781 F.

2d 855
4 Fed.R.Serv.3d 1116

Reta L. McCANTS, As Administratrix of the Estate of Johnny

L. McCants, deceased, Plaintiff-Appellee,
v.
FORD MOTOR COMPANY, INC., Defendant-Appellant.
No. 85-7098.

United States Court of Appeals,

Eleventh Circuit.
Feb. 3, 1986.

Bradley, Arant, Rose & White, Jere F. White, Jr. and M. Christian King,
Birmingham, Ala., for defendant-appellant.
Leon Garmon, Gadsden, Ala., for plaintiff-appellee.
Appeal from the United States District Court for the Northern District of
Alabama.
Before HILL and CLARK, Circuit Judges, and MOYE* , Chief District
Judge.
HILL, Circuit Judge:

This case is before the court on defendant-appellant Ford Motor Company's

appeal from an order of the district court dismissing plaintiff-appellee Reta
McCants' suit without prejudice pursuant to Rule 41(a)(2) of the Federal Rules
of Civil Procedure.

FACTS
2

Appellee Reta McCants, administratrix of the estate of Johnny McCants,

deceased, commenced this suit against appellant Ford Motor Company in
federal district court in Alabama. The action arose out of an accident in which
appellee's decedent, a member of the United States Army Reserve, was killed

while riding in a military jeep on a two week active duty training mission. The
accident occurred in Mississippi, and the complaint sought damages under
Mississippi products liability law.
3

The decedent was killed on July 24, 1982. Appellee filed suit against A.M.
General, the company she believed had manufactured the military jeep in
question, on July 20, 1983. Appellee maintains that she subsequently learned
through discovery that appellant rather than A.M. General manufactured the
jeep, and she sought leave to amend her action to substitute appellant as party
defendant. Instead of allowing the amendment, the district court denied her
motion to amend and dismissed the suit without prejudice. Appellee then filed
this action, naming appellant as defendant, on November 14, 1983.

Discovery began in December of 1983 and continued through most of the

following year. In January of 1985 the district court issued an order granting
plaintiff-appellee's motion that the case be dismissed without prejudice.
Although the action had been pending for more than a year, during which time
considerable activity had taken place, the district court declined to attach any
conditions to its order of dismissal.

Appellant argues on this appeal that the dismissal without prejudice and the
failure to attach conditions were an abuse of the district court's discretion.

DISCUSSION
I. The Dismissal Without Prejudice
6

Rule 41(a)(2) allows a plaintiff, with the approval of the court, to dismiss an
action voluntarily and without prejudice to future litigation at any time. The
rule provides in relevant part as follows:

7
Except
as provided in paragraph (1) of this subdivision of this rule [concerning
dismissal by stipulation or by plaintiff prior to answer or motion for summary
judgment], an action shall not be dismissed at the plaintiff's instance save upon order
of the court and upon such terms and conditions as the court deems proper ... Unless
otherwise specified in the order, a dismissal under this paragraph is without
prejudice.
8

The purpose of the rule "is primarily to prevent voluntary dismissals which
unfairly affect the other side, and to permit the imposition of curative
conditions." Alamance Industries, Inc. v. Filene's, 291 F.2d 142, 146 (1st Cir.),
cert. denied, 368 U.S. 831, 82 S.Ct. 53, 7 L.Ed.2d 33 (1961). Thus a district

court considering a motion for dismissal without prejudice should bear in mind
principally the interests of the defendant, for it is the defendant's position that
the court should protect. LeCompte v. Mr. Chip, Inc., 528 F.2d 601, 604 (5th
Cir.1976).
9

