Jack Gray Transport, Inc. v. AT&T Corp.
OPINION AND ORDER GRANTING 26 Motion to Dismiss by Plaintiff Jack Gray Transport Inc. This case is DISMISSED WITH PREJUDICE. Clerk shall enter judgment accordingly. Signed by Judge William C Lee on 2/16/2017. (lns)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
FORT WAYNE DIVISION
JACK GRAY TRANSPORT, INC.
AT & T CORP,
Case No. 2:16-CV-23
OPINION AND ORDER
Before the Court is Plaintiff’s “Motion to Dismiss Without Prejudice” [DE 26]. Defendant
responded in opposition to the motion seeking a dismissal with prejudice [DE 28] to which
Plaintiff replied. For the following reasons, the Motion to Dismiss will be GRANTED but the
dismissal will be WITH PREJUDICE.
Plaintiff Jack Gray Transport, Inc. filed the present state law action asserting that AT & T
tortiously interfered with its business by wrongly terminating telephone service to its business and
demanding payment for fees and services that had been terminated and transferred to another
carrier by Plaintiff months, possibly years, prior to the payments requested. AT & T removed the
case to this Court and filed its Motion to Stay and Compel Arbitration under its contract with the
Plaintiff [DE 1, DE 19]. On June 3, 2016, the Magistrate Judge granted that motion, compelled
the parties to arbitrate the matter, and stayed the action pending resolution of arbitration. In coming
to this decision, the Magistrate Judge determined:
The arbitration provision provides that the agreement to arbitrate includes ‘disputes
of any type’ between Plaintiff and Defendant, and Plaintiff’s filing of the instant
action demonstrates its refusal to submit to arbitration. As a result, this action will
be stayed and the parties compelled to arbitrate the dispute pursuant to the
[DE 23, p. 2]. The Magistrate Judge further ordered the parties to file a status report by December
In compliance with that Order, the Defendant filed its status report [DE 24] in which
counsel noted that no arbitration proceedings have been instituted by the Plaintiff. Thereafter,
Plaintiff filed the present motion seeking to dismiss the action with such dismissal being without
prejudice. Plaintiff’s rationale for the without prejudice designation is that “Plaintiff desires to
retain its rights under its cause of action in the event Defendant might later initiate proceedings to
collect fees claimed owed.” [DE 26]. In response, AT & T objects to the motion to dismiss contending
any dismissal should be with prejudice since the Magistrate Judge determined that “disputes of any
type” between the parties are required to be arbitrated. [DE 28].
Federal Rule of Civil Procedure 41(a)(2) provides that, after service of an answer or motion
for summary judgment, an action “may be dismissed at the plaintiff's request only by court order,
on terms that the court considers proper.” Fed. R. Civ. Pro. 41(a) (2). The district court therefore
enjoys wide discretion in considering Rule 41 motions, and the plaintiff bears the burden of
persuasion. See Tolle v. Carroll Touch, Inc., 23 F.3d 174, 177 (7th Cir.1994) (citing F.D.I.C. v.
Knostman, 966 F.2d 1133, 1142 (7th Cir.1992)).
If a court grants a motion for voluntary dismissal, its discretion extends to deciding whether
or not to grant the plaintiff dismissal without prejudice. The Seventh Circuit has ruled that courts
should not grant dismissal without prejudice if the defendant would suffer “plain legal prejudice”
as a result of such a decision. Kovalic v. DEC Int'l, Inc., 855 F.2d 471, 473 (7th Cir.1988); In re
Bridgestone Firestone Prods. Liability Litig., 199 F.R.D. 304, 306 (S.D.Ind.2001). In determining
whether a defendant would suffer plain legal prejudice, we consider four factors: (1) the
defendant's effort and expense of preparation for trial; (2) whether there has been excessive delay
and lack of diligence on the part of the plaintiff in prosecuting the action, (3) the sufficiency of the
plaintiff's explanation for the need to take a dismissal, and (4) whether the defendant has filed a
motion for summary judgment. Knostman, 966 F.2d at 1142; Pace v. S. Exp. Co., 409 F.2d 331,
334 (7th Cir.1969)).
In this case, Plaintiff altogether fails to cite to Fed.R.Civ.P. 41 and its justification for
dismissal is that it has no intention of instituting arbitration. Given that this has been determined
to be the proper procedure to pursue the claims asserted in this case, Plaintiff’s refusal to take this
step constitutes lack of diligence on its part. More importantly, given the ruling that all claims
between the parties are subject to arbitration, which would seemingly subsume any collection
attempts by AT & T on accounts it believes in good faith are owed, any future attempt to refile the
present claim would unduly prejudice the defendant in that it would be forced to relitigate the issue
of arbitration when that issue has previously been determined. Accordingly, the court GRANTS
the Motion to Dismiss but does so WITH PREJUDICE.
Based on the foregoing, the Plaintiff’s Motion to Dismiss [DE 26] is GRANTED; this case
is DISMISSED WITH PREJUDICE. The Clerk shall enter judgment accordingly.
Entered: This 16th day of February, 2017.
s/ William C. Lee
United States District Court
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