CML Metals Corporation v. First Union Rail et al
MEMORANDUM DECISION and Order denying 79 Motion for Judgment on the Pleadings. Plaintiffs/Counterclaim Defendants CML Metals Corp. and PIC Railroad Inc's Third Amended Complaint 65 is DISMISSED without prejudice. Signed by Judge Jill N. Parrish on 3/20/17. (jlw)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
CML METALS CORP. and PIC RAILROAD,
INC. d/b/a CML RAILROAD, INC.,
MEMORANDUM DECISION AND
ORDER DISMISSING PLAINTIFF’S
COMPLAINT WITHOUT PREJUDICE
AND DISMISSING AS MOOT
DEFENDANT’S MOTION FOR
JUDGMENT ON THE PLEADINGS
Case No. 2:15-cv-00152-JNP-DBP
FIRST UNION RAIL CORP., HELMPACIFIC LEASING, and HELM FINANCIAL District Judge Jill N. Parrish
ALONG WITH RELATED CLAIMS.
On February 27, 2017, this court issued an Order to Show Cause, (Docket No. 102),
which required Plaintiffs/Counterclaim Defendants CML Metals Corp. and PIC Railroad, Inc.
(collectively, “CML”) to explain to the court why they had not responded to
Defendant/Counterclaim Plaintiff First Union Rail Corp.’s (“First Union”) Motion for Judgment
on the Pleadings filed on July 20, 2016, (Docket No. 79). The court indicated that, absent some
showing of good reason for the neglect, Plaintiffs’ complaint would be dismissed without
prejudice as a sanction.
CML responded the next day, reiterating that they had made a general assignment of
assets (including this lawsuit) for the benefit of creditors to Guidepoint (“the Assignee”) in Utah
State court. (Docket No. 103). CML explained that this assignment extinguished any legal or
financial interest they had in their complaint and indicated that they would not oppose a
dismissal without prejudice.
Counterclaim Defendants Gilbert Development and Black Iron, LLC (collectively,
“Black Iron”) soon responded to the Order, urging that, in light of the assignment of their interest
in the lawsuit, CML was not the proper party in interest and should not be allowed to respond to
the Order. (Docket No. 104). Black Iron also suggested that the Assignee be somehow joined in
the proceedings as the proper party in interest.
First Union also responded, (Docket No. 105), objecting to any dismissal of CML’s
complaint without prejudice and requesting that the court dismiss the complaint with prejudice
either for failure to prosecute or as a matter of law as articulated in its Motion for Judgment on
the Pleadings, (Docket No. 79).
As indicated in its previous Order to Show Cause, this court is not inclined to grant First
Union’s Motion for Judgment on the Pleadings on the merits without the benefit of adversarial
briefing. First Union’s response does not assuage the court’s concerns regarding the effect that
an on-the-merits resolution here would have on related claims (both within this case and in
pending and future cases). The potential for disruption of related proceedings is unwarranted and
unnecessary in this instance. Moreover, while First Union’s Motion is facially credible, the court
is not convinced it could fully withstand an evaluation on the merits.
The court believes that a sanction for failure to prosecute is appropriate in this case. See
Fed. R. Civ. P. 41(b) (providing for involuntary dismissal); Rogers v. Andrus Transp. Servs., 502
F.3d 1147, 1151 (10th Cir. 2007) (“Rule 41(b) has long been interpreted to permit courts to
dismiss actions sua sponte for plaintiff’s failure to prosecute.” (internal alterations and quotations
omitted)); Reed v. Bennett, 312 F.3d 1190, 1195 (10th Cir. 2002) (“A district court undoubtedly
has discretion to sanction a party for failing to prosecute or defend a case . . . [and] [s]uch
sanctions may include dismissing the party’s case . . . .”). The court acknowledges, as Black Iron
has suggested, that CML is likely not the proper party in interest here and is therefore not the
appropriate target of either the Order or any resulting sanction. But even if the Assignee is the
proper party in interest here, the sanction of dismissal for failure to prosecute is still appropriate.
The Assignee is ostensibly aware of this lawsuit as it is listed among the assets in the general
assignment filed with the state court. (Docket No. 104, at 23). Thus, the Assignee has had ample
notice and opportunity to take over prosecution of CML’s complaint or to take affirmative steps
to join the proceedings but has failed to do so. And, even if the Assignee is somehow justifiably
unaware of the status of this lawsuit, dismissal here will be without prejudice, allowing for
pursuit of the claims at a later date. Since dismissal here is without prejudice, this court need not
evaluate any additional factors. See Nasious v. Two Unknown B.I.C.E. Agents, 492 F.3d 1158,
1162 (10th Cir. 2007) (explaining that an order of dismissal without prejudice may be entered
“without attention to any particular procedures”); AdvantEdge Bus. Grp. v. Thomas E.
Mestmaker & Assocs., Inc., 552 F.3d 1233, 1236 (10th Cir. 2009) (applying that standard to a
dismissal for failure to prosecute).
For the foregoing reasons, the court ORDERS the following:
1) Plaintiffs/Counterclaim Defendants CML Metals Corp. and PIC Railroad, Inc.’s Third
Amended Complaint (Docket No. 65) is DISMISSED without prejudice.
2) Defendant/Counterclaim Plaintiff First Union’s Motion for Judgment on the
Pleadings (Docket No. 79) is DENIED as moot.
Signed this 20th day of March, 2017.
BY THE COURT
Jill N. Parrish
United States District Court Judge
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