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The Muhler Co. Inc. v. Window World of N Charleston LLC

United States District Court, D. South Carolina, Charleston Division

March 10, 2017




         This matter is before the court on: (1) defendant State Farm Fire & Casualty Co.'s (“State Farm”) motion to strike, or in the alternative, to dismiss the amended complaint and third-party complaint filed by plaintiff The Muhler Company (“Muhler”) and third-party plaintiff Window World of North Charleston (“WWNC”); and (2) State Farm's motion to reconsider the court's September 27, 2016 order (“September 2016 order”) granting Muhler's motion for assignment and to amend the complaint, ECF No. 130. For the reasons set forth below, the court (1) grants the motion to strike; and (2) grants the motion to reconsider.

         I. BACKGROUND

         Muhler and WWNC were direct competitors in the business of supplying and installing replacement windows in Charleston County, South Carolina, and in neighboring coastal counties. WWNC advertised through its website and other media that it adhered to the “strictest industry standards” in the conduct of its replacement window installation services. It advertised that it provided the “best for less” and that it was “lead certified.” These representations were aimed at and reached consumers in the market. Similarly, Muhler advertised in the market that it “strives to exceed customer expectations by offering the highest level of service and value, ” that it “complies with industry standards, ” and that it is a “certified lead renovator.”

          Muhler filed a complaint against WWNC in state court on March 11, 2011. WWNC removed the case to federal court on April 11, 2011. Muhler filed an amended complaint asserting three causes of action against WWNC: (1) false and misleading advertising violation of the Lanham Act; (2) common law unfair competition; and (3) violation of the South Carolina Unfair Trade Practices Act. On August 28, 2014, the court granted Muhler's motion for default judgment against WWNC in the amount of $258, 851.67 in actual damages, $2, 866, 358.50 in disgorgement of profits, $118, 600 in attorneys' fees, and $7, 506.09 in costs. ECF No. 118. On December 9, 2015, the court ordered WWNC to appear for an examination to determine what assets WWNC had to satisfy the default judgment. ECF No. 125. On August 1, 2016, Muhler moved to amend the complaint to add WWNC's commercial general liability insurer, State Farm Fire & Casualty Co. (“State Farm”), as a party and assign WWNC's claims against State Farm to Muhler. ECF No. 127. On September 27, 2016, with no responsive pleadings filed against Muhler's motion to amend, the court granted Muhler's motion for assignment and to amend the complaint. ECF No. 130. As a result of this order, all claims that WWNC had against State Farm were transferred to Muhler in partial satisfaction of the default judgment against WWNC. ECF No. 130.

         On November 4, 2016, Muhler and WWNC filed a third-party complaint against State Farm, alleging claims for bad faith, breach of contract, and declaratory judgment.

         ECF No. 132. This third-party complaint was premised on State Farm's initial determination that there was coverage under WWNC's commercial general liability policy (the “policy”) and subsequent refusal to defend or indemnify WWNC. ECF No. 132 at 1. On December 27, 2016, State Farm filed a motion to strike or in the alternative to dismiss the third-party complaint, and for the court to reconsider its September 2016 order granting Muhler's motion for assignment and to amend. ECF No. 135. Muhler filed a response on January 20, 2017, ECF No. 138, to which State Farm replied on February 6, 2017, ECF No. 143. The motion has been fully briefed and is now ripe for the court's review.

         II. STANDARDS

         A. Motion to Strike

         Rule 12(f) of the Federal Rules of Civil Procedure provides that “[t]he court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f). “Rule 12(f) motions are generally viewed with disfavor ‘because striking a portion of a pleading is a drastic remedy and because it is often sought by the movant simply as a dilatory tactic.'” Waste Mgmt. Holdings, Inc. v. Gilmore, 252 F.3d 316, 347 (4th Cir. 2001) (quoting 5A Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1380 (2d ed.1990)).

         B. Motion to Dismiss

         A Rule 12(b)(6) motion for failure to state a claim upon which relief can be granted “challenges the legal sufficiency of a complaint.” Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009) (citations omitted); see also Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir.1992) (“A motion to dismiss under Rule 12(b)(6) . . .does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.”). To be legally sufficient, a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A Rule 12(b)(6) motion should not be granted unless it appears certain that the plaintiff can prove no set of facts that would support his claim and would entitle him to relief. Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). When considering a Rule 12(b)(6) motion, the court should accept all well-pleaded allegations as true and should view the complaint in a light most favorable to the plaintiff. Ostrzenski v. Seigel, 177 F.3d 245, 251 (4th Cir. 1999); Mylan Labs., Inc., 7 F.3d at 1134.

         C. ...

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