Playing by the Rules for Dismissal
The Rules of Civil Procedure often have a few points where a case can end. They are there to make sure that all parties to the case are proceeding fairly, timely, and efficiently. Over time, these stopping points have begun to evolve as more and more litigants are utilizing them to “win” cases. One such rule is Rule 41(b). Rule 41 is about dismissal of actions. Part (a) is about voluntary dismissals by the plaintiff or by order of the judge. These voluntary dismissals are typically without prejudice, meaning that the plaintiff may file a lawsuit again, usually within a year. Part (b) is about involuntary dismissals. Typically, a defendant would file a motion to dismiss a case or claim based upon Rule 41(b). The grounds for dismissal under this Rule are failure of the plaintiff to prosecute or to comply with these rules or any order of court. Distinct case law has fleshed out the operation of the Rule, and what is required to be shown unto the court in order to have a Rule 41 motion to dismiss granted.
One such case that dealt with the issue follows:
K2 Asia Ventures v. Krispy Kreme Doughnut Corp.
Essentially, Plaintiff allegedly contracted with Krispy Kreme and another company in Asia to open Krispy Kreme franchises in Asia. The contract gave Plaintiff a certain percentage of revenue, and a percentage of equity in the Asia franchises. However, at the time of negotiations and drafting of some of the contractual provisions, Plaintiff’s company was not yet incorporated. Later, Plaintiff incorporated the company in the Cayman Islands under a slightly different name. Defendants Krispy Kreme filed for summary judgment because the company Plaintiff brought the lawsuit under did not match the company that negotiated the deal. Plaintiff submitted a brief responding to the motion for summary judgment and asked that the court either correct the name or allow Plaintiff to substitute parties. Three years since the filing of these briefs, no one had calendared the issue for hearing. Plaintiff also did not file a motion to amend the complaint, or a motion to substitute parties. Accordingly, the court converted the summary judgment motion to a Rule 41 and dismissed the case for a failure to prosecute (3-year delay) and because Plaintiff failed to comply with the Rule 17 of Rules of Civil Procedure. There was no an error on the part of the trial court because they did not abuse their discretion by declining to fix Plaintiff’s error. Nor did it err by declining to further preserve time for a substitution of parties after no motion was filed by Plaintiff pursuant to Rule 17.
Here we see two reasons for dismissal under Rule 41: 1) the unreasonable 3-year delay and 2) failing to file a motion to correct an error when drafting the complaint. Plaintiff essentially asked that the trial court fix their mistake, and the court was by no means required to do so. It may seem harsh, but Plaintiff is the one bringing the lawsuit and had avenues to correct their mistake, and Defendant was unfairly prejudiced by having the lawsuit looming over them for such a long time.