KNOWLES et al v. ALL PRO CAULKING & FIRESTOPPING, INC.

Filing 40

ORDER - Defendant's Motion to Set Aside Entry of Judgment Dkt. 38 is not well-taken and it is therefore DENIED. The remaining motions pending on the docket will be addressed by the Court in due course. Signed by Judge Sarah Evans Barker on 2/10/2022. *** SEE ORDER *** (CKM)

Case 1:17-cv-01649-SEB-MJD Document 40 Filed 02/10/22 Page 1 of 6 PageID #: 136

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
STEPHEN KNOWLES, et al.
Plaintiffs,
v.
ALL PRO CAULKING & FIRESTOPPING,
INC.,
Defendant.

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No. 1:17-cv-01649-SEB-MJD

ORDER ON DEFENDANT'S MOTION TO SET ASIDE ENTRY OF JUDGMENT
ENTRY
Now before the Court is Defendant's Motion to Set Aside Judgment Entry [Dkt.
38]. For the reasons detailed below, we DENY Defendant's Motion.
Factual Background
Plaintiffs brought this action against Defendant under the Employee Retirement
Income Security Act ("ERISA"), 29 U.S.C. § 1001, on May 18, 2017, alleging that
Defendant owed certain unpaid fringe benefit contributions. To resolve the matter, the
parties entered into an installment note repayment agreement pursuant to which
Defendant is required to pay a principal amount of $65,000.00 in installment payments,
with the last payment scheduled to be made on June 1, 2021. On November 12, 2018,
pursuant to Federal Rule of Procedure 41, Plaintiffs filed an Agreed Stipulation of
Dismissal (the "Stipulation"), which provided in relevant part that:
[The parties] having resolved all outstanding issues in this litigation, hereby
stipulate and agree to the dismissal of this action per the terms of the
parties' settlement agreement without prejudice with leave to reinstate on or
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before July 1, 2021. If no motion to reinstate is filed by July 1, 2021, then
this dismissal is with prejudice as of that date. Reinstatement may be
sought only based on Defendant's failure to make installment note
payments per the settlement agreement.
Dkt. 32 (emphasis added).
On November 16, 2018, the Court entered a marginal order acknowledging the
Stipulation. The November 16 Order is an exact copy of the parties' filed Stipulation,
except that it includes at the top right-hand corner the following language:
"Acknowledged. This matter is hereby dismissed with prejudice." Dkt. 33 (emphasis
added). Neither party thereafter brought to the Court's attention that the November 16
Order did not precisely track their Stipulation.
On February 26, 2021, Plaintiffs filed their Motion to Reinstate and for Entry of
Judgment [Dkt. 34] against Defendant and in favor of Plaintiffs in the amount of
$10,706.50 on grounds that Defendant had breached the terms of the installment note on
February 1, 2021 by failing to make the required note payments by the specified due
dates. Defendant filed no response to Plaintiffs' motion.
On June 14, 2021, the Court granted Plaintiffs' motion and entered judgment
against Defendant as requested by Plaintiffs. Four days later, on June 18, 2021,
Defendant filed its Motion to Set Aside the June 14, 2021 Order and Entry of Judgment
[Dkt. 38], on grounds that, because the Court dismissed the case with prejudice, Plaintiffs
were required to bring a new action for the alleged breach of the parties' settlement
agreement. To the extent the Court determines that Plaintiffs' motion for entry of
judgment was properly filed in the present action, Defendant argued, it requests that it be
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permitted thirty (30) days within which to respond to the motion because Plaintiffs failed
to provide proper notice and service of the motion under the Federal Rules of Civil
Procedure.
Discussion
Plaintiffs filed the Stipulation in this case pursuant to Federal Rule of Civil
Procedure 41(a), which provides, with certain exceptions not applicable here, that a
plaintiff may dismiss an action without a court order by filing a stipulation of dismissal
signed by all parties who have appeared. Fed. R. Civ. P. 41(a)(1)(A)(ii). Such a
dismissal is without prejudice unless the stipulation provides otherwise. Fed. R. Civ. P.
41(a)(1)(B).
Seventh Circuit law is clear that stipulated dismissals under Rule 41(a)(1)(A)(ii),
such as the one filed here, do not require judicial approval, and once filed, take effect
immediately. E.g., McCall-Bey v. Franzen, 777 F.2d 1178, 1185 (7th Cir. 1985) ("Rule
41(a)(1)(A)(ii) requires that the stipulation be filed in court, and the date of filing is the
date the dismissal takes effect."). It is also well established that, once such a stipulation
is filed, the district court lacks authority to issue subsequent orders concerning the merits
of the case that contradict the agreed terms to which the parties have stipulated. See, e.g.,
Smith v. Potter, 513 F.3d 781, 782–83 (7th Cir. 2008) (holding that it was improper for
the district court to enter an order dismissing a case with prejudice after the plaintiff
submitted a filing that voluntarily dismissed the action without prejudice under Rule
41(a)(1)). This is because it is the filing under Rule 41(a)(1) "itself [that] effectuate[s]
the dismissal of the suit …." Id. at 782; accord Jenkins v. Vill. of Maywood, 506 F.3d
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622, 624 (7th Cir. 2007) (recognizing that "Rule 41(a)(1) specifies that a plaintiff may
dismiss an action without an order of court by filing a stipulation of dismissal signed by
all parties who have appeared in the action" and the court's subsequent order relating to
the dismissal was "superfluous because under Rule 41(a), the dismissal [is] effective
immediately upon" the stipulation's filing).
The Stipulation was therefore effective as of November 12, 2018, that is to say,
immediately upon its filing, and the case was dismissed without prejudice on that date
with leave to reinstate before July 1, 2021, per the agreed terms set forth in the
Stipulation. Once the Stipulation was filed, "the case was gone; no action remained for
the district court to take." Potter, 513 F.3d at 782. Accordingly, the Court's November
16, 2018 Order acknowledging the Stipulation that contained a scrivener's error
indicating that the case had been dismissed with prejudice was "superfluous because
under Rule 41(a), the dismissal [was] effective immediately upon [its] filing…." Jenkins,
506 F.3d at 624. Because the terms of the Stipulation govern the dismissal, Plaintiffs
were free to file their Motion to Reinstate and for Entry of Judgment, and, after there was
no response from Defendant, the Court was free to rule on that motion. Thus, we reject
Defendant's argument that the Entry of Judgment must be set aside because Plaintiffs
were required to file a new action for breach of the parties' settlement agreement.
Alternatively, Defendant requests that the Entry of Judgment be set aside to allow
Defendant thirty days to respond to the Motion to Reinstate and for Entry of Judgment on
grounds that it was not properly served with the motion. Specifically, Defendant argues:

