The opinion of the court was delivered by: MCGOHEY
The Court has before it a series of motions in two actions between essentially the same parties. The motions involved in the second action will be considered first. They are plaintiff's motions directed to the answer and defendants' motion to compel a reply to affirmative defenses.
The Motions Directed to the Answer.
The complaint here asserts six claims or causes of action in an action which plaintiff's memorandum characterizes as one 'for unfair competition and breach of the terms of trust and contract upon which defendant A. Maschmeijer, Jr., Inc. held the trade secrets and processes which had been entrusted to it by the Dutch partnership.'
Plaintiff moves under Fed. Rules Civ. Proc. rule 12(f), 28 U.S.C.A., to strike for insufficiency the first four affirmative defenses and the two counterclaims.
'Motions to strike out are not to be freely granted * * *, and no deletions will be made unless it is clear that the allegations are without the issues * * *. Moreover, the movant should show that he will be prejudiced if the attacked allegations are left in the pleading. * * * Finally, a motion to strike a defense will be denied if the defense presents a bona fide question of law or fact which should be heard on its merits. * * *'
'If the allegations attacked are such that under some contingency they may raise relevant issues, they will not be stricken. * * *'
The first defense pleads laches. Under New York law the availability of that defense depends upon whether the plaintiff has an absolute right to the relief sought or whether he seeks to invoke the favor or discretion of a court of equity. It is only in the latter case that laches constitute a sufficient defense.
Merely to state the law of New York is to demonstrate that in an action for unfair competition, breach of trust and contract a defense of laches may raise relevant issues. The defense here is based upon the fact that the action was not brought until after the death of the president of the two defendant corporations who is alleged to have been the only one familiar with the transactions involved in the action. Failure to assert a claim until after the death of a witness and the resultant difficulty of proof may in appropriate circumstances constitute laches.
Consequently, the motion to strike the first defense is denied.
The second defense pleads accord and satisfaction and is conceded by defendants' counsel to be directed to the third, fourth, fifth and sixth causes although the answer itself does not so limit it. This defense is based upon a release dated January 8, 1938. Plaintiff asserts that the defense is partial because it can have effect neither with respect to transactions about which it had no knowledge when the release was executed nor with respect to the transactions alleged in the four causes to have occurred subsequent to the release. From this it argues that the defense is bad and should be stricken because it is not a complete plea in bar- because it 'professes to answer an entire count and answers only a part thereof.'
The cases cited in support of this proposition
were decided between 1901 and 1911. There is no indication that the technical niceties there enshrined were carried over and embodied in the Federal Rules of Civil Procedure which were designed to liberalize pleadings and are to be liberally construed. In the absence of clear authority supporting plaintiff's contention, the motion to strike this defense is denied.
The third defense pleads estoppel. It raises the issue- certainly, a relevant one- of the extent to which performance of the 1937 contract by plaintiff was a condition to the obligations of the defendants. Plaintiff's argument that the defense is insufficient as not being a complete plea in bar has already been rejected. The motion to strike this defense is accordingly denied.
The fourth defense pleads that the agreements pleaded in all six causes of action 'were and are illegal, contrary to public policy and void' as restraints on trade. Whether or not the restrictions contained in the agreements are bad as restraints on trade depends upon whether or not they are reasonable.
The defense raises the issue of reasonableness which cannot be determined on the pleadings. Consequently, the motion to strike the fourth defense is denied.
The motion to strike the first counterclaim is denied.
Plaintiff's objection to the failure to allege compliance with the contract has been remedied by amendment. For the purposes of this motion the allegations sufficiently support a claim for discovery, accounting and damages.
The motion to strike the second counterclaim is denied. Defendant's failure to allege inadequacy of its legal remedy has been remedied by amendment. Determination of its claim for a permanent injunction cannot be made until all the facts have been developed at the trial.
Plaintiff's alternative motions directed to the first four affirmative defenses are denied. Defendants have stated the causes of action to which the defenses are directed and the defendants on whose behalf they are pleaded. The allegations are within the issues and although they may not be precisely called concise there is no showing that plaintiff will be ...