Ogden v. Receivables Performance Management, LLC

          OPINION AND ORDER

          THERESA L. SPRINGMANN, CHIEF JUDGE UNITED STATES DISTRICT COURT

         This matter is before the Court on the Plaintiff's, Tamika Nicole Ogden, Motion to Dismiss Her Filed Complaint [ECF No. 34], pursuant to Federal Rule of Civil Procedure 41(a)(2).

         BACKGROUND

         The Plaintiff filed her Complaint [ECF No. 1] on December 20, 2016, alleging that the Defendant, Receivables Performance Management, LLC, violated the Fair Debt Collection Practices Act (FDCPA), the Telephone Consumer Protection Act (TCPA), and the Indiana Deceptive Consumer Sales Act. The Defendant filed an Answer [ECF No. 20], and the parties engaged in discovery and mediation. On January 24, 2018, the Defendant filed a Motion for Summary Judgment [ECF No. 32].

         On February 21, 2018, the Plaintiff filed Plaintiff's Motion to Dismiss Her Filed Complaint [ECF No. 34] pursuant to Federal Rule of Civil Procedure 41(a)(2), seeking dismissal with prejudice. The Plaintiff states that she determined that dismissing this matter with prejudice would be appropriate and attempted to draft a stipulation of agreed dismissal with the Defendant. (Pl.'s Mot. to Dismiss at 1.) The Defendant filed an Opposition to Motion to Dismiss [ECF No. 35], and the Plaintiff filed a Reply in Support [ECF No. 36]. The matter is now ripe for review.

         LEGAL STANDARD

         Under Federal Rule of Civil Procedure 41(a)(2), a plaintiff may request that the Court dismiss her claim, without the consent of the other parties in the action, on terms that the court considers proper. Fed.R.Civ.P. 41(a)(2). After service of an answer or motion for summary judgment, the Court enjoys wide discretion in considering Rule 41 motions. Under these circumstances, dismissal is not automatic, and the Court, in its discretion, may issue an order dismissing the case. Id. As a result, the Court's chief concern in deciding whether and on what terms to grant a Rule 41(a)(2) dismissal should be fairness to the defendant, who in theory has not consented to the dismissal. See Tyco Labs, Inc. v. Koppers Co., Inc., 627 F.2d 54, 56 (7th Cir. 1980). In such cases, the plaintiff bears the burden of persuasion. Tolle v. Carroll Touch, Inc., 23 F.3d 174, 177 (7th Cir. 1994) (citing FDIC v. Knostman, 966 F.2d 113, 1142 (7th Cir. 1992)). Dismissal under Rule 41(a)(2) is without prejudice, unless otherwise ordered by a court, and this suggests that the terms and conditions of dismissal should be for a defendant's benefit. McCall-Bey v. Franzen, 777 F.2d 1178, 1184 (7th Cir. 1985) (stating that the terms and conditions “are the quid for the quo of allowing the plaintiff to dismiss his suit without being prevented by the doctrine of res judicata from bringing the same suit again”).

         A court would abuse its discretion if it were to permit voluntary dismissal where the defendant would suffer plain legal prejudice as a result. Wojtas v. Capital Guardian Tr. Co., 477 F.3d 924, 927 (7th Cir. 2007). In deciding whether to grant a Rule 41(a)(2) motion to dismiss, a court may look at a variety of factors, including: (1) a defendant's effort and resources already expended in preparing for trial; (2) excessive delay and lack of diligence on the part of the plaintiff in prosecuting the action; (3) insufficient explanation for the need of a dismissal; and (4) whether a summary judgment motion has been filed by the defendant. Tyco Labs, Inc., 627 F.2d at 56. These factors, however, are guidelines and are not mandates. Id.

         ANALYSIS

         The Defendant argues that dismissal will result in legal prejudice and that it is entitled to fees and costs pursuant to 28 U.S.C. § 1927, due to the Plaintiff's bad faith conduct during litigation. The Plaintiff argues that there is no legal prejudice and the Defendant is not entitled to fees or cost.

         A. Rule 41(a)(2) Factors

          The Defendant states that dismissal pursuant to Rule 41(a)(2) is inappropriate and will result in plain legal prejudice because the dismissal is: (i) sought late in the litigation; (ii) the purpose is to avoid an adverse determination on the merits of the action and deny the Defendant an opportunity to adjudicate the issue; and (iii) a voluntary dismissal will deprive the Defendant of its right to seek prevailing party fees and costs. (Def.'s Resp. at 4.) The Plaintiff responds that the Defendant's arguments do not constitute a showing of legal prejudice, as the costs of defending or prosecuting a lawsuit are not “legal prejudice” as Rule 41 contemplates. (Pl.'s Reply at 3.)

         “In exercising its discretion the court follows the traditional principle that dismissal should be allowed unless the defendant will suffer some plain legal prejudice other than the mere prospect of a second lawsuit.” Stern v. Barnett, 452 F.2d 211, 213 (7th Cir. 1971) (quoting 2B Barron and Holtzoff, Federal Practice and Procedure § 912, p. 167 (Wright ed. 1961)). Plain legal prejudice may result from “the defendant's effort and expense of preparation for trial, excessive delay and lack of diligence on the part of the plaintiff in prosecuting the action, insufficient explanation for the need to take a dismissal, and the fact that a motion for summary judgment has been filed by the defendant.” Tyco Labs., Inc., 627 F.2d at 56 (quoting Pace v. S. Express Co., 409 F.2d 331 (7th Cir. 1969)). Plain legal prejudice, however, is “more clearly shown where the defendant has filed a counterclaim prior to the time that plaintiff has moved to dismiss, a circumstance which is specifically covered by the language of the Rule.” Id. The Defendant has no counterclaim or circumstance specifically covered by the language of Rule 41. Rather, the Defendant argues that the efforts it expended in discovery and its pending Motion for Summary Judgment constitute legal prejudice. The question for the Court then is whether any of the Defendant's alleged harms align with the guidelines the Seventh Circuit outlined in Tyco.

         In the first instance, discovery in this matter has not been so extensive as to be tantamount to plain legal prejudice that would preclude dismissal. Though the Defendant argues that the Plaintiff's production was scant, both the parties exchanged discovery. The Plaintiff appeared for a deposition and deposed the Defendant and vice versa. These facts are readily distinguishable from the cases the Defendant cited in support of its argument that it will suffer legal prejudice- Tolle v. Carroll Touch, Inc., 23 F.3d 174, 177 (7th Cir. 1994), and Kapoulas v. Williams Ins. Agency, Inc., 11 F.3d 1380, 1383 (7th Cir. 1993). The litigation in Tolle had been pending for four years, discovery had been completed for approximately twenty-two months, and the district court had limited the contested issues in the matter by granting a partial summary judgment motion. Tolle, 23 F.3d at 177-78. In this case, the Plaintiff's Motion to Dismiss was filed less than two years after the commencement of litigation, discovery was completed less than a year [ECF No. 28] before the Plaintiff filed the motion, and no summary judgment ruling has limited the scope of the issues. ...