Ogden v. Receivables Performance Management, LLC
Filing
39
OPINION AND ORDER GRANTING 34 MOTION to Dismiss. The Plaintiff's Complaint is DISMISSED WITH PREJUDICE with each party to bear its own fees and costs. Signed by Chief Judge Theresa L Springmann on 6/11/2019. (bas)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
TAMIKA NICOLE OGDEN,
Plaintiff,
v.
CAUSE NO.: 2:16-CV-526-TLS
RECEIVABLES PERFORMANCE
MANAGEMENT, LLC,
Defendant.
OPINION AND ORDER
This matter is before the Court on the Plaintiff’s, Tamika Nicole Ogden, Motion to
Dismiss Her Filed Complaint [ECF No. 34], pursuant to Federal Rule of Civil Procedure
41(a)(2).
BACKGROUND
The Plaintiff filed her Complaint [ECF No. 1] on December 20, 2016, alleging that the
Defendant, Receivables Performance Management, LLC, violated the Fair Debt Collection
Practices Act (FDCPA), the Telephone Consumer Protection Act (TCPA), and the Indiana
Deceptive Consumer Sales Act. The Defendant filed an Answer [ECF No. 20], and the parties
engaged in discovery and mediation. On January 24, 2018, the Defendant filed a Motion for
Summary Judgment [ECF No. 32].
On February 21, 2018, the Plaintiff filed Plaintiff’s Motion to Dismiss Her Filed
Complaint [ECF No. 34] pursuant to Federal Rule of Civil Procedure 41(a)(2), seeking dismissal
with prejudice. The Plaintiff states that she determined that dismissing this matter with prejudice
would be appropriate and attempted to draft a stipulation of agreed dismissal with the Defendant.
1
(Pl.’s Mot. to Dismiss at 1.) The Defendant filed an Opposition to Motion to Dismiss [ECF No.
35], and the Plaintiff filed a Reply in Support [ECF No. 36]. The matter is now ripe for review.
LEGAL STANDARD
Under Federal Rule of Civil Procedure 41(a)(2), a plaintiff may request that the Court
dismiss her claim, without the consent of the other parties in the action, on terms that the court
considers proper. Fed. R. Civ. P. 41(a)(2). After service of an answer or motion for summary
judgment, the Court enjoys wide discretion in considering Rule 41 motions. Under these
circumstances, dismissal is not automatic, and the Court, in its discretion, may issue an order
dismissing the case. Id. As a result, the Court’s chief concern in deciding whether and on what
terms to grant a Rule 41(a)(2) dismissal should be fairness to the defendant, who in theory has
not consented to the dismissal. See Tyco Labs, Inc. v. Koppers Co., Inc., 627 F.2d 54, 56 (7th
Cir. 1980). In such cases, the plaintiff bears the burden of persuasion. Tolle v. Carroll Touch,
Inc., 23 F.3d 174, 177 (7th Cir. 1994) (citing FDIC v. Knostman, 966 F.2d 113, 1142 (7th Cir.
1992)). Dismissal under Rule 41(a)(2) is without prejudice, unless otherwise ordered by a court,
and this suggests that the terms and conditions of dismissal should be for a defendant’s benefit.
McCall-Bey v. Franzen, 777 F.2d 1178, 1184 (7th Cir. 1985) (stating that the terms and
conditions “are the quid for the quo of allowing the plaintiff to dismiss his suit without being
prevented by the doctrine of res judicata from bringing the same suit again”).
A court would abuse its discretion if it were to permit voluntary dismissal where the
defendant would suffer plain legal prejudice as a result. Wojtas v. Capital Guardian Tr. Co., 477
F.3d 924, 927 (7th Cir. 2007). In deciding whether to grant a Rule 41(a)(2) motion to dismiss, a
court may look at a variety of factors, including: (1) a defendant’s effort and resources already
expended in preparing for trial; (2) excessive delay and lack of diligence on the part of the
2
plaintiff in prosecuting the action; (3) insufficient explanation for the need of a dismissal; and
(4) whether a summary judgment motion has been filed by the defendant. Tyco Labs, Inc., 627
F.2d at 56. These factors, however, are guidelines and are not mandates. Id.
