Carnell v. TNMO Healthcare LLC
Filing
17
ORDER CONDITIONALLY GRANTING PLAINTIFFS MOTION TO DISMISS WITHOUT PREJUDICE SUBJECT TO PLAINTIFFS ACCEPTANCE OF TERMS OF DISMISSAL 7 . Signed by Chief Judge J. Daniel Breen on 10/3/13. (Breen, J.)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
EASTERN DIVISION
AMY CARNELL,
Plaintiff,
v.
No. 13-1201
TMNO HEALTHCARE, LLC d/b/a
AVALON HOSPICE and CURO
HEALTH SERVICES, INC.,
Defendants.
_____________________________________________________________________________
ORDER CONDITIONALLY GRANTING PLAINTIFF’S MOTION TO DISMISS WITHOUT
PREJUDICE SUBJECT TO PLAINTIFF’S ACCEPTANCE OF TERMS OF DISMISSAL
_____________________________________________________________________________
Before the Court is the motion of Plaintiff, Amy Carnell, to dismiss her case against
Defendants, TMNO Healthcare, LLC d/b/a Avalon Hospice (“Avalon”) and Curo Health
Services, LLC, (“Curo”)1 without prejudice. (Docket Entry (“D.E.”) 7.) Defendants objected to
Carnell’s Motion and urged the Court to either dismiss the case with prejudice or deny the
motion so that the case may proceed. (D.E. 8.)
I. BACKGROUND
Plaintiff is a resident of Chester County, Tennessee and was employed as a nurse for
Avalon, a Delaware limited liability company, from May 2011 until February 24, 2012. Curo
Health Services, LLC is also a Delaware limited liability company, and is the parent company of
Avalon. On February 21, 2013, Carnell filed her Complaint against Defendants in the Circuit
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Curo is improperly identified as a corporation in Plaintiff’s Complaint. (D.E. 1-2.)
Court of Madison County, Tennessee claiming retaliatory discharge under the Tennessee Public
Protection Act (the “TPPA”),2 Tenn. Code Ann. § 50-1-304 (2012), and under Tennessee
common law. Specifically, Plaintiff asserts that she was constructively terminated for reporting
and refusing to participate in unlicensed medical practice and falsification of timesheets, doctor’s
orders, and nurses’ signatures. (D.E. 1-2 at ¶ 7.)
Summonses for Curo and Avalon were issued on May 21, 2013 and served on May 31
and June 11, 2013, respectively. Defendants removed the lawsuit to this Court on June 26, 2013
(D.E. 1) and filed their Answers on July 3, 2013. (D.E. 3 & 4.) On July 15, 2013, Carnell filed
the present Motion to Dismiss. (D.E. 7.) To date, the parties have not engaged in discovery or
filed any dispositive motions.
II. ANALYSIS
Under Federal Rule of Civil Procedure 41(a)(2), after an answer has been filed “an action
may be dismissed by the plaintiff’s request only by court order, on terms that the court considers
proper.” It is within the district court’s “sound discretion,” Grover v. Eli Lilly & Co., 33 F.3d
716, 718 (6th Cir. 1994) (citing Banque de Depots v. Nat’l Bank of Detroit, 491 F.2d 753, 757
(6th Cir. 1974), under Rule 41(a)(2) to grant or deny dismissal in order to “protect the
nonmovant from unfair treatment,” id. (citing Ikospentakis v. Thalassic S.S. Agency, 915 F.2d
176, 177 (5th Cir. 1990)). To ensure fair treatment, the district court must determine whether
dismissal will result in “plain legal prejudice” to the defendant, rather than the “mere prospect of
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The TPPA is a “whistleblower” statute that provides a cause of action for employees “discharged or terminated
solely for refusing to participate in, or for refusing to remain silent about, illegal activities.” Tenn. Code. Ann. § 501-304(b); see Tenn. Code Ann. § 50-1-304(d)(1) (providing for the cause of action).
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a second lawsuit.” Id. (citing Cone v. W. Va. Pulp & Paper Co., 330 U.S. 212, 217, 67 S. Ct.
752, 755, 91 L. Ed. 849 (1947); Kovalic v. DEC Int’l, Inc., 855 F.2d 471, 473 (7th Cir. 1988)).
A. Absolute Defense
Under this standard, the Sixth Circuit Court of Appeals has held that “when the law
clearly dictates a result for the defendant, it is unfair to subject him to continued exposure to
potential liability by dismissing the case without prejudice.” Grover, 33 F.3d at 719. Thus, plain
legal prejudice is “readily” found “where dismissal results in stripping a defendant of an absolute
defense.” Rosenthal v. Bridgestone/Firestone, Inc., 217 F. App’x 498, 500 (6th Cir. 2007); see
Phillips v. Ill. Cent. Gulf R.R., 874 F.2d 984, 987 (5th Cir. 1989) (plain legal prejudice because
defendant “would be stripped of absolute defense” in second suit); see also Kern v. TXO Prod.
