Opinion
Case No. 5:00-CV-128.
February 23, 2001.
OPINION
Plaintiffs, Elijah Black and Johnnie M. Black (the "Blacks"), filed this action against Defendant Colt Meadows Homeowners Association (the "Association") and its board members, Timothy Selfridge, Karen Evans, Michael Host, Patricia Host, Regina Root, Thomas Banger, and Diane Banger (collectively the "Board Members"), alleging that Defendants violated the Fair Housing Amendments Act of 1988, Pub.L. 100-430, 102 Stat. 1619, amending 42 U.S.C. § 3601-3619; 42 U.S.C. § 1982 and 1983; the Michigan Persons With Disabilities Civil Rights Act, M.C.L. §§ 37.1101 to .1607; and the Michigan Elliott-Larsen Civil Rights Act, M.C.L. §§ 37.2101 to .2804, by filing an action in state court and denying their request for an accommodation. Now before the Court is the Blacks' motion to dismiss without prejudice and without costs.
Facts
The Blacks own a house in the Colt Meadows Subdivision located in Lansing, Michigan. The property within Colt Meadows Subdivision is subject to the rules and restrictions of the Association. Prior to September 20, 1999, the Blacks constructed a concrete walkway/patio, a shed, and a second concrete driveway on their lot (the "improvements"). On or about September 20, 1999, the Association filed a lawsuit in Eaton County Circuit Court (the "State Court Action") alleging that the Blacks had violated the Association's rules and restrictions by constructing the improvements on their lot. On January 28, 2000, the Blacks submitted a written request to the Association to build a wheelchair access ramp from their back door to the second paved driveway in order to accommodate Plaintiff Elijah Black, who has a herniated disc, as well as his mother, who is confined to a wheelchair. In response to the request, the Association moved for a temporary restraining order in the State Court Action enjoining the Blacks from constructing a ramp connected to or using the improvements. On March 2, 2000, following a hearing on the motion, Circuit Court Judge Calvin Osterhaven granted the motion and entered an order enjoining the Blacks from building an access ramp connected to the improvements.
On February 7, 2000, the Blacks filed a complaint with the United States Department of Housing and Urban Development ("HUD") alleging that the Association discriminated against the Blacks because of their race (African American) and failed to grant the requested accommodation (the ramp) as required by federal law. On April 27, 2000, the Blacks' attorney in the State Court Action filed a motion to amend the pleadings to add a discrimination counterclaim. On May 4, 1999, Judge Osterhaven held a hearing on the Association's and Board Members' motion for summary disposition and on the Blacks' motion to amend. The final pretrial conference was also held at that time. Rather than proceeding with the hearing and pretrial conference, counsel for both sides agreed to discuss a settlement. After three hours of discussion, the parties reached a tentative settlement. The parties did not place the settlement on the record because Judge Osterhaven granted the Blacks' request for time to consider the proposal over the weekend. The following Monday, the parties appeared back in court, and their counsel engaged in further negotiations after the Blacks' attorney informed the Association's attorney that the Blacks would not agree to the terms of the previous settlement. After several more hours of discussion, the parties agreed to a new settlement, the terms of which were placed on the record in open court by the Blacks' counsel.
One of the terms of the settlement required the Blacks to dismiss their civil rights complaint filed with HUD. In addition, the Blacks' counsel withdrew the motion to amend to add a counterclaim for violation of the Blacks' civil rights.
Subsequent to putting the settlement on the record, the parties' counsel attempted to draft an acceptable settlement agreement. After several weeks of work on a final written agreement, the parties agreed on a final document. However, in late August or early September, the Blacks terminated their attorney's representation and refused to sign the settlement agreement. The Association and the Board Members filed a motion to enforce the settlement. At the hearing on the motion, the Blacks appeared without counsel and requested additional time to obtain a new attorney. Judge Osterhaven adjourned the hearing until November 17, 2000, to allow the Blacks additional time to retain an attorney. Following that hearing, the Blacks retained their present counsel, who filed this action on October 17, 2000.
In their complaint in this action, the Blacks alleged that Defendants violated their federal civil rights by selectively enforcing the Association's rules and restrictions against them based on their race, by obtaining the temporary restraining order in the State Court Action, and by refusing to accommodate their request for an access ramp. (Compl. ¶¶ 17, 18, 27, 32.) For relief, the Blacks requested, among other things, that this Court enjoin the state court from proceeding to enforce the settlement agreement until this Court determined whether the Blacks' civil rights were violated by Defendants. In late November or early December 2000, Judge Osterhaven granted the motion to enforce the settlement. The Blacks have represented that they are appealing that ruling but wish to dismiss this case in order to avoid breaching the settlement agreement in the event that their appeal is unsuccessful.
Discussion
The Blacks' motion is governed by Rule 41(a)(2), which provides, in relevant part:
By Order of Court. Except as provided in paragraph (1) of this subdivision of this rule, an action shall not be dismissed at the plaintiff's instance save upon order of the court and upon such terms and conditions as the court deems proper. . . . Unless otherwise specified in the order, a dismissal under this paragraph is without prejudice.
