BDG Gotham Residential, LLC v. Western Waterproofing Company, Inc.
- Barbara Moses
- 1:19-cv-06386
- U.S. District Court · Southern District of New York
- 4
Western Waterproofing v. Allied World: Judge Barbara Moses rejected an improperly filed partial-dismissal stipulation and required refiling under Rule 41(a)(2).
Western Waterproofing, BDG Gotham Residential, and ZDG must refile their proposed partial dismissal under Rule 41(a)(2). Allied World’s objection to possible conditions was not decided, and the proposed dismissal was not approved through the rejected stipulation.
What happened
In Western Waterproofing Company, Inc. v. Allied World Specialty Insurance Company, BDG Gotham Residential LLC, and ZDG, LLC, Western, BDG, and ZDG tried to dismiss Western’s claims against BDG and ZDG based on a settlement. Allied World objected because it had appeared in the case but had not signed the stipulation.
The court ruled that the proposed dismissal could not take effect without court approval. Because it would dismiss only some claims in the lawsuit, the parties had to use Federal Rule of Civil Procedure 41(a)(2), rather than Rule 41(a)(1)(A)(ii), which permits dismissal by a stipulation signed by all parties who have appeared.
Judge Barbara Moses directed the clerk to reject the filed stipulation and required the settling parties to refile it under Rule 41(a)(2). The court did not decide whether to impose conditions protecting Allied World; Allied may make a properly supported further motion. The ruling was without prejudice to that motion.
The detailed version
- BDG Gotham Residential, LLC v. Western Waterproofing Company, Inc. · No. 1:19-cv-06386
- Barbara Moses
- Feb. 29, 2024
Background
Western Waterproofing Company, Inc. sued Allied World Specialty Insurance Company, BDG Gotham Residential LLC, and ZDG, LLC in an insurance-coverage lawsuit. BDG and ZDG had also asserted counterclaims against Western, but the court had already dismissed those counterclaims. Western, BDG, and ZDG reached a settlement and filed a stipulation seeking to dismiss with prejudice Western’s claims against BDG and ZDG.
Allied World had appeared in the lawsuit by filing an answer and notices of appearance, but it did not sign the stipulation. Allied objected to the proposed dismissal, arguing that it was a necessary party to the coverage lawsuit and asking that any dismissal include conditions related to Allied’s pending summary-judgment motion. Western asked the court to approve the stipulation without conditions.
Rule 41 analysis
The court held that the proposed filing was a partial dismissal because it would end only Western’s claims against BDG and ZDG while the lawsuit continued against Allied. Under Federal Rule of Civil Procedure 41(a)(1)(A)(ii), a dismissal by stipulation without a court order requires a stipulation signed by “all parties who have appeared.” Because Allied had appeared but had not signed, the stipulation could not dismiss Western’s claims under that provision.
The court therefore held that the partial dismissal had to proceed under Rule 41(a)(2). Under that rule, the court may approve a dismissal and impose terms it considers proper to prevent prejudice to a nonconsenting party. The court explained that Rule 41(a)(2) did not give Allied authority to object to the settlement’s terms or require the court to approve the settlement itself. It did allow the court to consider conditions protecting Allied from prejudice.
Disposition
The court directed the clerk to reject the stipulation filed at Docket No. 434 as improperly filed. Western, BDG, and ZDG were required to refile their stipulation under Rule 41(a)(2), and the stipulation would become effective only if signed by the court. The court declined to decide, based only on the parties’ letters, whether Allied was entitled to conditions concerning the effect of the dismissal on the pending coverage dispute or summary-judgment motions.
The court stated that this was its ruling on the letter motion at Docket No. 437 and that the ruling was without prejudice to a further motion by Allied.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.