NORTHERN INSURANCE COMPANY OF NEW YORK v. TRAVELERS INSURANCE COMPANY et al
CLOSED DISMISSED - The Court hereby GRANTS Plaintiff Northern Insurance Company's Motion to Dismiss pursuant to Rule 41(a)(1)(A)(i). [Dkt. 89]. Accordingly, Plaintiff's Amended Complaint is DISMISSED WITHOUT PREJUDICE. All other pending motions are DENIED AS MOOT. This order closes this action because the dismissal was sought by the Plaintiff. (See Order.) Signed by Judge Larry J. McKinney on 2/27/2017.(LDH)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
NORTHERN INSURANCE COMPANY OF
NEW YORK as subrogee of Koch
TRAVELERS INSURANCE COMPANY,
CNA INSURANCE COMPANY,
HARTFORD INSURANCE COMPANY,
TRAVELERS INDEMNITY COMPANY,
CHARTER OAK FIRE INSURANCE
TRAVELERS INDEMNITY COMPAY OF
ILLINOIS n/k/a Travelers Property
Casualty Company of America, and
HARTFORD CASUALTY INSURANCE
ORDER ON PENDING MOTIONS
This matter is before the Court on various motions submitted by both parties.
Plaintiff Northern Insurance Company of New York as subrogee of Koch Original, Inc.
(“Northern”), has filed a Motion for Reconsideration of Order on Defendants’ Motion to
Dismiss Plaintiff’s Second Amended Complaint (“Motion to Reconsider”) (Dkt. 80), a
Motion to Dismiss (Dkt. 89), and a Notice of Dismissal (Dkt 93). Defendants, Travelers
Indemnity Company, The Charter Oak Fire Insurance Company, and Travelers Property
Casualty Company of America’s (collectively “Travelers”), have filed a Motion to Strike
Proposed Third Amended Complaint with Prejudice or, in the Alternative Motion to
Dismiss Third Amended Complaint with Prejudice (“Motion to Strike”) (Dkt 85), and a
Response in Opposition to Plaintiff’s Motion to Dismiss Without Prejudice and Brief in
Support of Motion for Attorneys’ Fees (“Motion for Fees”) (Dkt. 91). The Court will address
each of these motions with this order.
On December 14, 2016, this Court granted Travelers’ Motion to Dismiss Northern’s
Second Amended Complaint (“Order”) without prejudice. Dkt. 78. The Court stated that
Northern had 28 days to amend its complaint and admonished that failure to do so would
result in a dismissal with prejudice. Id.
On January 11, 2017, the 28th day after entry of the December 14, 2016, Order,
Northern filed its Motion to Reconsider. Dkt. 80. In support, Northern argues that each
of the four grounds that the Court found for dismissing the Second Amended Complaint
were in error. Northern also states that “if the choice of words in the Plaintiff’s Second
Amended Complaint was not sufficient to present a claim for relief, then Northern’s
proposed Third Amended Complaint … will overcome that shortcoming.” Dkt. 81 at 89.
Northern attached its Third Amended Complaint as an exhibit to its Motion to
Reconsider. Dkt. 81, Ex. 1. The Third Amended Complaint added George Koch Sons,
Inc., 1 and George Koch (a Corporation) (collectively “George Koch Sons”). Id.
On January 25, 2017, Travelers filed its Motion to Strike. Dkt. 85. Travelers argues
that Northern’s attachment of the Third Amended Complaint, in lieu of actually filing, did
not comply with the Court’s order and therefore dismissal with prejudice is warranted.
Dkt. 86 at 2-3. Travelers also renews its arguments set forth in its first Motion to Dismiss
George Koch Sons, Inc., is listed twice in the caption of the Third Amended Complaint.
In Count II, however, Northern states that it seeks declaratory judgment against George
Koch Sons, Inc., and/or George Koch and Sons, Inc., and/or George Koch (a corporation).
Plaintiff’s Second Amended Complaint (Dkt. 50) to support dismissal of Northern’s Third
Amended Complaint. Dkt. 86 at 3-8. Travelers further alleges that the Third Amended
Complaint fails to assert that George Koch Sons is a joint tortfeasor with Koch Originals.
On January 27, 2017, Northern filed its Motion to Dismiss pursuant to Federal Rule
of Civil Procedure 41(a)(1), requesting that the Court dismiss this cause of action without
prejudice. Dkt. 89.
On February 9, 2017, Travelers filed its Motion for Fees. Dkt. 91. In its Motion for
Fees, Travelers renewed its arguments that dismissal with prejudice is warranted for
Northern’s failure to timely file the Third Amended Complaint. Travelers acknowledges
that Rule 41 provides that a “plaintiff may dismiss an action without a court order by filing
a notice of dismissal before the opposing party serves either an answer or a motion for
Dkt. 90 at 4-5 (citing Rule 41(a)(1)(A)(i)).
however, that Rule 41(a)(1)(A)(i) is inapplicable as the Court has already ruled on the
merits of this case. Id. In the alternative, if the Court dismisses the case without
prejudice, Travelers requests reimbursement for attorneys’ fees and costs expended in
defending this lawsuit. Id. at 7-9; see also, Dkt. 91, ¶¶ 7-13. Counsel for Travelers
attached an affidavit that stated Travelers “had incurred $95,278.97 in attorneys’ fees”
defending this action. Dkt. 1, Ex. 1, ¶ 8.
In Northern’s response to Travelers’ Motion for Fees, Northern concedes that its
previous arguments on Northern’s Motion to Dimiss as to the Direct Action rule were
incorrect. Dkt. 92 at 3 (“Although Northern initially disagreed with Travelers’ arguments,
as evidence by its Motion to Reconsider, further reflection revealed that Travelers’
arguments had some merit.”). It did not address the other arguments for dismissal.