ANALYSIS
The Defendant argues that dismissal will result in legal prejudice and that it is entitled to
fees and costs pursuant to 28 U.S.C. § 1927, due to the Plaintiff’s bad faith conduct during
litigation. The Plaintiff argues that there is no legal prejudice and the Defendant is not entitled to
fees or cost.
A.
Rule 41(a)(2) Factors
The Defendant states that dismissal pursuant to Rule 41(a)(2) is inappropriate and will
result in plain legal prejudice because the dismissal is: (i) sought late in the litigation; (ii) the
purpose is to avoid an adverse determination on the merits of the action and deny the Defendant
an opportunity to adjudicate the issue; and (iii) a voluntary dismissal will deprive the Defendant
of its right to seek prevailing party fees and costs. (Def.’s Resp. at 4.) The Plaintiff responds that
the Defendant’s arguments do not constitute a showing of legal prejudice, as the costs of
defending or prosecuting a lawsuit are not “legal prejudice” as Rule 41 contemplates. (Pl.’s
Reply at 3.)
“In exercising its discretion the court follows 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.” Stern v. Barnett, 452 F.2d 211, 213 (7th Cir. 1971) (quoting 2B
Barron and Holtzoff, Federal Practice and Procedure § 912, p. 167 (Wright ed. 1961)). Plain
legal prejudice may result from “the defendant’s effort and expense of preparation for trial,
3
excessive delay and lack of diligence on the part of the plaintiff in prosecuting the action,
insufficient explanation for the need to take a dismissal, and the fact that a motion for summary
judgment has been filed by the defendant.” Tyco Labs., Inc., 627 F.2d at 56 (quoting Pace v. S.
Express Co., 409 F.2d 331 (7th Cir. 1969)). Plain legal prejudice, however, is “more clearly
shown where the defendant has filed a counterclaim prior to the time that plaintiff has moved to
dismiss, a circumstance which is specifically covered by the language of the Rule.” Id. The
Defendant has no counterclaim or circumstance specifically covered by the language of Rule 41.
Rather, the Defendant argues that the efforts it expended in discovery and its pending Motion for
Summary Judgment constitute legal prejudice. The question for the Court then is whether any of
the Defendant’s alleged harms align with the guidelines the Seventh Circuit outlined in Tyco.
In the first instance, discovery in this matter has not been so extensive as to be
tantamount to plain legal prejudice that would preclude dismissal. Though the Defendant argues
that the Plaintiff’s production was scant, both the parties exchanged discovery. The Plaintiff
appeared for a deposition and deposed the Defendant and vice versa. These facts are readily
distinguishable from the cases the Defendant cited in support of its argument that it will suffer
legal prejudice— Tolle v. Carroll Touch, Inc., 23 F.3d 174, 177 (7th Cir. 1994), and Kapoulas v.
Williams Ins. Agency, Inc., 11 F.3d 1380, 1383 (7th Cir. 1993). The litigation in Tolle had been
pending for four years, discovery had been completed for approximately twenty-two months, and
the district court had limited the contested issues in the matter by granting a partial summary
judgment motion. Tolle, 23 F.3d at 177–78. In this case, the Plaintiff’s Motion to Dismiss was
filed less than two years after the commencement of litigation, discovery was completed less
than a year [ECF No. 28] before the Plaintiff filed the motion, and no summary judgment ruling
has limited the scope of the issues. Likewise, Kapoulas is similarly inapplicable, as the plaintiff
4
in that action attempted to dismiss the case after discovery had been underway to refile in state
court and avoid the district court’s adverse rulings. Kapoulas, 11 F.3d at 1385. There is no
indication that the Plaintiff intends that here.
