Tuesday, August 07, 2007, 9:03 PM

COA: Taking Voluntary Dismissal Doesn't Immunize Plaintiff From Rule 11 Sanctions Once Case Is Refiled

Today the Court of Appeals (COA) affirmed Rule 11 sanctions. The case is Stocum v. Oakley.

Plaintiffs filed a complaint but their counsel failed to serve the summons and four alias and pluries summonses on any Defendant. A year later they filed an amended complaint and again counsel failed to serve a summons on Defendants, despite additional more alias and pluries summonses. By this point more than a year and a half had passed. Nine alias and pluries summonses had issued.

The first time any Defendant learned a lawsuit had been filed was when one of them received an order for a mediated settlement conference directly from the superior court.

Then, although no discovery had occurred, Plaintiffs' counsel signed a letter to the trial court coordinator asking for the case to be removed from the calendar because, counsel stated, "[w]e are still in the discovery stages of this case." Three days later Plaintiffs' counsel sent a similar letter to the trial court coordinator asking for additional time to complete discovery before mediation and trial, and stating that the "[p]arties are still involved in discovery."

After Defendants received notice of the suit, they filed a motion to dismiss. Citing Rules 41, they argued that involuntary dismissal was warranted based on Plaintiffs' failure to prosecute the action. And, citing Rule 11, they contended that Plaintiffs' counsel misrepresented in her letters to the trial court coordinator that discovery was still ongoing when in fact there had been no discovery. They sought the sanction of involuntary dismissal.

Four days before the motion hearing, Plaintiffs took a voluntary dismissal, so the hearing never occurred.

But 363 days later, Plaintiffs refiled the action. Defendants then renewed their motion under Rule 11 and 41 based on Plaintiffs' conduct in the earlier proceeding, i.e., before the voluntary dismissal. The trial court granted the motion. The sanction: dismissal of the refiled action with prejudice.

On appeal, Plaintiffs argued that their voluntary dismissal should've terminated the original proceeding as if it hadn't been filed, thus erasing any misconduct in that proceeding and wiping the slate clean. The COA disagreed: A voluntary dismissal doesn't deprive a trial court from imposing sanctions for pre-voluntary-dismissal misconduct.

The COA also indicated that prejudice isn't required for Rule 11 sanctions and held that estoppel is not a defense to a Rule 11 motion.


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