Security Alarm Financing Enterprises, Inc. v. Parmer et al

Filing 166

MEMORANDUM OPINION AND ORDER GRANTING MOTION FOR VOLUNTARY DISMISSAL WITHOUT PREJUDICE. Security Alarm Financing Enterprises, Inc.'s motion for voluntary dismissal ECF No. 147 is GRANTED WITHOUT PREJUDICE. It is further ORDERED that this civil action be DISMISSED AND STRICKEN from the active docket of this Court. Signed by Senior Judge Frederick P. Stamp, Jr. on 5/22/14. (mh)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
SECURITY ALARM FINANCING
ENTERPRISES, INC.,
Plaintiff,
v.

Civil Action No. 1:12CV88
(STAMP)

BETTY PARMER, SECURE US, INC.
and MITCH BROZIK,
Defendants.
MEMORANDUM OPINION AND ORDER
GRANTING MOTION FOR VOLUNTARY DISMISSAL WITHOUT PREJUDICE1
I.
Originally,

Procedural History

Security

Alarm

Financing

Enterprises,

Inc.

(“SAFE”) filed the above-styled civil action in this Court only
against the defendants, Secure US, Inc. (“Secure US”) and Betty
Parmer (“Parmer”).

In its complaint, SAFE asserted a claim of

successor liability as a result of the sale of Secure US, in
addition

to

seeking

a

declaration

that

SAFE’s

judgment

lien

continues to attach to Secure US’s assets, as the sale of Secure US
was not commercially reasonable.

Secure US then filed a motion to

dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure
to state a claim, which SAFE opposed.

Thereafter, SAFE filed a

request for entry of default as to Parmer, as Parmer failed to file
a timely responsive pleading to SAFE’s complaint.
1

This Court then

This Court notes that, for reasons more fully explained
below, this Court construes SAFE’s notice of voluntary dismissal as
a motion for voluntary dismissal.

ordered that default be entered against Parmer.

After default was

entered, SAFE requested that this Court enter a default judgment
against Parmer.
default.2

At that time, Parmer filed a motion to set aside

SAFE then filed a motion to amend its complaint wherein

it sought to add two additional claims and one additional party.
In its memorandum opinion and order, this Court first denied
Secure US’s motion to dismiss, as this Court found that SAFE had
stated sufficient factual allegations to state a claim upon which
relief may be granted.

This Court then determined that good cause

existed to set aside default as to Parmer, and denied SAFE’s motion
for default judgment.

As to the plaintiff’s amended complaint,

this Court found that granting SAFE leave to amend would not
prejudice the defendants, nor were the amendments sought futile or
brought in bad faith.
Thereafter, SAFE filed its amended complaint, wherein it
added claims for fraud and conspiracy to commit fraud. Included in
these two additional claims is an additional party, defendant Mitch
Brozik (“Brozik”).

In response to the claims, Brozik filed a

motion to dismiss seeking to dismiss both Counts III and IV, which
are

SAFE’s

claims

respectively.

for

fraud

and

conspiracy

to

commit

fraud

This Court denied Brozik’s motion to dismiss, but

2

Parmer entitled this motion and referred to her request as a
motion to set aside default judgment. However, as this Court had
not entered default judgment against Parmer at the time of this
filing, this Court construed Parmer’s motion as a motion to set
aside default.
2

ordered SAFE to file a more definite statement as to the time,
place, and contents of the false representations made by Brozik.
As to Brozik’s waiver argument and indispensable party argument,
this Court found that SAFE did not waive its right to assert the
claims in its amended complaint nor did SAFE fail to join an
indispensable

party.

SAFE

thereafter

filed

a

more

definite

statement in compliance with this Court’s order.
Brozik then filed a second motion to dismiss, and Secure US
filed

an

answer

and

a

counterclaim.

In

response

to

the

counterclaim, SAFE filed a motion to strike the counterclaim or in
the alternative to dismiss the counterclaim.

This Court granted

SAFE’s motion to strike, finding that SAFE did not change the
theory and scope of the case in regards to Secure US so as to allow
such amendment without leave of court and Secure US failed to seek
such leave to add its counterclaim.

As to Brozik’s second motion

to dismiss, this Court denied the motion, finding that SAFE
adequately pled its claim for fraud and again finding that SAFE did
not waive its right to assert any claims in its amended complaint.
After

Brozik

and

Secure

US

filed

motions

to

amend

the

scheduling order, which this Court granted, Brozik and SAFE filed
motions for summary judgment.

This Court denied both Brozik’s and

SAFE’s motions for summary judgment finding that genuine issues of
material fact precluded an entry of summary judgment for either
party.

3

After entry of this Court’s memorandum opinion and order
concerning Brozik’s and SAFE’s motions for summary judgment, SAFE
and Parmer filed a stipulation for entry of judgment. Brozik filed
objections to the stipulation but later withdrew the objections,
through a stipulation between SAFE, Parmer, and himself.

This

Court provided an opportunity for Secure US to object to the
stipulation if it felt it necessary but Secure US declined to file
any written objections.

The parties filed a third and final

stipulation, this stipulation being entitled “amended stipulation
for the withdrawal of objections and entry of judgment against
defendant Betty Parmer,” which was agreed to by all parties
appearing in this case.

It is upon this third stipulation that

this Court based its judgment order.
After SAFE and Parmer filed the first stipulation but before
the second and third stipulations were filed, SAFE also filed a
notice of voluntary dismissal pursuant to Rule 41(a)(2) of the
Federal Rules of Civil Procedure as to the remaining defendants,
Brozik and Secure US, and the remaining counts of the complaint.
This Court notes that Rule 41(a)(2) requires a plaintiff at this
stage to obtain a court order to voluntarily dismiss an action.
Accordingly,

this

Court

construes

SAFE’s

notice

of

voluntary

dismissal as a motion for voluntary dismissal. Further, this Court
notes that SAFE failed to include whether it desired such dismissal
to be with or without prejudice.

