Kern v. TXO Production Corp.
| Decision Date | 17 July 1984 |
| Docket Number | No. 83-2505,83-2505 |
| Citation | 738 F.2d 968 |
| Parties | Frances KERN, Appellee, v. TXO PRODUCTION CORPORATION, Appellant. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Rex M. Terry, Hardin, Jesson & Dawson, Fort Smith, Ark., for appellant TXO Production Corp.
P.K. Holmes, III, Warner & Smith, Fort Smith, Ark., for appellee Frances Kern.
Before McMILLIAN, Circuit Judge, HENLEY, Senior Circuit Judge, and ARNOLD, Circuit Judge.
TXO Production Corporation appeals from the District Court's order dismissing without prejudice Frances Kern's action against it. TXO claims that the dismissal, which came after the trial had begun, should have been with prejudice, or, in the alternative, should at least have been conditioned on the payment by plaintiff of its costs and lawyers' fees. We cannot agree that it was an abuse of discretion to dismiss the complaint without prejudice, but we do hold that conditions should have been attached to protect TXO. We therefore affirm in part, reverse in part, and remand with instructions.
The plaintiff owns the surface of five acres of land in Logan County, Arkansas. TXO holds an oil-and-gas lease granted by the owner of the mineral interest. Plaintiff brought this action for damages, claiming that a gas well drilled on her property by TXO had reduced the value of her surface ownership more than reasonably necessary in the exercise of a mineral lessee's rights. Suit was filed in the Circuit Court of Logan County, Arkansas, Northern District, for $15,000.00 in damages, later increased by amendment to $25,000.00. TXO removed the case to the District Court on the basis of diversity of citizenship.
After some discovery had taken place, the District Court set the case for trial. Plaintiff then moved to dismiss her complaint without prejudice under Fed.R.Civ.P. 41(a)(2). The District Court informed counsel by letter that it would grant the motion, but "only upon the express condition that, if the case is refiled in any court, the defendant will be awarded all costs of this action, including all attorney's fees incurred in preparing this case for trial." Designated Record (D.R.) 19. Plaintiff, evidently believing this condition too burdensome, withdrew her motion to dismiss, and the case went to trial before a jury about two weeks later.
After plaintiff had presented four out of the five witnesses she intended to call, the court and counsel conferred out of the presence of the jury. The intended testimony of the fifth witness, a real-estate expert, was fully discussed. The court informally indicated the view that plaintiff would be unable to make out a submissible fact question for the jury: "at the close of your [the plaintiff's] case, the court will more than likely direct a verdict in favor of the defendant." Tr. 137. After a 15-minute recess to allow plaintiff's lawyer to consult with his client, the plaintiff renewed her motion for dismissal without prejudice. This time the motion was granted, and no conditions as to costs and expenses were imposed. The court said (Tr. 143):
The court sees Ms. Kern, sees TXO. Under the circumstances, I think that if I'm going to err, I want to err in favor of giving Ms. Kern another chance because TXO will survive. I'm just certain of that.
TXO objected to this action, and it now appeals.
Under Fed.R.Civ.P. 41(a)(1) a plaintiff may voluntarily dismiss her complaint, without prejudice to the filing of a new action based on the same claim, as a matter of right, provided only that the dismissal must occur before the defendant has either answered or moved for summary judgment. Otherwise,
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.
Motions to dismiss without prejudice are addressed to the sound discretion of the district courts. But "the discretion vested in the court is a judicial and not an arbitrary one ...." International Shoe Co. v. Cool, 154 F.2d 778, 780 (8th Cir.) cert. denied, 329 U.S. 726, 67 S.Ct. 76, 91 L.Ed. 678 (1946). That is, when we say that a decision is discretionary, or that a district court has discretion to grant or deny a motion, we do not mean that the district court may do whatever pleases it. The phrase means instead that the court has a range of choice, and that its decision will not be disturbed as long as it stays within that range and is not influenced by any mistake of law. An abuse of discretion, on the other hand, can occur in three principal ways: when a relevant factor that should have been given significant weight is not considered; when an irrelevant or improper factor is considered and given significant weight; and when all proper factors, and no improper ones, are considered, but the court, in weighing those factors, commits a clear error of judgment. And in every case we as an appellate court must be mindful that the district courts are closer to the facts and the parties, and that not everything that is important about a lawsuit comes through on the printed page.
At common law, dismissals without prejudice were, in general, freely allowed at any time before the case was ready for decision. That is still the rule in the Arkansas state courts. Ark.R.Civ.P. 41. But in the federal courts, after answer, such dismissals should be granted only "if no other party will be prejudiced." 9 Wright & Miller, Federal Practice & Procedure--Civil Sec. 2362 (1971). By "prejudice" in this context is meant something other than the necessity that defendant might face of defending another action. That kind of disadvantage can be taken care of by a condition that plaintiff pay to defendant its costs and expenses incurred in the first action. One sort of prejudice that cannot be cured by the attachment of conditions is the loss by defendant of success in the first case. If defendant has already won its case, reimbursement of fees and expenses cannot make it whole from the injury of being sued again, perhaps this time to lose.