As we have noted previously, however, in most cases a dismissal should be

granted unless the defendant will suffer clear legal prejudice, other than the
mere prospect of a subsequent lawsuit, as a result. Id. See also Holiday Queen
Land Corp. v. Baker, 489 F.2d 1031, 1032 (5th Cir.1974); Durham v. Florida
East Coast Railway Co., 385 F.2d 366, 368 (5th Cir.1967). Thus it is no bar to a
voluntary dismissal that the plaintiff may obtain some tactical advantage over
the defendant in future litigation. Durham, 385 F.2d at 368. See also Holiday
Queen Land Corp., 489 F.2d at 1032; Standard National Insurance Co. v.
Bayless, 272 F.2d 185 (5th Cir.1959). Rather, the district court must exercise
its broad equitable discretion under Rule 41(a)(2) to weigh the relevant equities
and do justice between the parties in each case, imposing such costs and
attaching such conditions to the dismissal as are deemed appropriate. American
Cyanamid Company v. McGhee, 317 F.2d 295, 298 (5th Cir.1963); Diamond v.
United States, 267 F.2d 23, 25 (5th Cir.), cert. denied, 361 U.S. 834, 80 S.Ct.
85, 4 L.Ed.2d 75 (1959). See generally 5 J. Moore, J. Lucas, & J. Wicker,
Moore's Federal Practice Secs. 41.05, 41.06 (2d ed. 1985); 9 C. Wright & A.
Miller, Federal Practice and Procedure Sec. 2364 (1971). Dismissal on motion
of the plaintiff pursuant to Rule 41(a)(2) is within the sound discretion of the
district court, and its order may be reviewed only for an abuse of discretion. LaTex Supply Co. v. Fruehauf Trailer Div., Fruehauf Corp., 444 F.2d 1366, 1368
(5th Cir.), cert. denied, 404 U.S. 942, 92 S.Ct. 287, 30 L.Ed.2d 256 (1971);
American Cyanamid, 317 F.2d at 298.

10

In this case, appellant argues it will suffer plain legal prejudice as a result of the
district court's dismissal without prejudice, as it will lose the complete defense
it claims it is afforded by the applicable statute of limitations in Alabama.
Appellee, as well as the district court in which she originally filed, apparently
assumed that either the six year statute of limitations applicable to wrongful
death actions under Mississippi law or the two year statute applicable to
wrongful death actions in Alabama would be used to determine the timeliness
of her suit. As the case developed, however, and the parties dedicated further
research to the legal issues involved, it became clear that a very strong
argument could be made for the application of the general one year statute of
limitations applicable to actions not otherwise specifically provided for in other
sections of the Alabama code. See Ala.Code Sec. 6-2-39 (1977).

11

Appellant did not plead the one year statute of limitations in its original answer

to the complaint. The issue first appears in the record in an amended answer
filed July 18, 1984, in which it was simply stated that appellee's claims were
barred by the applicable statute of limitations. Appellant then filed a motion for
summary judgment on the basis of the one year statute on August 24, 1984; the
district court denied that motion the day before it granted appellee's motion for
dismissal without prejudice. Although no opinion accompanied the district
court's denial of the motion for summary judgment, appellant argues that the
district court, in its denial of the summary judgment motion, must have
erroneously determined the one year statute of limitations to be inapplicable.
Appellant thus argues not only that it suffered legal prejudice in that it lost the
statute of limitations defense when the case was dismissed without prejudice,
but that the district court abused its discretion when it failed even to
acknowledge that important fact in its balancing of the equities.
12

Considering appellant's latter claim first, we are not convinced that the district
court judge misunderstood the law applicable to the cause of action in this case,
even if appellant correctly maintains that the one year Alabama statute should
apply. Under the circumstances of this case, the district court's denial of the
pending motion for summary judgment without opinion simply cannot be taken
to imply that the district judge did not believe a serious statute of limitations
problem to exist in this case. Rather, the more plausible interpretation of the
district court's order, considered in context, is precisely to the contrary. It is
clear from the face of the Rule 41(a)(2) motion to dismiss that the motion was
filed because of the same statute of limitations problem that prompted the
motion for summary judgment. The motions were argued together before the
district court, and the court ruled on them almost simultaneously. If the district
court had not considered a serious statute of limitations problem to exist, the
dismissal without prejudice would have been unnecessary. Thus we decline to
assume, on the basis of the district court's disposition of the motion for
summary judgment, that the court erroneously failed to recognize the strength
of appellant's statute of limitations defense. The district court may instead have
determined that it should rule on the motion for summary judgment before
dismissing the action without prejudice, and thus may have ruled as it did
simply to clear the way for the subsequent order of dismissal. Under the
circumstances of this case, we cannot consider the district court's denial of
appellant's motion for summary judgment to reflect the court's view of the
applicable statute of limitations in Alabama as clearly as appellant suggests that
it does, and that ruling can be of no consequence to our determination of
whether the court abused its discretion when it granted the dismissal without
prejudice.