Corp., 738 F.2d 968, 970 (8th Cir. 1984) (“If defendant has already won its case, reimbursement
of fees and expenses cannot make it whole from the injury of being sued again, perhaps this time
to lose.”). Alternatively, “[w]here a defense is still available in [a] second action, courts are less
likely to find plain legal prejudice.” Rosenthal, 217 F. App’x at 501; see, e.g., Manshack v. Sw.
Elec. Power Co., 915 F.2d 172, 175 (5th Cir. 1990) (finding no plain legal prejudice where
defendant could raise the same defense in a second action).
At issue here is whether Defendants have an absolute defense to Plaintiff’s claims under
Tennessee Rule of Civil Procedure 4.01(3) for intentionally delaying the issuance of a summons
or service of process. It is a well-settled rule that federal courts should apply state procedural
rules to “actions in state court prior to their removal to federal court.” Wilkey v. Golden Feather
Realty Servs., Inc., No. 1:06-cv-72, 2006 WL 2478317, at *9–10 (E.D. Tenn. Aug. 25, 2006)
(surveying the issue at length); see, e.g., United Steel Supply, LLC v. Buller, No. 3:13-CV-
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00362-H, 2013 WL 3790913, at *2–4 (W.D. Ky. July 19, 2013) (holding that “the State Rules
govern[] actions taken while the matter remains in state court, and federal rules of procedure
govern action taken post-removal”); Eccles v. Nat’l Semiconductor Corp., 10 F. Supp. 2d 514,
519 (D. Md. 1998) (stating that it is “well-settled that state law governs the sufficiency and
service of process before removal”).
Under the Tennessee Rules, “[i]f a plaintiff or counsel for plaintiff . . . intentionally
causes delay of prompt issuance of summons or prompt service of a summons, filing of the
complaint . . . is ineffective.” Tenn. R. Civ. Proc. 4.01(3). Therefore, if the original complaint is
deemed ineffective and the applicable statute of limitations has run, the plaintiff’s complaint
“must be dismissed as time-barred.” Jones v. Vasu, 326 S.W.3d 577, 581 (Tenn. Ct. App. 2010).
In applying this rule, Tennessee courts have made clear that “it is the intent to withhold service
of process that is the test.” Id. at 581 (emphasis added). The courts have also consistently
rejected any excuses for delay, holding that “an intentional delay under [4.01(3)] mandates a
conclusion that the original complaint was not effectively filed.” Jones v. Cox, 316 S.W.3d 616,
621 (Tenn. Ct. App. 2008) (service delayed awaiting resolution of underlying case for legal
malpractice claim); see also Vasu, 326 S.W.3d at 581 (service of process delayed “in order to
obtain an expert opinion to support the medical malpractice claim”); Estate of Butler v.
Lamplighter Apartments, 278 S.W.3d 321, 323 (Tenn. Ct. App. 2008) (delaying service of
process in hopes of settling case).
Defendants assert that Carnell “intentionally delayed causing summons to issue and
serving Defendants,” and they therefore have a “complete defense to the instant action.” (D.E. 8
at 6.) If established, this would indeed be a complete defense because the statute of limitations
for Plaintiff’s retaliatory discharge claim ran no later than February 24, 2013—one year from
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Plaintiff’s resignation. See Weber v. Moses, 938 S.W.2d 387, 389 (Tenn. 1996) (recognizing that
retaliatory discharge falls under the general one-year statue of limitations).
The time between when Plaintiff initiated his lawsuit, caused summonses to issue, and
ultimately served the Defendants was between three and four months. While Defendants supply
no direct evidence of intentional delay, and Plaintiff’s counsel does not admit as much,
Defendants urge the Court to infer this intent. Defendants note that during the months between
when the Complaint was filed and process was served, Plaintiff’s counsel was in open and
regular communication with Defense counsel regarding lawsuits on behalf of other former
employees of the same facility. In particular, Plaintiff’s counsel was involved in settling a case
with Defendants, Whitelaw v. Curo Healthcare Svcs., Inc., TNMO Healthcare, LLC d/b/a
Avalon Hospice, and Regency Healthcare Centers, Inc., No. 1:12-cv-1224, filing another suit
against Defendants, Pence v. TNMO Healthcare, LLC d/b/a/ Avalon Hospice and Curo Health
Svcs., Inc., No. 1:13-cv-1099, and causing summonses to issue and serving the summonses on
Defendants in another suit, Teague v. TNMO Healthcare, LLC d/b/a Avalon Hospice and Curo
Health Svcs., Inc., No. C-13-13, Madison Cnty. Cir. Ct.).
