You have a case set for trial in a state trial court. You are tenth on the trial calendar, but the nine cases in front of you have crumbled and settled over the weekend. Plus, your most important witness is gone from your state based on your guess that the case wouldn’t be reached for trial. You’ve been hobbled by an Order granting a Motion in Limine excluding some of your evidence from trial. Even worse, the statute of limitations ran on your claims while your case was pending. And you really aren’t ready (or don’t want) to try this case anyway.
Wouldn’t it be nice to wipe the slate clean and get a fresh start? Well, you can do that in North Carolina, but probably in no other court. If you are admitted to practice law in North Carolina, you know that in NC state court a plaintiff can dismiss his case "by filing a notice of dismissal [per Rule 41 of the NC Rules of Civil Procedure] at any time before the plaintiff rests his case."
That is a much more generous allowance of the voluntary dismissal right than anywhere else. In federal court (and under the Rules in many other states), by contrast, a voluntary dismissal must be filed much sooner: "before the opposing party serves either an answer or a motion for summary judgment."
The "Safety Net" Of Rule 41
The North Carolina Supreme Court (relying on North Carolina’s civil procedure expert, Gray Wilson) has said that:
The Rule 41(a) voluntary dismissal “has salvaged more lawsuits than any other procedural device, giving the plaintiff a second chance to present a viable case at trial.” 2 G. Gray Wilson, North Carolina Civil Procedure § 41-1, at 32 (2d ed. 1995). Many plaintiffs have used “this rule to cure an unforeseen defect in a claim that did not become apparent until trial . . . . The rule also offers a safety net to plaintiff or his counsel who are either unprepared or unwilling to proceed with trial the first time the case is called.” 2 G. Gray Wilson, North Carolina Civil Procedure § 41-1, at 33.
Brisson v. Santoriello, 351 N.C. 589, 597, 528 S.E.2d 569, 572-573 (2000).
The longer period of time in which a plaintiff can take a voluntary dismissal (without the permission of the opposing party) is not the "distinct" feature of the North Carolina Rule which Judge Bledsoe referenced last week in BBB&T BOLI Plan Trust v. Massachusetts Mutual Life Ins. Co., 2016 NCBC 34 at ¶17 . That feature is the extension of the statute of limitations governing your claims. The Rule says that so long as your dismissed lawsuit was timely filed, "a new action based on the same claim may be commenced within one year after such dismissal." That’s true even if the statute of limitations has expired at the time of the voluntary dismissal.
When Has A Plaintiff "Rested His Case"?
The words "rests his case" has a trial connotation to me. When the Plaintiff has presented all of his documents and witnesses and turns the presentation of evidence over to the Defendant, he has rested his case.
But you can actually "rest your case" much sooner than that, at least for Rule 41 purposes. Defending your position in a summary judgment hearing means that you have rested your case within the meaning of Rule 41(a)(1)(i). Op. ¶27 (citing Maurice v. Hatterasman Motel Corp., 38 N.C. App. 588, 591-92, 248 S.E.2d 430, 432-33 (1978)). In fact, anytime that a plaintiff is facing a dispositive motion, he rests his case by "advanc[ing] its arguments about the merits of [his] case. . . ." Op. ¶28.
In the case before the Business Court last week, Plaintiff BB&T Trust filed its voluntary dismissal about three weeks before its trial was set to begin During the course of the case (three years ago), Judge Murphy had denied a Motion to Amend in which the Trust tried to add additional theories of liability. Shortly before trial, Judge Gale granted a Motion in Limine prohibiting the Trust from presenting evidence relating to those theories of liability that were the subject of its unsuccessful Motion to Amend.
So, can a voluntary dismissal be filed by a Plaintiff to avoid a Court’s adverse ruling, or has he "rested his case" by contesting the ruling?
Bad Faith Dismissals Are Not Allowed
The NC Supreme Court said in the Brisson decision that a voluntary dismissal must "not be done in bad faith." 351 N.C. 597, 528 S.E.2d 569, 573.
Judge Bledsoe rejected the argument that the BB&T Trust’s dismissal was taken in "bad faith." He said that:
allowing Brisson’s bad faith exception to subject all voluntary dismissals to judicial scrutiny would undermine the intent of Rule 41(a) by creating unnecessary barriers for plaintiffs who wish to abandon their claims.
So what makes out a "bad faith" dismissal? It’s a pretty narrow circumstance, and is limited to the situation where "the initial complaint fails to conform with the rules of pleading and merely seeks to take advantage of the savings provision" Op. ¶2. The rationale for that limitation " is that where an initial complaint does not conform with the rules of pleading, a plaintiff should not be entitled to the “safety net” of Rule 41(a)’s [statute of limitations] savings provision after dismissal." Op. ¶26.
Defendant MassMutual took a run at arguing that "bad faith" had to be determined on a case by case basis, and that the Plaintiff had acted in bad faith by waiting three years after the rejection of its Motion to Amend to take its voluntary dismissal. Judge Bledsoe said that he would not extend the bad faith exception "so far beyond precedent," and that finding Plaintiff”s dismissal to be in bad faith "would defeat Rule 41(a)’s broad function as a ‘safety net.’" Op. ¶26.
The Opinion makes it clear that an unfavorable ruling on a "non-dispositive motion" (like the ruling on the Defendant”s Motion in Limine) does not mean that a Plaintiff unsuccessfully contesting such a Motion has "rested his case." Op. ¶29.
My "Unsecured Leave"
I’m going to be out of the country for the next couple of weeks. For the first time, I’m not carrying a laptop with me, so don’t look for anything from my blog until near the end of the month.