13

The parties have not yet agreed on the statute of limitations applicable to this

suit, as brought in Alabama, although appellant argues persuasively that

Alabama's one year statute would apply. Appellee essentially argues her case
on this appeal on the basis of the assumption that Alabama's one year statute
bars the suit as brought in Alabama, and that a similar suit would not be timebarred in Mississippi, where appellee now intends to sue. We, too, will assume
without deciding that the one year Alabama statute bars this suit as filed, but
that it could be refiled in Mississippi under the statute of limitations applicable
there. We thus must determine whether it constitutes an abuse of discretion for
a district court to dismiss without prejudice an action that is time-barred as
brought, where the purpose or effect of such dismissal is to allow the plaintiff
to refile the action in a place or manner in which it is not similarly barred.
14

Only a few reported cases are on point. In Love v. Silas Mason, 66 F.Supp. 753
(W.D.La.1946), the court refused to grant a motion to dismiss without prejudice
where the plaintiff would then have been able to refile in another jurisdiction
with a longer statute of limitations. The court was of the view that the plaintiff
should not be given an opportunity to avoid the prescribed legal effect of his
delay. Id. at 754. In Klar v. Firestone Tire & Rubber Co., 14 F.R.D. 176
(S.D.N.Y.1953), the court allowed the plaintiff to dismiss his action without
prejudice in New York, where his suit was barred by the statute of limitations,
so he could refile in Ohio, where the suit was not similarly barred. The court
reasoned that no intentional abuse was evident in the case and that the plaintiff
should not be forced to suffer for counsel's obviously inadvertent error. In
Germain v. Semco Service Machinery Co., 79 F.R.D. 85 (E.D.N.Y.1978), the
court also allowed the plaintiff to dismiss his time-barred action without
prejudice, although it appeared as if the plaintiff would then be able to refile
the action in another jurisdiction with a longer statute of limitations. The court
expressed the view that the statute of limitations should not weigh heavily in its
decision under Rule 41(a)(2), because the defendant acquired no vested right as
a result of plaintiff counsel's error in suing in New York. Thus, what little
authority that exists on this particular question suggests that the likelihood that
a dismissal without prejudice will deny the defendant a statute of limitations
defense does not constitute plain legal prejudice and hence should not alone
preclude such a dismissal.

15

We find further support for this view in a binding decision of the former Fifth
Circuit Court of Appeals. In Durham v. Florida East Coast Railway Co., 385
F.2d 366 (5th Cir.1967), the plaintiff appealed from a judgment dismissing his
complaint with prejudice. The plaintiff filed suit on December 2, 1965 under
the Federal Employers' Liability Act (FELA), alleging that his employer, the
defendant railroad, negligently failed to provide a safe place to work. The
railroad denied that it had been negligent and pled contributory negligence as

an affirmative defense. In May of the following year the case was set down for
trial in October. The court conducted a pretrial conference on September 20,
1966. When the case was called for trial three weeks later the plaintiff, alleging
newly discovered evidence, orally moved the court for leave to amend his
complaint to include a claim under the Federal Safety Appliance Act. Under
that Act, a plaintiff could recover without regard to his contributory negligence.
Apparently finding the motion to amend untimely, since the purportedly new
evidence had in fact been furnished by the plaintiff himself, the district court
denied leave to amend; that ruling was not contested on appeal. The plaintiff
then moved for a voluntary dismissal without prejudice, to which the defendant
objected. The court denied the plaintiff's motion and directed him to proceed
with his case. Plaintiff's counsel then announced that he could not proceed with
the case, and the court dismissed the action with prejudice.
16