Second, the Defendant’s argument that it may be prejudiced by the lack of a Court’s
ruling on its Motion for Summary Judgment [ECF No. 32] is not sufficient to constitute plain
legal prejudice. Such a hypothetical ruling would likely not be so beneficial or prejudicial as to
constitute legal prejudice. Again, the cases the Defendant cited in support of its argument, Fluker
v. County of Kankakee, 741 F.3d 787, 794–95 (7th Cir. 2013), and Otey v. City of Fairview
Heights, 125 F. Supp. 3d 874, 881 (S.D. Ill. 2015), are distinguishable from the present facts.
Unlike in Fluker, the Plaintiff did not file several motions for extension of time to respond to the
Defendant’s Motion for Summary Judgment. In Otey, the plaintiff sought to abandon only some
of his claims, which the defendant had expended considerable time addressing in its summary
judgment motion. Otey, 125 F. Supp 3d at 881. Moreover, in the present case, the Plaintiff is
seeking to dismiss all its claims with prejudice.
Finally, the Defendant argues that it will be prejudiced as it will not be able to collect fees
and costs pursuant to 15 U.S.C. § 1692k(a)(3). 15 U.S.C. § 1692k(a)(3) states: “On a finding by
the court that an action under this section was brought in bad faith and for the purpose of
harassment, the court may award to the defendant attorney’s fees reasonable in relation to the
work expended and costs.” Id. A finding of bad faith requires the Defendant to show that the
Plaintiff’s entire lawsuit was brought in bad faith and to harass the Defendant. Horkey v.
J.V.D.B. & Assocs., Inc., 333 F.3d 769, 775 (7th Cir. 2003) (emphasis added). The Plaintiff
states that the Defendant is not entitled to fees under § 1692k(a)(3) because it cannot show that
the action was brought in bad faith. (Pl.’s Reply at 6.)
5
The Defendant does not argue persuasively that the Plaintiff’s entire case was brought in
bad faith such that the Court’s dismissal may deprive it of potential relief under § 1692k(a)(3).
Instead, the Defendant points to the Plaintiff’s failure to answer its summary judgment motion as
evidence of bad faith. As the Plaintiff argues, a lack of response to the Defendant’s summary
judgment motion is not per se evidence that the case itself was brought in bad faith, particularly
when the Plaintiff actively litigated the case (Pl.’s Reply at 7.)
The Plaintiff has provided a valid reason for the dismissal of the case—the Plaintiff has
determined that dismissing the case with prejudice is the best course of action. (Pl.’s Mot. to
Dismiss ¶ 4.) There is no indication that a dismissal will be prejudicial or unfair to the
Defendant. Accordingly, the Court GRANTS the Plaintiff’s Motion to Dismiss and DISMISSES
WITH PREJUDICE.
B.
Fees and Costs
The Defendant also argues that, should the Court grant the Plaintiff’s Motion to Dismiss,
the Court should grant the Defendant fees and costs pursuant to 28 U.S.C. § 1927 because of the
Plaintiff’s bad faith conduct and abuse of the Court processes. 1 (Def.’s Resp. at 9.) Finally, the
Defendant argues that it is entitled to costs based upon the Supreme Court’s ruling in Marx v.
General Revenue Corp because it was the prevailing party in a FDCPA action. The Plaintiff
argues that the Defendant cannot prove that it acted in bad faith and that Marx is inapplicable.
1
Pursuant to N.D. Ind. L.R. 7-1, motions must be filed separately and be named in the title following the caption.
The Defendant did not file a separate motion nor note its request pursuant to 28 U.S.C. § 1927 in its caption. For the
purposes of judicial economy, however, the Court will address the Defendant’s request in this Opinion and Order.
6
1.
