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Design Basics, LLC v. Henderlong Homes LLC

United States District Court, N.D. Indiana, Fort Wayne Division

March 11, 2019

DESIGN BASICS, LLC, Plaintiff,
v.
HENDERLONG HOMES LLC; HENDERLONG CONSTRUCTION, INC.; CP PARTNERS, LLC; F & H PROPERTIES II, INC; and DK HOMES, LLC, Defendant.

          OPINION AND ORDER

          THERESA L. SPRINGMANN CHIEF JUDGE

         This matter is before the Court on the Defendant's, DK Homes (DK), Motion to Dismiss Involuntarily [ECF No. 92] pursuant to Federal Rule of Civil Procedure 41(b). For the reasons stated below, the Court DENIES the Defendant's Motion.

         BACKGROUND

         The Plaintiff, Design Basics LLC, filed a Complaint [ECF No. 1] against numerous Defendants, including DK, on July 9, 2016. The Plaintiff alleges that DK infringed upon its copyrights to certain house plans. On September 6, 2018, the Plaintiff filed a Joint Motion to Dismiss [ECF No. 87] its claims against the Defendants and noted that DK objected. DK argued in its Opposition to the Joint Motion to Dismiss without Prejudice [ECF No. 88] that it did not agree to a dismissal without prejudice and that it should be dismissed with prejudice. (Def. DK's Resp. in Opp. to Mot. to Dismiss at 2.) The Court subsequently granted, in part, the Joint Motion to Dismiss and dismissed with prejudice Defendants Henderlong Homes LLC, Henderlong Construction, Inc., CP Partners LLC, and F&H Properties II, Inc., [ECF No. 91]. The Court noted DK's objection and withheld ruling. (Id.)

         On December 13, 2018, DK filed a Motion to Dismiss Involuntarily pursuant to Federal Rule of Civil Procedure 41(b) [ECF No. 92]. On January 10, 2019, the Plaintiff filed a response [ECF No. 95] and on January 15, 2019, DK filed a reply [ECF No. 96]. The matter is now ripe for review.

         LEGAL STANDARD

         Rule 41(b) allows a court to dismiss an action, upon motion, “if the plaintiff fails to prosecute or to comply with these rules or a court order.” Id. Before the district court imposes a Rule 41(b) dismissal, it must consider five factors: 1) whether the wrongdoer (or her counsel) received “due warning” that such a sanction was a possibility; 2) the frequency and magnitude of the wrongdoer's failure to comply with deadlines and other court orders; 3) the efficacy of less severe sanctions; 4) whether the misconduct prejudiced the other party or other litigants on the court's docket; and 5) the likely merits of the wrongdoer's case. Graham v. Schomaker, 215 F.3d 1329 (7th Cir. 2000).

         In ruling on a Rule 41(b) motion, the court must take an unbiased view of all the evidence, direct and circumstantial, and accord it such weight as the court believes it is entitled to receive.” Sanders v. Gen. Servs. Admin., 707 F.2d 969, 971 (7th Cir. 1983) (citing Patterson v. Gen. Motors Corp., 631 F.2d 476, 487 (7th Cir. 1980), cert. denied, 451 U.S. 914 (1981)); accord, Lee Tool & Mould, Ltd. v. Fort Wayne Pools, Inc., 791 F.2d 605, 610 n.7 (7th Cir. 1986). A Rule 41(b) dismissal is a “drastic remedy, ” O'Rourke Bros., Inc. v. Nesbitt Burns, Inc., 201 F.3d 948, 953 (7th Cir. 2000) and a “harsh sanction” that should “be employed only as a last resort.” Rice v. City of Chicago., 333 F.3d 780, 786 (7th Cir. 2003).

         ANALYSIS

         DK argues that dismissal with prejudice pursuant to Rule 41(b) is appropriate as: (i) the matter has been pending for over two years and the parties have completed discovery; (ii) the Plaintiff has excessively delayed the case and demonstrated a lack of diligence; and (iii) the Plaintiff's explanation for seeking dismissal without prejudice is insufficient. The Plaintiff contends that DK's Motion is procedurally frivolous and that there is no basis to dismiss the case pursuant to Rule 41(b). The Plaintiff also requests that the Court order the Defendant to pay the Plaintiff's fees incurred in responding to its Motion.

         A. Warning Sanction was Possibility

          The Defendant admits that the Court did not warn the Plaintiff that a dismissal was imminent. (Def.'s Mot. for Involuntary Dismissal at 2-3.) The Defendant argues that the Plaintiff had constructive warning that dismissal could occur because it filed a Joint Motion to Dismiss in regard to the other parties. (Id.) The Defendant is correct that the Court does not need to provide an explicit warning regarding dismissal. Fischer v. Cingular Wireless, LLC, 446 F.3d 663, 665 (7th Cir. 2006). The Defendant does present a colorable argument that the Plaintiff was warned that dismissal was imminent. An explicit warning from the Court that a plaintiff's case may be dismissed for failure to prosecute is not required, particularly when this notice comes from another party. See Martinez v. Cty. Of Porter, Indiana, No. 2:15-CV-35, 2016 WL 6996045, at *2 (N.D. Ind. Nov. 30, 2016). This factor, however, is not solely dispositive and the Court must consider other relevant factors. Ball v. City of Chicago, 2 F.3d at 759-60 (7th Cir. 1993).

         B. Frequency and Magnitude of Failures to Comply with Deadlines

         The Defendant argues that the Plaintiff failed to comply with Court's orders in its failure to file Court-ordered joint status reports or dismissals. (Def.'s Mot for Involuntary Dismissal at 4.) The Defendant states that the Court directed the parties to file a Joint Status Report or dismissal papers on or before September 9, 2018, none of which were filed. (Id.) The Defendant also states that the Court ordered a telephonic status conference for September 12, 2018 that would be vacated if a joint status report or dismissal papers were filed before that date. (Id. at 3.) The Defendant states that no such papers were filed and the Plaintiff instead filed a Joint Motion to Dismiss that misrepresented the Defendant's position. (Id.) The Plaintiff argues that the Defendant only points to a single instance in which the Plaintiff ...


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