Hernandez v. Liberty One Bronx LLC

Background

Juan Hernandez sued Liberty One Bronx LLC and other defendants. Defendant 922 Southern LLC filed a motion to dismiss the complaint or, alternatively, for summary judgment. It also filed a motion for sanctions under Federal Rule of Civil Procedure 11. Hernandez then filed a notice seeking voluntary dismissal without prejudice under Rule 41(a)(1)(A)(i), which ordinarily permits a plaintiff to dismiss a case by notice before the opposing party serves an answer or motion for summary judgment.

922 Southern opposed dismissal without prejudice. It argued that its summary-judgment motion made Rule 41(a)(1)(A)(i) unavailable and requested that any dismissal be with prejudice. Hernandez argued that 922 Southern’s primary request was dismissal under Rule 12(b)(6), which concerns whether a complaint adequately states a legal claim. Alternatively, Hernandez asked the court to order dismissal without prejudice under Rule 41(a)(2).

Court’s analysis

The court explained that a motion to dismiss alone does not end a plaintiff’s right to dismiss by notice. But a motion for summary judgment does end that right, including when summary judgment is requested in the alternative. Therefore, any dismissal had to occur through Rule 41(a)(2), which allows dismissal only by court order and on terms the court considers proper.

The court considered whether dismissal without prejudice would cause 922 Southern legal prejudice beyond the possibility of a later lawsuit. It also considered the factors used to evaluate such a request, including the plaintiff’s diligence, possible improper or excessive conduct, how far the case had progressed, the defendant’s litigation expenses, the possibility of duplicative expenses, and the plaintiff’s explanation for seeking dismissal.

The court found that an unconditional dismissal without prejudice would be unduly prejudicial to 922 Southern. Although discovery had not occurred, 922 Southern had already spent money compiling evidence for a summary-judgment motion that, if successful, could produce a judgment on the merits. The court also noted that Hernandez had not explained why dismissal without prejudice was appropriate instead of resolving 922 Southern’s statute-of-limitations defense, and the timing suggested that Hernandez might be attempting to avoid a binding merits decision.

Ruling and available choices

Judge Vargas stated that the court would grant dismissal without prejudice under Rule 41(a)(2) only if 922 Southern received attorney’s fees and costs associated with filing its motion to dismiss and motion for summary judgment. Alternatively, the court would dismiss the case with prejudice without imposing those fees and costs. Hernandez could also withdraw the Rule 41(a)(2) dismissal request, in which event the court would decide the pending motion to dismiss.

The court deemed Hernandez’s notice of voluntary dismissal without prejudice to be without effect. It ordered Hernandez to file a letter by May 19, 2025, stating how he wanted to proceed with his request for dismissal under Rule 41(a)(2). The opinion did not decide the merits of 922 Southern’s pending motion to dismiss or motion for summary judgment.