Opinion
Civil Action No. 99-2670, Section "B"(1).
July 12, 2000.
ORDER AND REASONS
Before the Court are Plaintiff Antoinette Norris' Motion to Dismiss Without Prejudice and Motion for Sanctions (Rec. Doc No. 19) and Defendants Progressive Insurance Group, Progressive Security Insurance Company, and Progressive Casualty Insurance Company's Motion for Summary Judgment (Rec. Doc. No. 20). For the following reasons, the plaintiffs Motion to Dismiss Without Prejudice is GRANTED, with plaintiff paying for court costs only; the Motion for Sanctions is DENIED. The defendants' Motion for Summary Judgment is DISMISSED AS MOOT without prejudice to reurge in any subsequent proceeding.
BACKGROUND.
Plaintiff Antoinette Norris filed this action against Progressive Insurance Group, Progressive Security Insurance Company, and Progressive Casualty Insurance Company alleging violations of the Fair Credit Reporting Act ( 15 U.S.C. § 1681 (b)). She alleges that the defendants obtained her credit reports over a two year period without a permissible purpose, without proper authorization, and under false pretenses. She suspects that the defendants used her credit report when investigating her insurance claim regarding an accident she had on July 6, 1997. The plaintiff was questioned by a Progressive claims representative, and the nature of the questions aroused her suspicions that her credit report was obtained, without her permission, regarding the claim.
The defendants admit that they obtained the plaintiffs credit report on April 22, 1997, September 20, 1997, November 1, 1997, November 2, 1997, March 17, 1998, June 19, 1998, and February 24, 1999. However, they claim that on each occasion the credit report was obtained for the insurance broker for underwriting purposes in connection with an application for insurance made by the plaintiff. Further, the defendants claim that all credit reports were obtained in compliance with the Fair Credit Reporting Act.
LAW AND ANALYSIS.
Plaintiff Antoinette Norris' Motion to Dismiss Without Prejudice and Motion for Sanctions
The plaintiff moves to dismiss her claims against the defendants without prejudice under rule 41(a)(2). After initiating the captioned lawsuit, the plaintiff learned that it was in her best interest to concentrate her litigation efforts against Experian, the credit reporting agency, for its failure to comply with the Fair Credit Reporting Act's requirements. She claims that the defendants will not be prejudiced because no activity, beyond the scheduling conference, has occurred in this case. The plaintiff also seeks sanctions because she claims that the defendants' counsel's failure to confer with her counsel regarding the motion to dismiss has wasted the Court's and her counsel's time.
The defendants respond that the instant action should not be dismissed without prejudice because they will be prejudiced. The defendants claim that they have expended considerable resources conducting an in-house investigation to defend this lawsuit. To leave the door open for the plaintiff to file a later suit after resources have been expended on this lawsuit would prejudice the defendants. Further, if the Court grants the motion to dismiss, it should order the plaintiff to pay the defendants' attorneys' fees. Regarding the plaintiffs request for sanctions, the defendants claim that the request for sanctions concerning unanswered discovery requests is inconsistent with the request for dismissal. When addressing the sanctions request, however, the defendants do not mention the failure of its counsel to confer with the plaintiffs counsel regarding the motion to dismiss.
The plaintiff replies that the motion for summary judgment was filed more than a month after the motion to dismiss and seven months after the unanswered discovery was propounded. Further, although the defendants' counsel represented to the plaintiffs counsel early in this litigation that he would provide proof that Progressive did not use the credit report in connection with the insurance claim, that proof was never provided. She also claims that it is common for credit reports obtained for underwriting purposes to be used for claims investigations. Further, the plaintiff reiterates that Fifth Circuit jurisprudence holds that the defendants must show some legal prejudice apart from the possibility of a second lawsuit to avoid a voluntary dismissal without prejudice.
