Dubai Equine Hospital v. Equine Imaging, LLC
1:18-cv-06925
S.D.N.Y.Aug 14, 2019Background
- Plaintiff Dubai Equine Hospital (based in Dubai) contracted with Defendants Equine Imaging, LLC and George Papaioannou to buy a CT scanner for $995,500 that could image all parts of a horse while moving; Plaintiff paid a ~$550,000 deposit.
- Plaintiff alleges Defendants misrepresented the scanner’s commercial viability, stability, and delivery date; machine was not delivered by the promised June 2015 date and final product did not meet contractual specifications.
- Plaintiff alleges additional “Systemic Fraud” — that Defendants used the same misrepresentations and false delivery dates to defraud numerous other customers and distributors across several U.S. states.
- Defendants moved under Fed. R. Civ. P. 12(f) to strike the Systemic Fraud allegations as inflammatory, prejudicial, and irrelevant character evidence.
- The Court treated the complaint allegations as true for the motion-to-strike stage and framed the legal question as whether no admissible evidence could support the Systemic Fraud allegations.
- The Court denied the motion to strike, finding defendants failed to show that none of the Systemic Fraud evidence would be admissible for permissible purposes (e.g., intent, knowledge, or to show recurring deceptive practices relevant to a GBL § 349 claim).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Systemic Fraud allegations should be stricken under Rule 12(f) | Allegations are relevant and plead misconduct against multiple victims; such evidence may show intent/knowledge and support GBL § 349 claim | Allegations are conclusory, inflammatory, and constitute impermissible character evidence and prejudice | Denied — defendants did not show that no admissible evidence could support the allegations; allegations may be admissible for permissible purposes and for GBL § 349’s public‑impact element |
Key Cases Cited
- Kehr ex rel. Kehr v. Yamaha Motor Corp., U.S.A., 596 F. Supp. 2d 821 (S.D.N.Y. 2008) (motions to strike disfavored; matter must clearly have no bearing on dispute)
- Roe v. City of New York, 151 F. Supp. 2d 495 (S.D.N.Y. 2001) (defendant must show no admissible evidence would support the challenged allegations to prevail on a Rule 12(f) motion)
- Lipsky v. Commonwealth United Corp., 551 F.2d 887 (2d Cir. 1976) (Rule 12(f) relief inappropriate unless no evidence in support would be admissible)
- Riordan v. Nationwide Mut. Fire Ins. Co., 977 F.2d 47 (2d Cir. 1992) (GBL § 349 requires recurring conduct or ramifications for the public; evidence of similar deceptive practices against others may be relevant)
- Kassner v. 2nd Ave. Delicatessen Inc., 496 F.3d 229 (2d Cir. 2007) (court may assume complaint allegations true for motion-to-dismiss/strike procedural posture)