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Plaintiff proceeded to file the Motion to Reinstate and Entry of Judgment in
an action that was closed of record and per the Court's November 16, 2018
Order had been dismissed with prejudice, purporting to achieve service on
All Pro Caulking & Firestopping, Inc. by electronically serving counsel that
were originally of record two and a half years ago and that he knew or
should have known no longer represented All Pro Caulking & Firestopping,
Inc. and for which he took no further actions to establish effective notice to
the Defendant.
Dkt. 38 ¶ 6. However, Plaintiffs have presented evidence establishing that, in addition to
being served electronically through its counsel of record (who had never withdrawn their
appearances), Defendant was also served through its Registered Agent, Russell Petty, on
February 26, 2021. Accordingly, we find that Defendant was properly noticed and served
with Plaintiff's Motion to Reinstate and for Entry of Judgment such that it had the
opportunity to respond to the motion had it desired to do so. We therefore reject
Defendant's claim otherwise.
Conclusion
For the foregoing reasons, Defendant's Motion to Set Aside Entry of Judgment
[Dkt. 38] is not well-taken and it is therefore DENIED. The remaining motions pending
on the docket will be addressed by the Court in due course.
IT IS SO ORDERED.

2/10/2022
Date: _____________________________

_______________________________
SARAH EVANS BARKER, JUDGE
United States District Court
Southern District of Indiana

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Distribution:
Christopher Steven Drewry
DREWRY SIMMONS VORNEHM, LLP (Carmel)
[e-mail]
Daniel Michael Drewry
DREWRY SIMMONS VORNEHM, LLP (Carmel)
[e-mail]
Donald D. Schwartz
ARNOLD AND KADJAN, LLP
[e-mail]

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