Noting that "[t]he record does not disclose any prejudice to the defendant, had a
voluntary dismissal been granted, other than the annoyance of a second
litigation upon the same subject matter," the court of appeals reversed the
decision of the district court and remanded the case with instructions that it be
reinstated. Durham, 385 F.2d at 369. "On proper motion," the court further
stated, "the complaint may be dismissed without prejudice upon such terms and
conditions as the court deems proper." Id. In that case, as in this one, the
plaintiff's untimeliness yielded the defendant a potentially great legal
advantage, had the case proceeded to final judgment, that the defendant
presumably would not have enjoyed in a subsequent lawsuit on the same facts.
In reaching its decision, the Fifth Circuit in Durham obviously considered it
important that there was no evidence in the record of bad faith on the part of
plaintiff's counsel in failing to move to amend the complaint and assert the new
claim in a timely manner. Here, too, we find no evidence in the record to
suggest that appellee or her counsel acted in bad faith in filing this action in
Alabama or in filing it more than one year after the accident occurred. Under
the circumstances, we cannot find appellant to have suffered any plain legal
prejudice other than the prospect of a second lawsuit on the same set of facts.
The district court thus did not abuse its discretion in granting the dismissal
without prejudice in this case.

17

Appellant argues vigorously that, under the circumstances of this case, a

dismissal without prejudice was an abuse of discretion even if the defendant's
loss of its statute of limitations defense alone constitutes no clear legal bar to
the dismissal. According to the defendant, the great costs it has incurred in
defending this suit so far, in combination with the loss of the defense, together
require us to find an abuse of discretion in the district court's decision to grant a
dismissal without prejudice.

18

We reject this argument. We have already held the loss of a valid statute of
limitations defense not to constitute a bar to a dismissal without prejudice.
Appellant has cited no "practical prejudice" it has suffered so far that could not
be alleviated by the imposition of costs or other conditions upon the dismissal
without prejudice. Thus we cannot find the district court's dismissal without
prejudice, when considered apart from the question of whether costs or other
conditions should have been imposed, to have been an abuse of the district
court's broad equitable discretion.

II. The Refusal to Attach Conditions

19

Appellant argues that if the district court did not abuse its discretion in
dismissing the action without prejudice, it should have at least imposed certain
costs and attached certain conditions to the dismissal. Appellant claims the
district court should have conditioned the dismissal on the payment by appellee
of full compensation for the considerable time and effort it claims it wasted in
defending this action. Further, appellant argues that the district court should
have imposed non-monetary conditions that would have the effect of insuring
that appellant retains the benefits it claims it is due under the terms of a
discovery order with which appellee apparently failed to comply. According to
appellant, under the clear terms of an order of the district court in this litigation,
appellee would not have been able to call any expert witnesses at trial if this
case had not been dismissed, because she failed to furnish to appellant certain
information the court ordered her to furnish concerning the expert witnesses she
intended to call at trial. According to appellant, it should be permitted to retain
the benefits of the sanction thereby imposed in any subsequent litigation.

20

A plaintiff ordinarily will not be permitted to dismiss an action without

prejudice under Rule 41(a)(2) after the defendant has been put to considerable
expense in preparing for trial, except on condition that the plaintiff reimburse
the defendant for at least a portion of his expenses of litigation. See LeCompte,
528 F.2d at 603; 5 J. Moore, J. Lucas & J. Wicker, Moore's Federal Practice
Sec. 41.06 (2d ed. 1985); 9 C. Wright & A. Miller, Federal Practice and
Procedure Sec. 2366 (1971). Costs may include all litigation-related expenses
incurred by the defendant, including reasonable attorneys' fees. See American
Cyanamid, 317 F.2d at 298; Bishop v. West American Insurance Co., 95 F.R.D.
494, 495 (N.D.Ga.1982). Where a subsequent similar suit between the parties is
contemplated, expenses awarded might be limited to those incurred in
discovering information and researching and pressing legal arguments that will
not be useful in the later suit. See Germain, 79 F.R.D. at 87. We have also
noted previously that a dismissal without prejudice pursuant to Rule 41(a)(2)
may be conditioned upon the satisfaction of other non-monetary conditions