Northern states that it seeks to correct its error by withdrawing “its direct action against
Travelers and to set the stage for a direct action against Travelers’ insured, [George Koch
Sons], and an action for Declaratory Judgment against Travelers, wholly consistent with
Travelers’ arguments.” Id. at 3-4. Northern also claims that its Motion to Dismiss should
be treated as a notice of dismissal under Rule 41(a)(1)(A)(i), since Travelers has not filed
an answer or a motion for summary judgment. Id. at 4-6. Northern further argues that
the $95,000.00 sought for reimbursement is excessive. Id. at 7-8.
On February 16, 2017, Northern filed a Notice of Dismissal, pursuant to Rule
Travelers requests that the Court dismiss the instant case with prejudice or, in the
alternative, issue costs and fees pursuant to Rule 41. Travelers first argues that Northern
violated this Court’s Order when it attached, rather than filed, the Third Amended
Complaint. Because the Third Amended Complaint was not “filed,” the Court should
dismiss this action with prejudice as stated in the Order and based on the “[p]rincipals of
fairness and equity[.]” Dkt. 90 at 4.
The Court may dismiss a case with prejudice “if the plaintiff fails to prosecute or to
comply with the [Federal Rules of Civil Procedure].” Rule 41(b). “The court should
exercise this right sparingly and should dismiss a case under Rule 41 only ‘when there is
a clear record of delay or contumacious conduct, or when other less drastic sanctions
have proven unavailing.’” Salata v. Weyerhaeuser Co., 757 F.3d 695, 699 (7th Cir. 2014)
(citing Webber v. Eye Corp., 721 F.2d 1067, 1069 (7th Cir. 1983)).
Travelers does not argue that Northern’s failure to file has caused an undue delay
or risen to the level of obstinacy to warrant dismissal with prejudice. Moreover, the
purpose of a complaint is to provide fair notice of a plaintiff’s claim and its basis. See
Windy City Metal Fabricators & Supply, Inc. v. CIT Tech. Fin. Servs., Inc., 536 F.3d 663,
667 (7th Cir. 2008). Although Northern attached its Third Amended Complaint to its
Motion to Reconsider, rather than filing it, it nonetheless put Travelers on sufficient notice
of its claims. The Court cannot find that Northern’s alternative filing justifies the drastic
sanction of dismissal with prejudice.
Travelers other arguments are equally unavailing. First, it states that the Court
should not allow voluntary dismissal with prejudice in this case because the merits have
already been decided. In this case, however, the only substantive decision reached by
this Court resolved a Motion to Dismiss, the purpose of which “is to test the sufficiency of
the complaint, not to decide the merits.” Gibson v. City of Chicago, 910 F.2d 1510, 1520
(7th Cir. 1990). It appears then that the merits of this action have not been decided,
making Travelers’ position inapposite.
Second, Travelers states that Northern’s Motion to Dismiss without prejudice is
merely an attempt to avoid imminent defeat, which the Court should not allow pursuant
to Rule 41(a)(2). Rule 41(a)(2) allows for a plaintiff to dismiss “only by court order, on
terms that the court considers proper.” Northern’s Motion to Dismiss, however, falls under
Rule 41(a)(1), which allows a plaintiff to voluntarily dismiss an action prior to the filing of
an answer or motion for summary judgment. Travelers has filed neither. Accordingly,
Northern need not seek dismissal at the request of the Court.
Finally, Travelers requests that the Court award it attorneys’ fees and costs for
defending this action. Certainly, Travelers has expended additional costs in defending
this action that may not have otherwise been necessary, particularly the Motion to
Reconsider that Northern has now essentially conceded is frivolous. See Dkt. 92 at 3.
But, once again, Travelers assumes that Northern’s Motion to Dismiss is brought under
Rule 41(a)(2), despite the fact that it has not filed an answer or motion for summary
judgment. It is well-established that “Rule 41(a)(1)(i) prevents an award of ‘costs’ against
the party who dismisses the suit voluntarily. Only the filing of a second suit on the same
claim allows the court to award the costs of the first case.” Szabo Food Serv., Inc. v.
Canteen Corp., 823 F.2d 1073, 1077 (7th Cir. 1987). Thus, since this is Northern’s first
suit on this claim and Travelers filed neither an answer nor a motion for summary
judgment, the Court cannot grant Travelers fees pursuant to Rule 41.
For the reasons stated herein, the Court hereby GRANTS Plaintiff Northern
Insurance Company’s Motion to Dismiss pursuant to Rule 41(a)(1)(A)(i).
Accordingly, Plaintiff’s Amended Complaint is DISMISSED WITHOUT PREJUDICE. All
other pending motions are DENIED AS MOOT. This order closes this action because the
dismissal was sought by the Plaintiff.
IT IS SO ORDERED this 27th day of February, 2017.
LARRY J. McKINNEY, JUDGE
United States District Court
Southern District of Indiana
Timothy Michael Swan
GARAN LUCOW MILLER PC
Christopher N. Wahl
HILL FULWIDER, P.C.
David J. Saferight
HILL FULWIDER, P.C.
Gerald E. Ziebell
KARBAL COHEN ECONOMOU SILK & DUNNE LLC
Wayne S. Karbal
KARBAL COHEN ECONOMOU SILK & DUNNE LLC
Tammy Jo Meyer
METZGER ROSTA LLP
Adam C. Decker
PLUNKETT & COONEY PC
Lauren Beth McMillen
Richard A. Rocap
ROCAP LAW FIRM LLC
Pamela A. Bresnahan
VORYS, SATER, SEYMOUR AND PEASE LLP
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