Although Defendants present a well-reasoned argument, the Court is unpersuaded that
Tennessee law “clearly dictates a result in their favor.” Grover, 33 F.3d at 719. It is unclear
whether Tennessee Courts would deem an inference, albeit compelling, of intentional delay
under Rule 4.01(3) sufficient to render a complaint ineffective. While Defendants cite Jones v.
Cox in support of their argument, the Court finds this case readily distinguishable. In Cox, the
attorney admitted to delaying serving process on defendant for around nine months. 316 S.W.3d
at 619–620. Here, however, Plaintiffs’ counsel makes no such admission, and Defendants cite no
authority permitting inferential intent. See, e.g., Vasu, 326 S.W.3d at 578, 581 (holding the filing
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of the complaint ineffective due to counsel’s admitted delay of eleven months); Estate of Butler,
278 S.W.3d at 323 (“Plaintiff’s counsel admitted that she made a conscious, voluntary decision
to prevent service of process.”) Therefore, the Court finds that dismissal of the case without
prejudice will not cause Defendant to suffer plain legal prejudice by losing an absolute defense.
However, the analysis does not end here.
B. Factor Test
When legal authority does not clearly dictate a result in the defendant’s favor, or a
defense is still available in a second action, courts must scrutinize additional factors to determine
whether a voluntary dismissal without prejudice will result in plain legal prejudice. In Grover,
the Sixth Circuit Court announced four factors which should be considered: (1) the effort and
expense exhausted by the defendant in preparation for trial; (2) any excessive delay or lack of
diligence by the plaintiff; (3) an insufficient explanation of the need for dismissal; and (4)
whether a motion for summary judgment has been filed. 33 F.3d at 718 (citing Kovalic, 855 F.2d
at 474). While instructive, these factors are “simply a guide,” “not an exclusive or mandatory
list.” Rosenthal, 217 F. App’x at 502. Thus, “[t]here is no requirement that each of the [] factors
be resolved in favor of the moving party before dismissal is appropriate.” Id. Defendants
specifically address these, as well as additional factors in their Objection. The Court will
consider each factor in turn.
1. Effort and Expense in Preparation for Trial
In regard to the first Grover factor, Defendants assert that
[a]lthough the case is at an early stage procedurally speaking, Defendants have
already gone to considerable effort and expense preparing for litigation and
conducting the proceedings that have occurred to date. Defendants have viable
defenses to Plaintiff’s Complaint and have already undertaken extensive
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investigation of those defenses, have prepared for dispositive motions on those
issues, and have expended time and resources to this end that are not immediately
apparent from a simple review of the docket. (D.E. 8 at 5–6.)
As the Defendants concede, and Plaintiff states, this case in only in its “infant stage.” (D.E. 7-1
at 3.) The Defendants only answered the complaint on July 3, 2013, no dispositive motions have
been filed, and the parties have yet to engage in any discovery.
The described effort and expense incurred by Defendants here fails to meet the threshold
level established by the courts for finding plain legal prejudice. Compare, Elektra Entm’t Grp.,
Inc. v. Licata, No. 07-CV-569, 2008 WL 4059796, at *3 (S.D. Ohio Aug. 25, 2008) (defendant’s
effort and expense were insubstantial even though the parties had engaged in some limited
discovery); Dowling v. Select Portfolio Servicing, Inc., No. 05-CV-00049, 2007 WL 2815567, at
* 3 (S.D. Ohio Sept. 25, 2007) (no plain legal prejudice where discovery had not been “unusually
burdensome” and defendant had not sufficiently detailed its expenditures); and Choctaw Racing
Svcs., Inc. v. Kentucky Horsemen’s Benevolent & Protective Ass’n., 3:07CV-237-S, 2007 WL
3124693 at, *2 (W.D. Ky. Oct. 24, 2007) (no prejudice where a “mere five months has passed
since the filing of the action”); with Grover, 33 F.3d at 718–19 (plain legal prejudice found
where dismissal was sought after five years of litigation); and Rast v. City of Pigeon Forge, No.
3:10-CV-52, 2011 WL 884041, at *3 (E.D. Tenn. Mar. 11, 2011) (defendant undertook
substantial effort and expense after engaging in discovery; serving interrogatories, requests for
production, and requests for admission; scheduling depositions; and filing a motion for summary
judgment).
