United States District Court, D. Kansas
SNYDER INSURANCE SERVICES, INC. and RAYMOND F. SNYDER, Plaintiffs,
KULIN-SOHN INSURANCE AGENCY, INC. and MARK R SOHN, Defendants.
MEMORANDUM AND ORDER
D. Crabtree United States District Judge.
October 15, 2018, plaintiffs filed a Motion for Voluntary
Dismissal Without Prejudice under Federal Rule of Civil
Procedure 41(a)(2). Doc. 45. Defendants filed a Response
(Doc. 47) opposing plaintiffs' motion. And plaintiffs
filed a Reply (Doc. 50). Defendants argue that the court
should deny plaintiffs' motion entirely. Alternatively,
defendants argue that the court should impose conditions on
dismissal-namely, awarding defendants their costs and
attorneys' fees. After considering the parties'
arguments and the relevant law, the court grants
plaintiffs' motion to dismiss without prejudice, but
imposes certain conditions.
Snyder Insurance is an insurance brokerage company, which
specializes in insuring amateur sports and children's
fitness centers across the country. Plaintiff Raymond Snyder
owns Snyder Insurance and serves as president and as an agent
for the company. Defendant Kulin-Sohn is an Illinois-based
insurance company, owned by defendant Mark R. Sohn.
Plaintiffs have sued defendants for defamation and tortious
interference with prospective business relations. In short,
plaintiffs allege that defendants told several of
plaintiffs' clients that plaintiffs had lied to them,
misled them about their insurance coverage, and misled other
gyms about their insurance coverage. As a result, plaintiffs
contend that these clients did not renew their policies with
plaintiffs, causing lost business, commissions, and broker
case has progressed very little since plaintiffs filed it
more than two years ago. Plaintiffs filed suit in state court
in 2016. On August 1, 2016, defendants removed to this court.
Doc. 1. Plaintiffs twice have amended their Complaint (Docs.
5, 32), and defendants have moved to dismiss four times
(Docs. 3, 6, 12, 33). After the court's Memorandum and
Order denying defendants' most recent Motion to Dismiss,
defendants filed an Answer on June 20, 2018. Doc. 39. So, in
about two years, the parties have completed the pleading
stage-at least for now.
Judge Gerald L. Rushfelt issued a Revised Scheduling Order
(Doc. 35) on March 26, 2018. Judge Rushfelt set trial for
July 9, 2019. He directed the parties to complete all
discovery by November 2, 2018, and file all dispositive
motions by November 9, 2018. Doc. 35 at 1. And, the Order
directed plaintiffs to disclose their experts by May 18,
October 15, 2018, plaintiffs filed a Motion for Voluntary
Dismissal Without Prejudice (Doc. 45). Defendants filed a
Response (Doc. 47) on November 5, 2018. Two days later,
defendants also filed a Motion for Summary Judgment (Doc.
48). Plaintiffs filed a Reply (Doc. 50) to defendants'
Response and then filed an Unopposed Motion for Extension of
Time of Motion for Stay or Extension of Summary Judgment
Briefing (Doc. 51). The court granted the Unopposed Motion
and then extended plaintiffs' deadline to 21 days after
the court rules on plaintiffs' Motion for Voluntary
Dismissal Without Prejudice to file their Response to
defendants' Motion for Summary Judgment, assuming the
court's ruling on plaintiffs' Motion does not moot
defendants' Motion for Summary Judgment.
41(a)(2) provides that the court may allow a plaintiff to
dismiss an action voluntarily “on terms the court
considers proper.” Fed.R.Civ.P. 41(a)(2). “The
rule is designed primarily to prevent voluntary dismissals
which unfairly affect the other side, and to permit the
imposition of curative conditions.” Phillips USA,
Inc. v. Allflex USA, Inc., 77 F.3d 354, 357 (10th Cir.
1996) (quotation omitted). So, “[a]bsent ‘legal
prejudice' to the defendant, the district court normally
should grant such a dismissal.” Ohlander v.
