National Interstate Insurance Company v. Foust Fleet Services, LLC et al

Filing 114

MEMORANDUM AND ORDER granting 94 MOTION to Dismiss Party Corporate Claims Service, Inc. Signed by Chief District Judge Julie A. Robinson on 8/7/2019. (ydm)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
NATIONAL INTERSTATE INSURANCE
COMPANY,
Plaintiff,
v.
FOUST FLEET SERVICES, LLC, et al.,
Defendants.
Case No. 2:18-CV-2103-JAR-ADM
FOUST FLEET SERVICES, LLC,
Counter-claimant,
v.
CORPORATE CLAIM SERVICE, INC.,
Counterclaim Defendant.

MEMORANDUM AND ORDER
This matter is before the Court on Plaintiff National Interstate Insurance Company’s
(“NIIC”) Motion to Dismiss Claims Against Corporate Claims Service, Inc. Without Prejudice
(Doc. 94). Defendant Corporate Claim Service, Inc. (“CCS”) objects to any dismissal without
prejudice, arguing that it will suffer legal prejudice as a result of any such dismissal.
NIIC brought this declaratory judgment action against Foust Fleet Services, LLC
(“Foust”), Tempa White, and Brandy Burda.1 Foust then filed counterclaims against both NIIC

1

Doc. 1.

and CCS for bad faith and breach of contract.2 NIIC subsequently filed a crossclaim against
CCS for breach of contract, contractual indemnity, noncontractual indemnity and contribution,
and negligence.3 CCS has not asserted any claims or counterclaims in this action.
NIIC has settled its claims against Foust, White, and Burda, as well as Foust’s
counterclaims against NIIC, and those claims have been dismissed.4 Additionally, Foust has
dismissed all its claims with prejudice, including its claims against CCS.5 Accordingly, the only
claims that remain in this action are NIIC’s crossclaims against CCS. For the reasons discussed
below, the Court grants NIIC’s motion to dismiss without prejudice.
I.

Standard
Rule 41(a)(2) controls voluntary dismissals and provides, “an action may be dismissed at

the plaintiff's request only by court order, on terms that the court considers proper. . . . Unless the
order states otherwise, a dismissal under this paragraph (2) is without prejudice.” “[A]bsent
‘legal prejudice’ to the defendant, the district court normally should grant such a dismissal.”6
“Prejudice does not arise simply because a second action has been or may be filed against the
defendant.”7 Courts consider “the opposing party’s effort and expense in preparing for trial;
excessive delay and lack of diligence on the part of the movant; insufficient explanation of the
need for a dismissal; and the present stage of litigation.”8

2

Doc. 30.

3

Doc. 50.

4

Doc. 101.

5

Doc. 98.

6

Brown v. Baeke, 413 F.3d 1121, 1123 (10th Cir. 2005) (citing Ohlander v. Larson, 114 F.3d 1531, 1537
(10th Cir. 1997)).
7

Id. at 1124.

8

Id. (citing Ohlander, 114 F.3d at 1537).

2

II.

Analysis
Defendant asserts three primary grounds for legal prejudice: (1) CCS is defending claims

brought by Foust in this action, and if NIIC’s claims are dismissed and then refiled, CCS will be
forced to defend itself twice based on the same underlying facts; (2) this Court is familiar with
the issues and any motion for summary judgment should be ruled on by this Court; and (3) CCS
has already incurred significant efforts and expense, including three depositions, interviewing
fact witnesses, and reviewing discovery. NIIC asserts that no legal prejudice exists based on
these contentions, and further, NIIC stipulates that “should there be further litigation between
CCS and [NIIC], all discovery exchanged among the parties in this action may be used in such
later action, subject to the restrictions now in place on such material.”9 The Court considers
CCS’s arguments in turn.
As an initial matter, between the filing of CCS’s Response and this Order, Foust has
dismissed all of its claims in this action, including its claims against CCS, with prejudice.10
Accordingly, to the extent CCS asserts that it will suffer legal prejudice by being forced to
continue this lawsuit with Foust while facing a potential future lawsuit from NIIC, this assertion
is now unavailing.
The Court is similarly unpersuaded by CCS’s contention that it is entitled to a summary
judgment ruling by this Court. The discovery deadline is August 30, 2019, the dispositive
motion deadline is October 1, 2019, and no dispositive motions have been filed. As discussed
above, “[p]rejudice does not arise simply because a second action has been or may be filed

9

Doc. 95 at 3.

10

Doc. 98.

3

against the defendant.”11 The fact that CCS may be required to defend a second action in another
court before another judge does not amount to legal prejudice here.
Finally, the Court finds that NIIC’s stipulation that CCS may utilize the discovery
exchanged in this case in a future lawsuit sufficiently mitigates any duplicative efforts or expense
that CCS may incur in the event of a second lawsuit by NIIC. The limited discovery that has
been conducted will not be duplicative of any future discovery in another suit.
Under the Tenth Circuit’s factors discussed above, the Court finds that dismissal without
prejudice is warranted. NIIC’s stipulation regarding discovery sufficiently accounts for the
expense and effort expended by CCS, and there is no evidence of any delay or lack of diligence
in pursuing this dismissal on behalf of NIIC.12 NIIC has sufficiently explained its reasoning in
seeking this dismissal—it has settled all other claims in this case and has an ongoing business
relationship with CCS. And finally, this litigation is still in its relatively early stages as
discovery is not yet complete and no dispositive motions have been filed.
IT IS THEREFORE ORDERED BY THE COURT that NIIC’s Motion to Dismiss
Claims Against Corporate Claims Service, Inc. Without Prejudice (Doc. 94) under Fed. R. Civ.
P. 41(a)(2), subject to NIIC’s stipulation in Doc. 95, is granted.
IT IS SO ORDERED.
Dated: August 7, 2019
S/ Julie A. Robinson
JULIE A. ROBINSON
CHIEF UNITED STATES DISTRICT JUDGE

11

Brown v. Baeke, 413 F.3d 1121, 1124 (10th Cir. 2005).

12

Indeed, this motion was filed one week after NIIC first notified the Court of an anticipated settlement.

Doc. 89.

4