28 U.S.C. § 1927 Counsel’s Liability for Excess Costs
28 U.S.C. § 1927 states that “[a]ny attorney or other person admitted to conduct cases in
any court of the United States or any Territory thereof who so multiplies the proceedings in any
case unreasonably and vexatiously may be required by the court to satisfy personally the excess
costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.” 28 U.S.C. §
1927. For the Court to impose § 1927 sanctions, some evidence of subjective or objective bad
faith must be shown. Ross v. City of Waukegan, 5 F.3d 1084, 1089 n. 6 (7th Cir. 1993). “A
lawyer’s subjective bad faith is a sufficient, but not necessary, condition for § 1927 sanctions;
objective bad faith is enough.” Hunt v. Moore Bros., Inc., 861 F.3d 655, 659 (7th Cir. 2017).
This is conduct that is beyond unreasonable. Kotsilieris v. Chalmers, 966 F.2d 1181, 1184 (7th
Cir. 1992). Cases in which the Seventh Circuit has upheld § 1927 sanctions “have involved
situations in which counsel have acted recklessly, counsel raised baseless claims despite notice
of the frivolous nature of those claims, or counsel otherwise showed indifference to statutes,
rules, or court orders.” Id. at 1184–85; see also Vandeventer v. Wabash Nat’l Corp., 893 F. Supp.
827, 842 (N.D. Ind. 1995). Thus, sanctions under this statute are only warranted when an
attorney “[engages] in a serious and studied disregard for the orderly process of justice.” Walter
v. Fiorenzo, 840 F.2d 427, 433 (7th Cir. 1988).
The Defendant argues that the lengthy discovery period and failure to pursue discovery as
to a principal witness to one of the Plaintiff’s claims, among other things, make it clear that the
Plaintiff’s conduct was vexatious and in bad faith. The Defendant fails to persuade the Court that
the Plaintiff’s conduct constituted a serious disregard for the court process. The Plaintiff
participated in discovery and court hearings, actively adjudicated this matter, and adhered to the
Court’s deadlines. As such, the Court does not find that the Defendant is entitled to costs and
attorneys’ fees pursuant to 28 U.S.C. § 1927.
7
2.
Applicability of Marx v. General Revenue
Finally, the Defendant argues that it is entitled to fees and costs under Federal Rule of
Civil Procedure 54(d) pursuant to the Supreme Court’s opinion in Marx v. General Revenue
Corporation, 568 U.S. 371 (2013). Rule 54 states, in relevant part: “Unless a federal statute,
these rules, or a court order provides otherwise, costs–other than attorney’s fees–should be
allowed to the prevailing party.” Fed. R. Civ. P. 54(d)(1). In Marx, the Supreme Court held that
“a district court may award costs to prevailing defendants in FDCPA cases without finding that
the plaintiff brought the case in bad faith and for the purpose of harassment.” 568 U.S. at 374. As
with the other precedent the Defendant cited in support, Marx is not applicable to the facts at
hand. In Marx, there was an offer of judgment to which the plaintiff failed to respond, the case
went to trial, and the judge found that there was no violation of the FDCPA. Here, the Plaintiff
sought to dismiss the matter well before the trial stage. Further, the Defendant has not indicated
why it would be considered the “prevailing party” in this situation, particularly where the Court
is dismissing the case not for any defect but on the request of the Plaintiff. As such, the Court
does not find that the Defendant is entitled to costs pursuant to Federal Rule of Civil Procedure
54(d) or Marx.
C.
Rule 408 and Summary Judgment Motion
In her Reply, the Plaintiff contends that the Defendant violated Federal Rule of Evidence
408 and requests that the Court strike Defendant’s Exhibit 1 and enjoin counsel from engaging in
such behavior. As the Court has dismissed this case with prejudice, the Court finds that the
Plaintiff’s request is MOOT.
Likewise, the Defendant’s Motion for Summary Judgment [ECF No. 32] is also MOOT.
8
CONCLUSION
The Court GRANTS the Plaintiff’s Motion to Dismiss [ECF No. 34], and the Plaintiff’s
Complaint is DISMISSED WITH PREJUDICE with each party to bear its own fees and costs.
SO ORDERED on June 11, 2019.
s/ Theresa L. Springmann
CHIEF JUDGE THERESA L. SPRINGMANN
UNITED STATES DISTRICT COURT
9
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?