Armstrong v. Frostie Company, 71-1434.

• Decision Date: 30 December 1971
• Docket Number: No. 71-1434.,71-1434.
• Citation: 453 F.2d 914
• Parties: Joseph R. ARMSTRONG, Sr., Appellant, v. The FROSTIE COMPANY, a New Jersey Corporation, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

453 F.2d 914 (1971)

Joseph R. ARMSTRONG, Sr., Appellant, v. The FROSTIE COMPANY, a New Jersey Corporation, Appellee.

No. 71-1434.

United States Court of Appeals, Fourth Circuit.

Argued November 4, 1971.

Decided December 30, 1971.

Peter Parker, Baltimore, Md. (White, Page & Lentz, Baltimore, Md., on brief) for appellant.

James P. Garland, Baltimore, Md. (Cleaveland D. Miller and Semmes, Bowen & Semmes, Baltimore, Md., on brief), for appellee.

Before CRAVEN, BUTZNER and FIELD, Circuit Judges.

BUTZNER, Circuit Judge:

Joseph Armstrong appeals from an order of the district court that (1) vacated his notice of dismissal without prejudice of an action he had filed against The Frostie Company, and (2) granted summary judgment for Frostie. We affirm.

In response to Armstrong's original complaint, Frostie filed an answer and a motion for summary judgment. At a hearing on the motion for summary judgment, the district court denied the motion, but entertained a motion to dismiss the complaint for failure to state a claim upon which relief could be granted. It then dismissed the complaint, giving Armstrong leave to amend within 15 days. Armstrong filed an amended complaint, alleging essentially the same cause of action, and Frostie filed another motion to dismiss. Armstrong responded with an affidavit setting forth facts in opposition. After oral argument on Frostie's motion, the court continued the proceedings to allow Armstrong to file additional memoranda in support of his position. Instead, Armstrong filed a notice of voluntary dismissal without prejudice, which Frostie immediately moved to vacate. The court vacated Armstrong's voluntary dismissal, treated Frostie's motion to dismiss, on which it had previously heard argument, as a motion for summary judgment, and entered judgment for Frostie.

I

Rule 41(a) (1) (i) of the Federal Rules of Civil Procedure permits voluntary dismissal of an action without prejudice "at any time before service by the adverse party of an answer or of a motion for summary judgment. . . ." Armstrong contends that no answer or motion for summary judgment had been served by Frostie to the amended complaint. Although these pleadings had been filed in response to the original complaint, he insists that the amended complaint superseded the original and produced an entirely new action. Since the initial complaint had been dismissed, he says that "it and any pleadings to it are a nullity."

Armstrong misconceives the purpose and policy behind Rule 41(a) (1) (i) permitting unilateral dismissal by the plaintiff without prejudice. The rule is designed to permit a disengagement of the parties at the behest of the plaintiff only in the early stages of a suit, before the defendant has expended time and effort in the preparation of his case. See Harvey Aluminum, Inc. v. American Cyanamid Co., 203 F.2d 105, 107 (2d Cir.), cert. denied, 345 U.S. 964, 73 S.Ct. 949, 97 L.Ed. 1383 (1953); cf. Butler v. Denton, 150 F.2d 687, 689 (10th Cir. 1945). Once the defendant has filed an answer or a motion for summary judgment, which normally is marked by extensive preparation, granting dismissal without prejudice becomes discretionary with the court. Fed.R. Civ.P. 41(a) (2); see 2B W. Barron & A. Holtzoff, Federal Practice and Procedure § 912 (C. Wright, ed. 1961).

Frostie satisfied both the letter and the spirit of the rule by filing an answer and a motion for summary judgment to Armstrong's original complaint. Dismissal of this complaint, followed by an amended complaint, increased rather than nullified Frostie's burden. The district court, therefore, properly vacated Armstrong's dismissal of the action without prejudice.

On appeal, Armstrong argues that the district court erred in not treating his notice to dismiss as a motion to dismiss without prejudice under Rule 41(a) (2) so that he could file his suit in a state court against Frostie and other defendants. We find no merit in this contention, for he did not seek this relief in the district court. Even if he had, denial of his motion would not have been an abuse of discretion in view of the advanced stage of the proceedings. Cf. Rollison v. Washington National Insurance Co., 176 F.2d 364, 367 (4th Cir. 1949).

II

In his amended complaint Armstrong alleged that he had been a substantial stockholder in Beverage Capital Corp., which was engaged in bottling and distributing soft drinks in Maryland; that approximately 40 per cent of its product was sold as Frostie Root Beer under a franchise granted by The Frostie Co., but that Frostie wrongfully cancelled the franchise. He also alleged that Beverage sued Frostie because of the cancellation of the franchise, but that before trial he was forced to sell his stock to avert financial disaster. He charged that the purchaser of the stock, fraudulently conspiring with Frostie and others, caused Beverage to settle the suit on terms advantageous to Frostie. He sought damages resulting from the sale of his stock, the loss of five years' salary he would have been paid as an officer of Beverage, the loss of profits to Beverage, and the loss of his reputation in the soft drink...