At a conference held on April 28,

4

2014, concerning this motion and other filings, SAFE indicated that
it wished such dismissal to be without prejudice and reconfirmed
this at the conference held on May 19, 2014.

Brozik and Secure US

made oral objections at the April 28, 2014 conference to the
dismissal being without prejudice and indicated that they believed
such dismissal should be with prejudice.

At the later conference,

on May 19, 2014, only Secure US objected to the dismissal being
without prejudice.
For the reasons stated below, this Court grants SAFE’s motion
for voluntary dismissal without prejudice.
II.

Discussion

As noted above, SAFE filed a notice of voluntary dismissal
pursuant to Rule 41(a)(2), which this Court construes as a motion
for voluntary dismissal due to Rule 41(a)(2)’s requirement that
SAFE obtain a court order prior to dismissal of this action.

Rule

41(a)(2) states in pertinent part that unless all parties stipulate
to the dismissal or an answer or motion for summary judgment has
not been filed “an action may be dismissed at the plaintiff’s
request only by court order, on terms the court considers proper.”
While the motion itself does not state that it seeks dismissal
without prejudice, SAFE confirmed at conferences held on April 28,
2014 and May 19, 2014, that it sought dismissal without prejudice.
Brozik initially objected to dismissal being without prejudice at
the April 28, 2014 conference but later withdrew this objection at

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the May 19, 2014 conference. Secure US has at all times maintained
its objection to the dismissal being entered without prejudice.
In

considering

a

motion

for

voluntary

dismissal

without

prejudice, “the district court must focus primarily on protecting
the interests of the defendant.”
1270, 1273 (4th Cir. 1987).

Davis v. USX Corp., 819 F.2d

Generally, however, “such a motion is

granted unless there is ‘substantial prejudice’ or ‘plain legal
prejudice’ to the defendant.”

Teck General Partnership v. Crown

Cent. Petroleum Corp., 28 F. Supp. 2d 989, 991 (E.D. Va. 1998).

A

non-exhaustive list of the factors to be considered concerning the
prejudice to the defendant are: “(1) the opposing party’s effort
and expense in preparing for trial; (2) excessive delay or lack of
diligence on the part of the movant; (3) insufficient explanation
of the need for a dismissal; and (4) the present stage of the
litigation,
pending.”

i.e.,

whether

a

motion

for

summary

judgment

is

Id. (quoting Gross v. Spies, Nos. 96-2146, 96-2203,

96-2150, 96-2149, 96-2147, 96-2204, 1998 WL 8006, *5 (4th Cir.
1998)(unpublished)).

The “prospect of a second lawsuit” or “the

possibility that the plaintiff will gain a tactical advantage over
the defendant in future litigation will not serve to bar a second
suit.”

Davis, 819 F.2d at 1274-75.

After an evaluation of these factors, this Court grants SAFE’s
motion for voluntary dismissal without prejudice.

Initially, this

Court notes that only one of the three defendants, which is Secure

6

US, objects to the dismissal being without prejudice and Secure US
did not provide any written objections concerning the matter, even
though it was provided with time to do so.

This Court recognizes

that the first and fourth factors seem to weigh in favor of denying
the motion for voluntary dismissal without prejudice due to the
current stage of litigation.

This Court, however, believes that

the remaining factors and the fact that the majority of the parties
agree to a dismissal without prejudice weighs in favor of granting
the motion to dismiss without prejudice.
As to the explanation for the need for dismissal, SAFE states
that it no longer wishes to pursue the remaining claims against
Parmer, Brozik and Secure US.

This is most likely due to a

stipulation for judgment entered by the parties, wherein SAFE and
all defendants request that this Court enter a judgment against
Parmer on Counts I and II.

This stipulation specifically requests

this Court to find that SAFE’s lien on Secure US’s property was not
extinguished by the secured party sale conducted on Parmer’s
behalf, that Parmer took Secure US’s assets subject to SAFE’s lien,
that Parmer is a successor in liability to Secure US, and that
Parmer is liable to SAFE for the amount of $1,132,028.42.
Further, this Court does not find that SAFE has acted with
excessive delay or lack of diligence, as it has no basis to make
such a finding.

SAFE’s reasoning for filing the motion for

voluntary dismissal is that in light of the stipulation with the

7

defendants, it no longer desires to assert causes of action against
Brozik or Secure US, or the civil conspiracy claim against Parmer.
SAFE filed the first stipulation it is referring to on the same
date as it filed its motion for voluntary dismissal.3

Accordingly,

SAFE does not seem to have delayed at all in filing its motion for
voluntary

dismissal

after

the

purpose

for

filing

the

motion

occurred.

Accordingly, due to SAFE’s explanation being adequate,

the lack of excessive delay or diligence, and the agreement between
the majority of parties involved, this Court finds that it is
proper

to

grant

SAFE’s

motion

for

voluntary

dismissal

with

prejudice.
III.
For

the

reasons

stated

Conclusion
above,

Security

Alarm

Financing

Enterprises, Inc.’s motion for voluntary dismissal (ECF No. 147) is
GRANTED WITHOUT PREJUDICE.
It is further ORDERED that this civil action be DISMISSED and
STRICKEN from the active docket of this Court.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.

3

This Court notes that the judgment order in this case,
however, is based on the parties’ third stipulation for entry of
judgment, which was signed by all parties, but such stipulation
requests judgment on the same counts as the initial stipulation.
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DATED:

May 22, 2014

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

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