Rule 41(a)(2) "allows plaintiffs to freely dismiss their suits, subject to court approval, provided the dismissal does not prejudice any party."Templeton v. Nedlloyd Lines, 901 F.2d 1273, 1274 (5th Cir. 1990) (per curiam). Whether to grant a dismissal pursuant to Rule 41(a)(2) is a matter within the sound discretion of the district court. See Garner v. Missouri-Pacific Lines, 409 F.2d 6, 7 (6th Cir. 1969). Generally, "a district court should grant a motion for voluntary dismissal unless a defendant can show that it will suffer some plain legal prejudice as a result." Waller v. Financial Corp. of Am., 828 F.2d 579, 583 (9th Cir. 1987). "Plain legal prejudice" does not result simply because the defendant faces the prospect of defending a second lawsuit, see Grover by Grover v. Eli Lilly Co., 33 F.3d 716, 718 (6th Cir. 1994), nor does it result simply because the plaintiff may gain some tactical advantage in a future lawsuit, see Davis v. USX Corp., 819 F.2d 1270, 1275 (4th Cir. 1987).
In Grover by Grover, the Sixth Circuit identified four factors which a court should consider in determining whether to grant a voluntary dismissal: (1) the amount of time and effort the defendant has incurred in preparing for trial; (2) any lack of diligence on the part of the plaintiff in prosecuting the action; (3) the plaintiff's failure to explain the need for a dismissal; and (4) whether the defendant has filed a motion for summary judgment. See Grover by Grover, 33 F.3d at 718. Given the circumstances of this case, none of these factors, either alone or in combination with one another, weighs in favor of denying the motion.
The first, second, and fourth factors support the Blacks' request for dismissal because the case has not advanced beyond the pleading stage. As for the third factor, the Blacks have furnished an adequate explanation for the need to voluntarily dismiss their case: to avoid violating the settlement agreement if they do not succeed in having Judge Osterhaven's order reversed on appeal. In addition, the Court notes that at the time the Blacks filed their complaint, it was still an open question whether the settlement agreement would be enforced.
Although the Court concludes that the Blacks' motion should be granted (with one exception discussed below), the Court may not grant the motion without considering whether the dismissal should be conditioned upon any terms and conditions that are necessary to prevent Defendants from being prejudiced. In this circuit, a court may award attorneys fees against the dismissing party when a dismissal is without prejudice for the purpose of "compensat[ing] the defendant for expenses in preparing for trial in the light of the fact that anew action maybe brought in another forum." Smoot v. Fox, 353 F.2d 830, 833 (6th Cir. 1965). Such an award is within the district court's discretion. See DWG Corp. v. Granada Invs., Inc., 962 F.2d 1201, 1202 (6th Cir. 1992). However, because the purpose of the award is to ensure that a defendant does not have to defend the case twice, only those fees representing work that could not be used in subsequent litigation on the same claims should be awarded. See Conafay v. Wyeth Labs., 841 F.2d 417, 419 (D.C. Cir. 1988) (per curiam).
Based upon the fact that the only work performed by Defendants' counsel in this case is the preparation of an answer, the Court finds no reason to award Defendants their fees because they may simply refile their answer in the event the Blacks refile this case. Thus, Defendants will not be required to pay for duplicative work.
The Court notes that Defendants have requested an award of $3,500 for fees spent in this case. However, the billing statement attached to Defendants' response brief indicates that much of the work performed was in connection with the State Court Action or the HUD proceeding. Therefore, even if the Court determined that an award of fees was appropriate, the Court would not include those amounts as part of the award.
Defendants' argument for an award of fees is not based upon any argument that they will be required to duplicate their efforts or will not be able to use work performed in this case in any subsequent action, but rather is based upon the assertion that the Blacks' claims are baseless or frivolous. The Court rejects such an argument for two reasons. First, Defendants have failed to cite a basis for an award of fees on those grounds. For instance, Defendants did not cite Fed.R.Civ.P. 11 as a basis for an award of fees. However, even had they done so, there would be no basis for an award of fees because Defendants have not shown that they complied with the "safe harbor" provision of Rule 11. See Fed.R.Civ.P. 11(c)(1)(A). Second, having reviewed the Blacks' complaint, the Court cannot conclude that it is frivolous or groundless, at least at this juncture. As noted above, the Blacks filed their complaint prior to the time Judge Osterhaven entered the order enforcing the settlement agreement and there was at least some question whether the settlement agreement would be enforced. Thus, while the action may have been premature, it was not groundless.
As indicated above, the Court concludes that the Blacks' motion to dismiss without prejudice and without costs should be granted with one exception. That is, the claim under 42 U.S.C. § 1983 should be dismissed with prejudice because the Blacks failed to allege that Defendants acted under color of state law, an essential element of a claim under § 1983. See Flagg Bros. v. Brooks, 436 U.S. 149, 155-57, 98 S.Ct. 1729, 1732-33 (1978). Furthermore, the Blacks cannot cure this pleading omission by amendment because Defendants did not become state actors simply because they filed suit in state court. See Tunstall v. Office of Judicial Support, 820 F.3d 631, 633-34 (3d Cir. 1987); Parker v. Byrd Wiser, 947 F. Supp. 245, 249-50 (S.D.Miss. 1996). Therefore, the Court will dismiss that claim with prejudice.
Conclusion
For the foregoing reasons, the Court will grant the Blacks' motion in part and dismiss all claims without prejudice except their claim under 42 U.S.C. § 1983, which will be dismissed with prejudice. Defendants' request for attorney fees will be denied.
An Order consistent with this Opinion will be entered.
ORDER
In accordance with the Opinion filed this date,IT IS HEREBY ORDERED that Plaintiffs' Motion to Dismiss Without Prejudice and Without Costs (docket no. 8) is GRANTED IN PART. All claims are dismissed without prejudice except for the claim under 42 U.S.C. § 1983, which is dismissed with prejudice. In addition, Defendants' request for attorney fees is DENIED.