A series of cases in this Court has applied this principle. The most recent example is Williams v. Ford Motor Credit Co., 627 F.2d 158 (8th Cir.1980). The jury verdict had gone for plaintiff. Defendant moved for judgment notwithstanding the verdict. Plaintiff opposed the motion, but asked the court, if it decided the verdict could not stand, to grant her a voluntary nonsuit, so that she could sue again in a state court. The motion for nonsuit was granted. We reversed. "Under the circumstances we feel the court abused its discretion in granting the motion to dismiss without prejudice at such a late time in the proceedings." Id. at 160. We noted, among other things, that the dismissal might prejudice the defendant with respect to a third-party claim it had asserted in the first action. 1
TXO urges that Williams is controlling. It must be admitted that the differences between that case and this one are not great. Certainly if the District Court had refused the plaintiff's motion for voluntary dismissal, or insisted that the dismissal, if suffered, would be with prejudice, it would not have abused its discretion. It is true here, as it was in Williams, 627 F.2d at 159-60, that
Plaintiff's motion fails to disclose the reason for seeking the dismissal without prejudice. Plaintiff did not indicate that new evidence might be shown [on a second trial]. Even if there were such evidence, there is no indication that plaintiff could not have presented it during [the first] trial.
That the denial of the motion would not have been reversible as an abuse of discretion, however, does not mean that granting it was such an abuse. The very concept of discretion presupposes a zone of choice within which the trial courts may go either way.
We think the differences between this case on the one hand, and Williams and its precursors on the other, are great enough, though perhaps not by much, to justify a decision not to interfere with the choice made by the District Court. The trial here was not so far along as in Williams and the other cases cited. The plaintiff had not yet rested, and defendant had not yet moved for directed verdict. Although it was likely that that motion, when made, would have been granted, we cannot say that it was certain. The final witness's testimony might have differed somewhat from the parties' expectations. The District Court might have decided, as trial courts often do, to let the case proceed despite its initial view as to the insufficiency of plaintiff's case. Furthermore, by granting the nonsuit without prejudice the District Court allowed the plaintiff the opportunity to seek a state-court ruling on a state-law issue. The District Court's action here was immediately preceded by a thorough discussion of Arkansas law on surface damages. The court and plaintiff's counsel differed on the meaning of certain opinions of the Supreme Court of Arkansas. We have no reason to suppose that the District Court's view was not wholly reasonable, but its decision would still have been only a forecast, an educated guess about what the Arkansas state courts would do. The state courts, by contrast, can give an authoritative answer. This factor cuts in favor of the decision to allow plaintiff to try again.
In short, we cannot bring ourselves to say that it was an abuse of discretion to allow the dismissal without prejudice, and to that extent the judgment will be affirmed.
We turn now to defendant's alternative contention that it was an abuse of discretion not to impose a condition with respect to costs and attorneys' fees. In New York, C. & St. L.R.R. v. Vardaman, 181 F.2d...
To continue reading
Request your trial
-
Slusser v. Commonwealth
...judgment. Landrum v. Chippenham & Johnston-Willis Hosps., Inc. , 282 Va. 346, 352, 717 S.E.2d 134 (2011) (quoting Kern v. TXO Prod. Corp. , 738 F.2d 968, 970 (8th Cir. 1984) ). A trial court, "by definition," also "abuses its discretion when it makes an error of law." Porter v. Commonwealth......
-
SEC v. Lorin
...will not result to the other party." SEC v. American Bd. of Trade, 750 F.Supp. 100, 105 (S.D.N.Y.1990) (citing Kern v. TXO Prod. Corp., 738 F.2d 968, 970 (8th Cir. 1984)). As in American Board of Trade, the defendant here has made no opposition to the motion, and it is difficult to understa......
-
ENVIRONMENTAL DYNAMICS v. ROBERT TYER AND ASSOC.
...in Belle-Midwest, Marlow, and another Eighth Circuit Court of Appeals decision upon which Belle-Midwest relies, Kern v. TXO Prod. Corp., 738 F.2d 968, 972 (8th Cir.1984), the dismissal was without prejudice, therefore subjecting the defendant to the possibility of a subsequent suit on the s......
-
In re Volkswagen of America, Inc.
...impose legal constraints on its exercise by trial courts and in turn to guide our review—to which we now turn."); Kern v. TXO Prod. Corp., 738 F.2d 968, 970 (8th Cir. 1984) ("That is, when we say that a decision is discretionary, or that a district court has discretion to grant or deny a mo......