The Court finds that involuntary dismissal will not prejudice the defendants even though they allegedly have expended resources conducting an in-house investigation and filing a dispositive motion concerning the plaintiffs claims. In Manshack v Southwestern Elec. Power Co., 915 F.2d 172, 174 (5th Cir. 1990), the Fifth Circuit explained that a motion for voluntary dismissal should be granted unless the defendant will suffer legal prejudice, even if the plaintiff obtains a tactical advantage with the dismissal.
The purpose of Rule 41(a)(2) is primarily to prevent voluntary dismissals which unfairly affect the other side, and to permit the imposition of curative conditions. Accordingly the courts have generally followed 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. It is not a bar to dismissal that plaintiff may obtain some tactical advantage thereby.
In that case, the defendant had received a favorable ruling on the choice of law before the filing of the voluntary dismissal. Although the Manshack court acknowledged that a motion to dismiss after an adverse ruling could cause prejudice to a defendant, the ruling on choice of law here was not as definitive a ruling as a summary judgment ruling on a legal defense. Similarly, in Ritchey v. Ledoux, 164 F.R.D. 186, 189 (E.D. La. 1995), the court clarified that the defendant's interest must be considered when deciding to dismiss an action without prejudice:
In ruling on a motion under Rule 41(a)(2), the Court must keep in mind the defendant's interests, "for it is [its] position which should be protected." LeCompte v. Mr. Chip, Inc., 528 F.2d 601, 604 (5th Cir. 1976). "[I]n most cases a dismissal should be granted unless the defendant will suffer some legal harm." Id. Such "legal harm" does not include "the mere prospect of a second lawsuit." Id., quoting Holiday Queen Land Corp. v. Baker, 489 F.2d 1031, 1032 (5th Cir. 1974). However, "[w]here the plaintiff does not seek dismissal until a late stage and the defendants have exerted significant time and effort, the court may, in its discretion, refuse to grant a voluntary dismissal." Hartford Accident Indem. Co. v. Costa Lines Cargo Services, Inc., 903 F.2d 352, 360 (5th Cir. 1990).
Likewise, WRIGHT MILLER indicates that dismissal should be denied "if the defendant will be prejudiced seriously by the dismissal" and if the legal harm suffered involves more than "the mere prospect of a second lawsuit." 9 C. WRIGHT A. MILLER, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2d § 2364 at 280 and 293. WRIGHT MILLER cites the following examples of plain legal prejudice: effort and expense of in preparing for trial, excessive delay and lack of diligence in prosecuting claims, the filing of motions for summary judgment, cases when actual legal rights are threatened, or situations when monetary or other burdens are extreme or unreasonable. WRIGHT MILLER, § 2364 at 281 n. 17. Although the filing of a motion for summary judgment may constitute legal prejudice, a summary judgment motion filed after the filing of a plaintiffs voluntary motion to dismiss will not support a finding of prejudice. Conafay by Conafay v. Wyeth Laboratories, a Div. of American Home Products Corp., 841 F.2d 417, 419 (D.C. Cir. 1988).
Here, the plaintiff filed her motions to dismiss on May 30, 2000 and June 2, 2000 respectively, and the defendants filed their motion for summary judgment on June 8, 2000. Because the defendants filed their motion for summary judgment after both motions for dismissal, the pending motion for summary judgment alone is insufficient to constitute legal prejudice which would bar a voluntary motion to dismiss. Compare Ayers v. Davidson, 285 F.2d 137, 138-39 (5th Cir. 1960) (where the plaintiffs filed a motion to dismiss while a summary judgment motion was pending, the district judge overruled the voluntary dismissal motion and entered the summary judgment).
Similarly, the potential loss of the ruling favorable to the defendants on class certification does not create legal prejudice. Although this Court denied the plaintiffs motion for class certification on March 22, 2000 (Rec. Doc. No. 14), she may re-file this motion and receive an order granting class certification in subsequent litigation, even though the plaintiff was timebarred from requesting certification in the present suit. The defendants therefore may have to defend a class action as oppose to a single action if the plaintiff re-institutes her case. The creation of this legal advantage for the plaintiff does not prevent voluntary dismissal according to the Fifth Circuit. See Manshack, 915 F.2d at 174.
