Talkington et al v. New York Life Insurance and Annuity Corporation et al
ORDER granting in part and denying in part 15 Motion to Dismiss; denying as moot 16 Motion for Judgment on the Pleadings, as more fully set out. Signed by Honorable David L. Russell on 4/10/17. (jw)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
JANETTA L. TALKINGTON,
Individually, and as power of attorney for
DOROTHY L. CANARY,
MICHAEL D. TALKINGTON, and
EDDY R. CANARY,
NEW YORK LIFE INSURANCE &
ANNUITY CORPORATION, a foreign
THE ESTATE OF ROSE BEATTIE,
Case No. CIV-16-1255-R
Before the Court is Plaintiffs’ Motion for Voluntary Dismissal without Prejudice
pursuant to Federal Rule of Civil Procedure 41(a)(2). [Doc. 15]. Defendant New York Life
Insurance & Annuity Corporation opposes the Motion and alternatively asks the Court to
impose appropriate conditions on any dismissal without prejudice. [Doc. 17]. For the
reasons that follow, Plaintiffs’ Motion is GRANTED IN PART and DENIED IN PART.
This case stems from Plaintiffs’ purchase of life insurance policies from Defendant
New York Life Insurance & Annuity Corporation (NYLIAC). Plaintiffs originally sued
NYLIAC and the Estate of Rose Beattie in state court. Beattie is a now-deceased life
insurance agent from NYLIAC who allegedly made false representations to Plaintiffs
regarding their ability to borrow from the cash value of their policies. NYLIAC removed,
asserting diversity jurisdiction under 28 U.S.C. § 1332. Though Plaintiffs, citizens of
Oklahoma, and NYLIAC, a citizen of Delaware and New York, were seemingly diverse,
the presence of the Beattie Estate, a citizen of Oklahoma, spoiled complete diversity. [See
Doc. 14, at 2]. In removing, NYLIAC argued that the Beattie Estate had been fraudulently
joined because the Beattie State had no legal cognizable existence, as a personal
representative had not yet been appointed in state court. This Court agreed, denied
Plaintiff’s Motion to Remand, and dismissed the Beattie Estate. [Doc. 14]. Plaintiffs now
ask the Court to dismiss their suit without prejudice.
Under Rule 41(a)(2), “an action may be dismissed at the plaintiff's request only by
court order, on terms that the court considers proper.” Fed. R. Civ. P. 41(a)(2). “The rule
is designed primarily to prevent voluntary dismissals which unfairly affect the other side,
and to permit the imposition of curative conditions.” Phillips USA, Inc. v. Allflex USA, Inc.,
77 F.3d 354, 357 (10th Cir. 1996) (quotation omitted). So “[a]bsent ‘legal prejudice’ to the
defendant, the district court normally should grant such a dismissal.” Ohlander v. Larson,
114 F.3d 1531, 1537 (10th Cir. 1997). Brown v. Baeke, 413 F.3d 1121, 1123 (10th Cir.
2005). And to be sure, “it is not an abuse of discretion for the district court to dismiss an
action without prejudice even where the plaintiff’s only motive is to recommence the action
in state court.” American Nat. Bank and Trust Co. v. Bic Corp., 931 F.2d 1411, 1412 (10th
In weighing dismissal—that is, deciding whether the opposing party will suffer legal
prejudice if the court grants the motion without prejudice—the Tenth Circuit directs courts
to consider: (1) “the opposing party’s effort and expense in preparing for trial;” (2)
“excessive delay and lack of diligence on the part of the movant;” (3) insufficient
explanation of the need for a dismissal; and (4) “the present stage of litigation.” Phillips,
77 F.3d at 358. Legal prejudice, though, “does not arise simply because a second action
has been or may be filed against the defendant.” Batton v. Mashburn, 2016 WL 1629392,
at *1 (W.D. Okla. Apr. 22, 2016). After all, “that is often the whole point in dismissing a
case without prejudice.” Id.
A quick rundown of these factors suggests dismissal without prejudice is
appropriate. Both the NYLIAC’s effort and expense thus far in preparing for trial have
been minimal. Of the small amount of litigating thus far, nearly all of it was devoted to the
question of diversity jurisdiction. Further, the parties have not conducted written discovery
or taken written depositions. NYLIAC did of course move for judgment on the pleadings
[Doc. 16], but chose to do so a week after Plaintiffs moved to dismiss this case. As far as
any delay on the part of Plaintiffs, the Court is sympathetic to the difficulties they have
faced in having a state court appoint a personal representative to the Beattie Estate so that
it can become a legal entity. Finally, Plaintiffs’ reason for dismissal seems rational: they
need the state court to appoint a personal representative so that the litigation can proceed
against the Beattie Estate in state court. Given all this, dismissal without prejudice is
The Court acknowledges NYLIAC’s extensive briefing arguing that dismissal without prejudice is
improper because Plaintiffs’ claims are futile, i.e., will fail in state court anyway. That, though, is an issue
better left for summary judgment.
That said, the Court finds as reasonable NYLIAC’s request that the Court impose
certain conditions on any dismissal without prejudice. NYLIAC asks that in the event of
dismissal, Plaintiffs should have to pay the fees and costs incurred by NYLIAC in
defending this action in federal court. Plaintiffs may of course have been unaware that the
Beattie Estate did not yet legally exist when they filed this suit in state court on August 5,
2016. Yet they would have certainly been put on notice that the Beattie Estate was not a
legal entity—and thus could not serve as a diversity-spoiling party—by November 1, 2016,
when NYLIAC filed its notice of removal based on fraudulent joinder. Rather than moving
to dismiss their claims then, Planitiffs moved to remand, resulting in an unnecessary round
of briefing. Should Plaintiffs refile this suit in state court against NYLIAC, Plaintiffs will
be directed to reimburse NYLIAC for any costs and fees incurred in defending this action
in federal court. See, e.g., AeroTech, Inc. v. Estes, 110 F.3d 1523, 1528 (10th Cir. 1997)
(“[w]hen a plaintiff dismisses an action without prejudice, a district court may seek to
reimburse the defendant for his attorneys’ fees because he faces a risk that the plaintiff will
refile the suit and impose duplicative expenses upon him”). The Court retains jurisdiction
to hear such a motion. See Cactus Petroleum Corp. v. Continental Resources, Inc., 2013
WL 5656107 (W.D. Okla. Oct. 16, 2013).
In light of this ruling, NYLIAC’s Motion for Judgment on the Pleadings [Doc. No.
16] is DENIED as moot.
IT IS SO ORDERED this 10th day of April 2017.
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