Kun Yuan Asset Management Company Ltd. v. Su
- Beth Freeman
- 5:21-cv-06236
- U.S. District Court · Northern District of California
- 3
In Kun Yuan v. Su, Judge Freeman terminated Kun Yuan’s dismissal motion, allowing it to file a notice of dismissal instead.
Kun Yuan may pursue dismissal by filing a notice of dismissal under Federal Rule of Civil Procedure 41(a)(1)(A)(i). Qiang Su’s motion to dismiss did not prevent that procedure, and the underlying claims were not decided.
What happened
Kun Yuan Asset Management Company Ltd. v. Qiang Su concerns claims involving fraud, breach of fiduciary duty, and breach of contract related to Qiang Su’s alleged handling of Kun Yuan’s U.S. accounts after his termination. During settlement discussions, Kun Yuan reduced its demand below the amount needed for a federal diversity case and sought to dismiss so it could refile in state court.
Kun Yuan asked the court to dismiss the case under a rule requiring a court order. Qiang Su opposed, arguing that Kun Yuan needed to file a formal, noticed motion and had acted in bad faith. The court agreed that Kun Yuan’s administrative filing was not the proper type of motion for dismissal under that rule.
Judge Freeman terminated Kun Yuan’s administrative motion without prejudice to Kun Yuan filing a notice of dismissal. Because Qiang Su had not filed an answer or a summary-judgment motion, the court said Kun Yuan could voluntarily dismiss without a court order; Qiang Su’s motion to dismiss did not prevent that procedure.
The detailed version
- Kun Yuan Asset Management Company Ltd. v. Su · No. 5:21-cv-06236
- Beth Freeman
- Jan. 24, 2022
Background
Kun Yuan Asset Management Company Ltd. sued Qiang Su for fraud, breach of fiduciary duty, and breach of contract. The claims concerned Su’s alleged withdrawal of funds and failure to transfer control over Kun Yuan’s U.S. accounts after Kun Yuan terminated him as its former Managing Director of U.S. operations.
During settlement discussions, Kun Yuan agreed to reduce its demand to $61,052.74. The court noted that this amount was below the $75,000 amount-in-controversy requirement for a diversity case. Kun Yuan therefore sought to dismiss its federal case so it could refile in state court.
The Motion and the Court’s Analysis
Kun Yuan filed an administrative motion seeking voluntary dismissal without prejudice under Federal Rule of Civil Procedure 41(a)(2). That rule permits dismissal at a plaintiff’s request by court order on terms the court considers proper, but the court held that a plaintiff seeking relief under that rule must file a noticed motion. Because Kun Yuan filed an administrative motion instead, the court stated that it could not dismiss the case under Rule 41(a)(2).
The court then considered whether Kun Yuan could dismiss under Rule 41(a)(1)(A)(i), which allows a plaintiff to dismiss without a court order by filing a notice before the opposing party serves an answer or a motion for summary judgment. Qiang Su had filed a motion to dismiss, but no answer or motion for summary judgment. The court held that Su’s motion to dismiss did not count as a summary-judgment motion for this purpose.
The court also explained that the materials attached to Su’s motion did not convert it into a summary-judgment motion. The materials supporting the jurisdictional challenge could be considered without conversion, and the materials cited for the failure-to-state-a-claim challenge were attached to the complaint.
Disposition
The court TERMINATED Kun Yuan’s administrative motion. It did so WITHOUT PREJUDICE to Kun Yuan filing a notice of dismissal under Rule 41(a)(1)(A)(i). The court stated that it would approve such a notice if Kun Yuan filed one. The opinion did not decide the merits of Kun Yuan’s fraud, fiduciary-duty, or contract claims, and it did not rule on the merits of Su’s motion to dismiss.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.