Opinion
Case No. 02-2332-JAR
March 19, 2003
ORDER GRANTING PLAINTIFF'S MOTION TO DISMISS WITHOUT PREJUDICE
This matter is presently before the court upon Plaintiff Prairie State Bank's motion to dismiss without prejudice (Doc. 25). Defendant objects to dismissal without prejudice (Doc. 28). For the reasons set forth in detail below, Plaintiff's motion is granted and this case is dismissed without prejudice, subject to conditions.
Facts
Plaintiff has been in the banking business in Kansas for more than eighty years and has its primary location in Augusta, Kansas. Plaintiff took steps to protect its service mark by obtaining federal registration for its name in 1987. The federal registration for Plaintiff has since become incontestable under federal law. In approximately March 2002, Plaintiff's Chairman of the Board (chairman) became aware that a bank in Olathe, Kansas, recently had adopted the name Prairie Star Bank, and had filed a federal service mark application for this name in January 2002. On March 8, 2002, Plaintiff's counsel informed Prairie Star Bank that the use of its name was infringing on Plaintiff's trademark. On May 6, 2002, Plaintiff received Prairie Star Bank's response, that it would be changing its name to Bank of the Prairie. But Plaintiff believed that the name "Bank of the Prairie" was also too similar to Plaintiff's name, and would result in confusion between the two banks. The two parties were unable to resolve their dispute over the newly chosen name and in July 2002, Plaintiff filed this action.
Plaintiff's chairman, who is also the majority shareholder, has been intimately involved in the daily operations of Plaintiff for more than 40 years. The chairman is a "key witness" in this action and in a "key decision making position with respect to issues arising in this lawsuit," because of the chairman's knowledge and involvement in the events leading up to this lawsuit.
At the time Plaintiff filed this action, it knew that its chairman had cancer. Since that time, the chairman's health has deteriorated. He has a severe form of cancer at a relatively advanced stage. He is unable to participate in the daily operations of Plaintiff; he is absent for long periods of time as he undergoes ongoing intensive radiation and chemotherapy at M.D. Anderson in Texas. Because of his illness and absence, the chairman's responsibilities have been shifted to other officers and directors of the bank. And, without the chairman's involvement, Plaintiff has been unable to respond to Defendant's interrogatories or otherwise effectively prosecute this case.
Discussion
Fed.R.Civ.P. 41(a)(2) governs voluntary dismissals after the opposing party has filed an answer or motion for summary judgment. Once a defendant has filed an answer, as was the case here, a plaintiff may voluntarily dismiss an action only upon order of the court. Rule 41(a)(2) "is designed `primarily to prevent voluntary dismissals which unfairly affect the other side, and to permit the imposition of curative conditions.'" Absent "legal prejudice" to the defendant, the district court normally should grant such a dismissal.
Clark v. Tansy, 13 F.3d 1407, 1411 (10th Cir. 1993) (quoting Alamance Indus., Inc. v. Filene's, 291 F.2d 142, 146 (1st Cir. 1961)).
Ohlander v. Larson, 114 F.3d 1531, 1537 (10th Cir. 1997).
The parameters of what constitutes "legal prejudice" is not completely clear, but factors the Tenth Circuit have deemed appropriate for consideration include 1) the opposing party's effort and expense in preparing for trial; 2) excessive delay and lack of due diligence on the part of the movant; 3) insufficient explanation of the need for a dismissal; and 4) the present stage of the litigation. Each factor does not have to favor the moving party for dismissal to be appropriate, nor does each factor need to favor the opposing party for denial of the motion to be proper. And, this ". . . list of factors is not exclusive and the court is free to, and should, also consider any other relevant factors." "The district court should endeavor to insure substantial justice is accorded to both parties."
Id. (citing Phillips USA, Inc. v. Allflex USA, Inc., 77 F.3d 354, 358 (10th Cir. 1996)).
Id.
Kansas Waste Water, Inc. v. Alliant Techsystems, Inc., No. 01-2236-JWL, 2002 WL 1634362 (D.Kan. May 31, 2002).
Ohlander, 114 F.3d at 1537.
Plaintiff seeks dismissal of this action early in the litigation, about eight months after Plaintiff filed this action. Little discovery has been accomplished to date. In fact, Plaintiff was prompted to seek dismissal, in part, by its own inability to respond to Defendant's interrogatories. And although depositions were scheduled, they have been postponed. Neither party has expended substantial time or money at this stage of the litigation.
Although Plaintiff's chairman was sick at the time this action was filed, since then his condition has deteriorated, and his intensive treatment in Texas has denied Plaintiff the involvement of its key witness and key decision maker with respect to this action. At the time Plaintiff filed this action, it could not predict that the chairman's condition would worsen to the extent that his services would not be available in prosecution of this action.
The four factors weigh in favor of dismissal. Defendant nevertheless contends that it will suffer legal prejudice, because having changed its name once, to Plaintiff's continued dissatisfaction, Defendant now ". . . will continue to face a cloud over its name, as well as its goodwill and brand identity, or not knowing whether the plaintiff will renew its action and be successful in obtaining an injunction prohibiting the defendant from using its name at a future point in time." But, the mere prospect of a second lawsuit against the defendant, or a tactical advantage to the plaintiff, amounts to legal prejudice. Defendant is in no different position than it would have been had Plaintiff waited to file this action. Defendant would have still suffered some period of uncertainty of the prospect of a future lawsuit. This period of uncertainty will end within a time certain, for the statute of limitations will preclude this lawsuit after a period of time.
American Nat. Bank and Trust Co. v. Bic Corp., 931 F.2d 1411, 1412 (10th Cir. 1991).
Defendant is also concerned about not being able to preserve the testimony of Plaintiff's chairman. However, given the reported current condition of his health, it appears that the chairman's deposition cannot be taken at this time. Thus, conditioning the dismissal of this action on the taking of his deposition at this time, is not reasonable. On the other hand, if Plaintiff refiles this action, and if the chairman is still a witness or decision maker, then to avoid any prejudice to Defendant, Plaintiff should make the chairman available to Defendant for deposition no later than 30 days after Plaintiff serves Defendant. This will avoid any prejudice that Defendant might suffer from being denied discovery from the key witness and decision maker in a second lawsuit.
Therefore the Court will dismiss this action without prejudice, subject to the following conditions:
(1) If Plaintiff refiles its claim(s), it shall make the chairman (the person referenced in this lawsuit) available for deposition, no later than 30 days after Plaintiff serves Defendant with the lawsuit, or at such later time as Defendant requests. Defendant will give Plaintiff reasonable notice of the date and time of its deposition of the chairman.
(2) Failure to abide by these conditions shall convert this dismissal without prejudice into a dismissal with prejudice.
Because Plaintiff has the right to withdraw its motion to dismiss when the conditions imposed by the court seem too onerous, the Court gives plaintiffs until March 31, 2003, to withdraw its motion for dismissal without prejudice. If Plaintiff does not withdraw its motion, then this order granting its motion on the above conditions will take effect. If Plaintiff does withdraw its motion, this order will have no effect on the parties and the matters addressed herein.
IT IS SO ORDERED.