Furthermore, Defendants cannot prevail on this factor even if a re-filing of the case
would force them to “re-assert, investigate, and conduct discovery regarding this technical and
fact-driven defense over two years after the applicable events and perhaps in the face of
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unknown intervening events.” (D.E. 8.) Speculative assertions such as these cannot establish a
basis for finding plain legal prejudice. See, e.g., Dowling, 2007 WL 2815567, at *3 (rejecting
similar claims as “vague and conclusory”). For these reasons, the Court finds that the first
Grover factor favors granting Carnell’s motion.
2. Excessive Delay or Lack of Diligence
Defendants maintain that Carnell’s delay in causing to issue and serving the summonses
is indicative of her dilatory prosecutorial efforts and militates in favor of finding plain legal
prejudice. As discussed before, Defendants present a compelling argument that Carnell’s delay in
these respects was intentional in light of the open communication between counsel for both
parties. However, the Court cannot conclude that Plaintiff was necessarily lax in the prosecution
of her case on this basis alone. A mere two days had passed from when Defendants filed their
answer to when Carnell notified them of her intent to file the motion for dismissal, and
Defendants do not allege that Plaintiff’s counsel was otherwise unresponsive or uncooperative.
Contra Rast, 2011 WL 884041, at *3 (finding prejudice where counsel was unresponsive to
discovery requests and failed to appear at scheduled depositions). Therefore, the second factor
also weighs in favor of dismissal without prejudice.
3. Plaintiff’s Explanation of the Need for Dismissal
Carnell requested dismissal without prejudice so as “to have ample time to investigate
and assess the facts of the case prior to the litigation process proceeding.” (D.E. 7-1 at 1.) While
this justification is seemingly minimal, the Court cannot agree with Defendants that this results
in a finding of plain legal prejudice. Parties seeking dismissal without prejudice are not required
to give an exact or detailed reasoning for their actions so long as there is some logical
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justification. See, e.g., Quiktrak, Inc. v. Hoffman, 1:05-CV-384, 2005 WL 2465735, at *1–3
(W.D. Mich. Oct. 6, 2005) (finding sufficient the plaintiff’s need to dismiss “so that it is not
precluded from re-filing if additional facts are revealed”); Allen v. Abbott Laboratories, 11-146DLB, 2012 WL 10508 (E.D. Ky. Jan. 3, 2012) (holding that the plaintiffs’ explanations were
inadequate because they “do not set forth the standard for dismissal without prejudice, do not cite
any case law, and do not put forth any facts in support of their position that dismissal without
prejudice would be suitable”). Thus, this factor also weighs in favor of granting Carnell’s
motion.
4. Motion for Summary Judgment
No motion for summary judgment has been filed in this case. Therefore, the fourth
Grover factor supports dismissal of the case without prejudice.
5. Additional Factors
In addition to the Grover factors, Defendants argue that they will suffer plain legal
prejudice if Carnell’s motion is granted because they will incur additional document preservation
responsibilities and could be liable for further backpay. While the Court is not unsympathetic to
these claims, the Defendants cite no authority indicating that these common expenses of
litigation can serve as a basis for establishing plain legal prejudice. As a result, the Court finds
that these additional factors fail to establish that Defendants will be prejudiced by a grant of
Plaintiff’s Motion to Dismiss.
C. Conditions Imposed on Dismissal
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Finding that dismissal without prejudice is appropriate, the Court will also exercise its
discretion to impose certain conditions on dismissal. See Fed. R. Civ. P. 41(a)(2) (the court may
dismiss an action “on terms that the court considers proper”); 9 Charles Alan Wright & Arthur
Miller, Federal Practice and Procedure § 2366 (3d ed. 2013) (stating that “usually the district
judge at least should require that the plaintiff pay the costs of the litigation and that practice has
become commonplace,” and that “[t]he court also may impose certain conditions on subsequent
litigation”). Dismissal without prejudice shall be conditioned on Carnell’s payment of
Defendants’ $400 filing fee incurred in removal of this case. Additionally, if Carnell decides to
re-file suit against Defendants in this matter, the filing must be made in this Court.3
III. CONCLUSION
In sum, the Court finds that Defendants have failed to establish that a dismissal without
prejudice will cause them plain legal prejudice. Therefore, Plaintiff is ordered to file a statement
within eleven days of this order either accepting the conditions imposed by the Court and
submitting the $400 payment or withdrawing its motion. If Plaintiff accepts, the Court will enter
an order dismissing the case without prejudice.
IT IS SO ORDERED this 3rd day of October, 2013.
s/ J. DANIEL BREEN
CHIEF UNITED STATES DISTRICT JUDGE
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Plaintiff is not required to accept these conditions, and may instead choose to withdraw her motion to dismiss. See
Michigan Surgery Inv., LLC v. Arman, 627 F.3d 572, 577 (6th Cir. 2010).
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