designed to alleviate the prejudice the defendant might otherwise suffer. See
LeCompte, 528 F.2d at 603 (citing cases).
21

Appellant assures us, and appellee does not dispute, that appellant opposed the
motion for dismissal without prejudice filed by appellee on January 15, three
days before appellant's motion for summary judgment was set to be heard, and
that appellant asked that any dismissal of the action without prejudice include
the imposition of specified conditions designed to alleviate the prejudice
appellant would otherwise suffer. Appellant's memorandum in opposition to
appellee's motion to dismiss, apparently prepared virtually overnight so it would
be before the court when it heard argument on both motions on January 18,
does not appear in the record on appeal. Only a motion filed by appellant in
September of 1984, in opposition to an earlier motion for dismissal without
prejudice that was subsequently withdrawn, provides any insight into the
factors appellant might have urged the district court to consider in response to
the rather sudden motion filed by appellee four months later. Further, the
district court did not explicitly rule on appellant's request, instead simply
denying it by implication by failing to impose or discuss any conditions when
the dismissal without prejudice was ordered.

22

As a result, the record now before this court is insufficient to allow us to

evaluate the district court's exercise of its discretion in rejecting appellant's
request for the attachment of conditions to its order dismissing the case. It is
clear that discovery had proceeded and that interrogatories had been served,
objected to, and answered to some extent. Depositions had been taken.
Appellant had obviously incurred considerable litigation expense. Just how
much of the work done by appellant in this case was wasted and how much will
be useful in further litigation in Mississippi is not clear. While appellee does not
concede that her suit in Alabama is barred by the statute of limitations, it is
apparent that appellant's position on the statute of limitations motivated the
motion for dismissal without prejudice. As the record makes clear, however,
the parties were aware of the statute of limitations problem long before appellee
filed the motion to dismiss that was granted by the district court. The district
court judge is in a far better position than we are to weigh and advise us
concerning the equities, whether currently in the record or not, that militate for
and against the imposition of the various conditions appellant claims are due.
We simply cannot properly evaluate the district court's exercise of its discretion
in this regard without the benefit of some record of the factors it took into
consideration in reaching its decision. We thus remand the case, with
instructions as indicated below, for further proceedings in the district court. See
LeCompte, 528 F.2d at 605 (remanding case for reconsideration of dismissal
without prejudice pursuant to Rule 41(a)(2) because "there is nothing in the

order or in the record from which we can ascertain whether the court properly
exercised its discretion in imposing conditions on the dismissal").
CONCLUSION
23

For the reasons set forth above, we VACATE the district court's order
dismissing this case without prejudice and REMAND the case to the district
court for further proceedings not inconsistent with this opinion. On remand, the
district court is instructed to rule on appellant's request that conditions be
attached to any dismissal of this case without prejudice, and to state the findings
and conclusions that lead the court to arrive at the decision it reaches in that
regard. The district court may hold further hearings to aid it in determining the
conditions that may be appropriate if it so desires. The court need not do so,
however, if it finds the current record sufficient to allow it to prepare the order
it deems appropriate. During the remand, we will retain jurisdiction over this
appeal. We are mindful of the heavy workload under which the district court is
now operating. If the district court's calendar will permit it, however, we ask
that the order contemplated by this remand be forwarded within 45 days.

Honorable Charles A. Moye, Jr., Chief U.S. District Judge for the Northern
District of Georgia, sitting by designation