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Centex Homes v. Financial Pacific Insurance Co.

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA


June 10, 2009

CENTEX HOMES, PLAINTIFF,
v.
FINANCIAL PACIFIC INSURANCE COMPANY, AMERICAN STATES INSURANCE COMPANY, SAFECO INSURANCE COMPANY AND CARR BUSINESS ENTERPRISES, INC., DEFENDANTS.

The opinion of the court was delivered by: Anthony W. Ishii Chief United States District Judge

ORDER GRANTING PLAINTIFF CENTEX'S MOTION AND DIRECTING CLERK OF COURT TO CLOSE THE CASE AS TO ASIC ONLY [Document # 52]

BACKGROUND

On April 12, 2007, Centex Homes ("Centex") filed suit against Financial Pacific Insurance Company, American States Insurance Company ("ASIC"), Safeco Insurance Company and Carr Buisness Enterpries, Inc. Centex's claim against ASIC alleges that ASIC was obligated to defend and indemnify Centex against certain third party homeowner claims and had failed to do so damaging Centex. ASIC filed an answer to the complaint on May 21, 2007.

Centex provides evidence showing that ASIC and Centex have since settled their dispute. As part of the settlement agreement between Centex and ASIC, Centex agreed to dismiss its complaint against ASIC. Co-defendant Carr Business Enterprises, Inc. was a signatory of the November 28th, 2007 settlement agreement between Centex and ASIC. In accordance with this agreement, Centex requested all parties to stipulate to a limited dismissal without prejudice of Centex's claims against ASIC. Centex provides further evidence that counsel for Carr Business Enterprises, Inc. refused to stipulate. Centex subsequently filed a motion to dismiss its claims against ASIC pursuant to 41(a)(2) of the Federal Rules of Civil Procedure. No party, including Carr Business Enterprises, Inc., has opposed Centex's motion.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 41(a)(2) "an action may be dismissed at the plaintiff's request only by court order, on terms that the court considers proper." The decision to grant a voluntary dismissal is left to the sound discretion of the district court and principally inquires whether the defendant would suffer some plain legal prejudice as a result of dismissal. Smith v. Lenches, 263 F.3d 972, 975 (9th Cir. 2001); Hamilton v. Firestone Tire & Rubber Co., Inc., 679 F.2d 143, 145 (9th Cir. 1982) . Plain legal prejudice requires more than the mere prospect of a facing a second law suit or the plaintiff acquiring some tactical advantage. Hamilton at 145. Examples of plain legal prejudice include loss of federal forum, the loss of a right to a jury trial, the frustration of a statute of limitation defense and the inability to conduct discovery. Wetlands Water Dist. V. United States, 100 F.3d 94, 97 (9th Cir. 1996).

DISCUSSION

From the briefing before the court, the court finds that the voluntary dismissal of ASIC does not engender any plain legal prejudice against any Defendant. District Courts may use their sound discretion in granting voluntary dismissals. Hamilton 679 F.2d at 145. The central inquiry in the use of the Court's discretion is whether the motion creates plain legal prejudice against the defendants. Id. None of the examples of the plain legal prejudice identified by the Ninth Circuit are invoked in granting Centex's voluntary dismissal. Thus, no defendant has shown any prejudice to the dismissal. Dismissal is therefore appropriate.

In addition, it is a proper and sound use of the Court's discretion to grant Centex's motion for voluntary dismissal because if facilitates the resolution of this action. Public policy favors granting the motion for dismissal as it narrows the scope of the dispute in this litigation. Dismissal facilitates the settlement agreement between Centex and ASIC. The factors for dismissal, combined with the lack of plain legal prejudice or opposition to the motion, militate in favor of granting Centex's motion for voluntary dismissal.

CONCLUSION AND ORDER

Accordingly, the court ORDERS that Centex's motion for voluntary dismissal of ASIC is GRANTED. The Clerk of the Court is DIRECTED to close this case as to ASIC only.

IT IS SO ORDERED.

20090610

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