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Strunk v. Liberty Insurance Corp.

United States District Court, E.D. Kentucky, Central Division, Lexington

February 20, 2019

JACK A STRUNK, Plaintiff,
v.
LIBERTY INSURANCE CORPORATION, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          Joseph M. Hood Senior U.S. District Judge

         Plaintiff Jack Strunk and Defendant Liberty Insurance Corporation, acting through counsel, have filed a joint stipulation of dismissal with prejudice of all claims asserted against Liberty. [DE 9]. But here, because dismissal of claims against a single party is not appropriate under Federal Rule of Civil Procedure 41, the Court construes the stipulation of dismissal as a motion to drop a single party under Rule 21. Still, it is unclear what impact this dismissal will have on the case since dismissal of Liberty will result in only two unknown defendants remaining in this action. Accordingly, the parties' joint stipulation of dismissal is construed as a motion to drop a party under Rule 21 and is GRANTED. All claims against Defendant Liberty are DISMISSED WITH PREJUDICE and the Strunk shall file a status report concerning the claims remaining against the unknown defendants.

         I. PROCEDURAL HISTORY

         On April 25, 2018, this action was removed to this Court from Garrard Circuit Court based on diversity jurisdiction. [DE 1]. Pursuant to the Court's scheduling order, all discovery was to be completed by February 15, 2019. [DE 6]. Dispositive motions are due from the parties no later than March 15, 2019, and this matter is scheduled for trial on May 28, 2019. [Id.].

         On February 14, 2019, Strunk and Liberty filed an agreed order or joint stipulation of dismissal, informing the Court that all claims that Strunk asserted against Liberty were dismissed with prejudice. [DE 9]. The joint stipulation makes no mention of the claims asserted against the unknown defendants in the action. Currently, the matter is ripe for review.

         II. Applicable Law and Analysis A. Dismissal of a Liberty Under Rule 21

         Here, while no explicit rule is cited by the parties, it appears that the parties move for voluntary dismissal without court order under Federal Rule of Civil Procedure 41(a)(1)(A)(ii). But, as this Court has previously explained, Rule 41(a) does not allow a court to dismiss some, but not all, of the defendants in a single case. See United States ex rel. Doe v. Preferred Care, Inc., 326 F.R.D. 462 (E.D. Ky. 2018). In the Sixth Circuit, a plaintiff may only dismiss an “action” using Rule 41(a) and an “action” is interpreted to mean the “entire controversy.” Philip Carey Manufacturing Company v. Taylor, 286 F.2d 782, 785 (6th Cir. 1961). While some Circuits disagree with the Sixth Circuit's interpretation of Rule 41(a), this Court is bound by Sixth Circuit precedent. See Preferred Care, 326 F.R.D. at 464; see, e.g., Van Leeuwen v. Bank of Am., N.A., 304 F.R.D. 691, 693-94 (D. Utah 2015) (discussing the circuit split and citing cases).

         But this does not end the analysis, because the Court construes filings “by their substantive content and not by their labels, ” and, as such, this Court will consider the stipulation of dismissal as a motion to drop a party under Rule 21. See Coleman v. Ohio State Univ. Med. Ctr., No. 2:11-cv-0049, 2011 WL 3273531, at *3 (S.D. Ohio Aug. 1, 2011).

         Rule 21 may be used for the dismissal of a single defendant. See Taylor, 286 F.2d at 785 (“we think that [Rule 21] is the one under which any action to eliminate” a single defendant should be taken); see also Letherer v. Alger Grp., LLC, 328 F.3d 262, 266 (6th Cir. 2003), overruled on other grounds by Blackburn v. Oaktree Capital Mgmt., LLC, 511 F.3d 633, 636 (6th Cir. 2008); Wilkerson v. Brakebill, No. 3:15-CV-435-TAV-CCS, 2017 WL 401212 (E.D. Tenn. Jan. 30, 2017) (“Rule 21 is the more appropriate rule”); Lester v. Wow Car Co., Ltd., No. 2:11-cv-850, 2012 WL 1758019, at *2 n.2 (S.D. Ohio May 16, 2012) (“the Sixth Circuit has suggested that dismissal of an individual party, as opposed to an entire action, is properly conducted pursuant to Rule 21, not Rule 41”); Warfel v. Chase Bank USA, N.A., No. 2:11-cv-699, 2012 WL 441135, at *2 (S.D. Ohio Feb. 10, 2012). Thus, the Court construes the joint stipulation of dismissal [DE 9] as a motion to drop a single party under Rule 21.

         “On motion or on its own, the court may at any time, on just terms, add or drop a party.” Fed.R.Civ.P. 21. The rule applies where “no relief is demanded from one or more of the parties joined as defendants.” Letherer, 328 F.3d at 267. Normally, under the rule, Courts must consider prejudice to the nonmoving party. See Wilkerson, 2017 WL 401212, at *2; Arnold v. Heyns, No. 13-14137, 2015 WL 1131767, at *4 (E.D. Mich. Mar. 11, 2015). The inquiry overlaps with Rule 41 standards “as guidance in evaluating potential prejudice to the non-movant.” Wilkerson, 2017 WL 401212, at *2. Courts determine whether the nonmoving party would suffer “plain legal prejudice” and consider: (1) defendant's effort and expense of preparation for trial; (2) excessive delay and lack of diligence on plaintiff's part in prosecuting the case; (3) insufficient explanation for the need for dismissal; and (4) whether a motion for summary judgment is pending.” Grover v. Eli Lily & Co., 33 F.3d 716, 718 (6th Cir. 1994).

         Even so, Liberty has agreed to the dismissal of all claims with prejudice, eliminating concern that Liberty may suffer plain legal prejudice as a result of the dismissal. Additionally, dismissal of this action with prejudice will prevent the Plaintiff from bringing these claims against Liberty in the future, providing finality for Liberty. As such, dismissal of Liberty pursuant to Rule 21 is appropriate.

         B. Effect of Dismissal

         If Liberty is dismissed as a Defendant in this action, only two “Unknown Defendants” will remain in the lawsuit. It is unclear if Strunk intends to proceed with this lawsuit against the two Unknown Defendants.

         On one hand, if Strunk does not intend to continue the lawsuit against the Unknown Defendants, it appears that Strunk may dismiss the remaining claims without a court order pursuant to Rule 41(a)(1)(A)(i) by providing notice of dismissal, ...


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