Further, a review of the record indicates that the defendants have engaged themselves only minimally in the present case. Before the filing of the plaintiffs motion to dismiss, they filed a motion for more definite statement, answered the complaint, propounded discovery on the plaintiff, and participated in a scheduling conference. The Court cannot imagine that these filings have generated expenses that would support legal prejudice. Additionally, the Court notes that the defendants deflected some expenses by avoiding some filings. For example, the defendants failed to timely oppose the plaintiffs motion for class certification and failed to timely answer the discovery propounded by the plaintiff after receiving an extension of time from the Court within which to do so. The pleadings do not reflect a substantial investment of time or money into the present case.
Further, although the defendants claim that an in-house investigation cost them considerably, the Court has not been provided details concerning the time, money or resources involved in the in-house investigation allegedly conducted regarding the plaintiffs' claims. The Court, therefore, cannot use this unsubstantiated claim as a basis for finding legal prejudice. Accordingly, the Court finds that a dismissal without prejudice is appropriate in this case. Cf. Yoffe v. Keller Industries, Inc., 582 F.2d 982, 983 (5th Cir. 1978); see also LeCompte v. Mr. Chip, Inc., 528 F.2d 601, 603 (5th Cir. 1976).
Further, the Court finds potential merit in the plaintiffs complaints regarding the professional conduct of the defendants' counsel. Just as the defendants' counsel failed to return the plaintiffs counsel's telephone calls, counsel for the defendants failed to return the Court's call regarding the previously filed motion to dismiss (Rec. Doc. No. 18), which this Court denied. The Court conferred with counsel only after making a subsequent call to counsel. The Court finds the delay, which came without adequate justification, unacceptable for a practicing member of the legal profession. The Court's experience in this instance with counsel gives credence to the plaintiffs complaints. Had counsel for the defendants conferred with the plaintiffs counsel regarding the evidence it had regarding the credit report requests, the plaintiff may have agreed to dismiss her action WITH prejudice. This would have obviated the need for the filing of a formal motion to dismiss as well as the Court's rulings on all of the motions presently pending.
The Code of Professionalism approved by the Louisiana Supreme Court on January 10, 1992 and adopted later by this Court, provides in two articles that a member of the bar "will cooperate with counsel and the court to reduce the cost of litigation and will readily stipulate to all matters not in dispute" and "will be punctual in [his] communication with clients, other counsel and the court, and in honoring scheduled appearances." However, this Court will not rush to judgment here by imposing sanctions on otherwise questionable conduct. Counsel's conduct could have been the result of good faith oversight or some exceptional circumstance. The Court therefore will allow defense counsel to submit their interpretation of the professionalism issue here.
The Defendants' Motion for Summary Judgment
The defendants claim that the plaintiff cannot prevail on her claims because of the expressed language of 15 U.S.C. § 1681 (b). The plaintiff responds that discovery is required to oppose the defendants' motion for summary judgment. The Court finds that the defendants' Motion for Summary Judgment is moot based upon this Court's ruling on the plaintiffs motion to dismiss. Accordingly,
IT IS ORDERED that Plaintiff Antoinette Norris' Motion to Dismiss Without Prejudice (Rec. Doc. No. 19) is GRANTED, and the plaintiffs Motion for Sanctions (Rec. Doc. No. 19) is DENIED.
IT IS FURTHER ORDERED that the plaintiff shall bear all court costs associated with this proceeding.
IT IS FURTHER ORDERED that defense counsel of record shall read the Code of Professionalism adopted by this Court and shall submit to the Court their own interpretation of the codal articles on cooperation and punctual communications with the Court and other counsel. The written interpretation shall be submitted no later than July 21, 2000.