Larson, 114 F.3d 1531, 1537 (10th Cir. 1997) (first
citing Am. Nat'l Bank & Trust Co. v. Bic
Corp., 931 F.2d 1411, 1412 (10th Cir. 1991); then citing
McCants v. Ford Motor Co., 781 F.2d 855, 856-57
(11th Cir. 1986)).
legal authorities don't provide a clear definition of
“legal prejudice, ” but the Tenth Circuit has
directed district courts to consider the following list of
non-exhaustive factors as a starting point: (1) the opposing
party's effort and expense in preparing for trial; (2)
excessive delay and lack of diligence on the part of the
movant; (3) insufficient explanation of the need for a
dismissal; and (4) the present stage of the litigation.
Id. (citing Phillips U.S.A., 77 F.3d at
358). The court may consider other factors. Id.
“Each factor need not be resolved in favor of the
moving party for dismissal to be appropriate, nor need each
factor be resolved in favor of the opposing party for denial
of the motion to be proper.” Id. (citing
Phillips U.S.A., 77 F.3d at 358).
legal prejudice “does not arise simply because a second
action has been or may be filed against the defendant, which
is often the whole point in dismissing a case without
prejudice.” Brown v. Baeke, 413 F.3d 1121,
1124 (10th Cir. 2005) (citing Am. Nat'l Bank
& Trust Co., 931 F.2d at 1412). Ultimately,
“‘the district court should endeavor to insure
substantial justice is accorded to both parties, and
therefore the court must consider the equities not only
facing the defendant, but also those facing the
plaintiff.'” Lienemann v. Glock, Inc., No.
08-2484, 2009 WL 1505542, at *2 (D. Kan. May 27, 2009)
(quoting Cty. of Santa Fe v. Pub. Serv. Co., 311
F.3d 1031, 1048 (10th Cir. 2002)).
considering the relative equities and endeavoring to insure
substantial justice, the court may impose “terms and
conditions as the court deems proper.” Brown,
413 F.3d at 1123 (internal citation omitted). Any
“conditions should keep the parties in the same
position in a subsequent lawsuit that they occupied before
the plaintiff filed its motion to dismiss.”
AgJunction LLC v. Agrian Inc., No.
14-CV-2069-DDC-KGS, 2015 WL 416444, at *4 (D. Kan. Jan. 30,
2015) (citing Pyles v. Boeing Co., 109 Fed.Appx.
291, 294 (10th Cir. 2004)). If the court imposes conditions
on dismissal, the “moving party must be given a
reasonable opportunity to withdraw his motion if he finds
those conditions unacceptable or too onerous.”
Gonzales v. City of Topeka, 206 F.R.D. 280, 283 (D.
Kan. 2001) (internal citations and quotations omitted).
Legal Prejudice Analysis
court first must determine whether defendants will sustain
legal prejudice if it dismisses the case without prejudice.
Without a finding of legal prejudice, the court should
dismiss. Ohlander, 114 F.3d at 1537. The parties ask
the court to consider six factors: (1) the defendants'
effort and funds expended towards preparing for trial; (2)
the plaintiffs' undue delay or lack of diligence in
prosecuting the action; (3) the adequacy of the
plaintiffs' explanation for needing to dismiss; (4) the
plaintiffs' diligence in moving to dismiss; (5) the
present stage of litigation; and (6) duplicative expenses
involved in a likely second suit. Doc. 47 at 3; Doc. 50 at 4;
see also Nunez v. IBP, Inc., 163 F.R.D. 356, 359 (D.
Kan. 1995). The court will consider these six relevant
factors here, below.
The Opposing Party's Effort and Expense in Preparing for
Trial and the Likelihood of Duplicative Expenses
court first addresses these two factors together. Plaintiffs
contend that defendants have made no showing of effort or
funds expended toward actual trial preparation. Defendants
argue that they have made extensive efforts in preparing for
trial, including marshaling significant evidence that refutes
plaintiffs' claims. Doc. 47 at 3. Defendants also filed a
Motion for Summary Judgment (Doc. 48) a little over three
weeks after plaintiffs filed their Motion for Voluntary
Dismissal Without ...