Fin., Inc. v.
Midwhey Powder Co., 883 F.2d 1286, 1294 (7th Cir. 1989)
(citing Fed.R.Civ.P. 15(a)). Thus, even if presently
deficient, Farmers ordinarily would be afforded the
opportunity to amend (if amendment could cure any defect)
before judgment in the plaintiff's favor would be
appropriate. Thus, the court turns to the question of whether
it is appropriate to strike Farmers's rescission
have applied a three-part inquiry to assess the sufficiency
of an affirmative defense:
(1) the matter must be properly pleaded as an affirmative
defense; (2) the matter must be adequately pleaded under the
requirements of Federal Rules of Civil Procedure 8 and 9; and
(3) the matter must withstand a Rule 12(b)(6) challenge -- in
other words, if it is impossible for defendants to prove a
set of facts in support of the affirmative defense that would
defeat the complaint, the matter must be stricken as legally
Sayad v. Dura Pharm., Inc., 200 F.R.D. 419, 421
(N.D. Ill. 2001) (quoting Renalds v. S.R.G. Restaurant
Group, 119 F.Supp.2d 800, 802 (N.D. Ill. 2000); citing
Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d
1286, 1294 (7th Cir. 1989)). “[M]otions to strike are
strongly disfavored and rarely granted.” Check v.
ShopKo Stores Operating Co. LLC, No. 17-C-1755, 2018
U.S. Dist. LEXIS 79856, at *2 (E.D. Wis. May 11, 2018)
(citing Williams v. Jader Fuel Co., Inc., 944 F.2d
1388, 1400 (7th Cir. 1991)). If the affirmative defense is
properly struck, the court would then consider whether
Williams is entitled to judgment in her favor.
court reviews a motion under Rule 12(c) by employing the same
standard applicable to a motion to dismiss under Rule
12(b)(6). Buchanan-Moore v. Cty. of Milwaukee, 570
F.3d 824, 827 (7th Cir. 2009). Consequently, the court
considers the facts in the light most favorable to the
non-movant. Id. Judgment in Williams's ...