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Wham-O, Inc. v. Manley Toys

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA


June 25, 2010

WHAM-O, INC., PLAINTIFF,
v.
MANLEY TOYS, LTD., ET AL., DEFENDANTS.

The opinion of the court was delivered by: Honorable Ronald S.W. Lew Senior, U.S. District Court Judge

ORDER re: Defendant's Motion for Order of Dismissal [554]

Defendant Manley Toys, Ltd's Motion for Order of Dismissal of Defendant's First Amended Counterclaim [554], pursuant to Rule 41(a)(2), was set for hearing on June 3, 2010. Having taken the matter under submission on June 2, 2010, and having reviewed all papers submitted pertaining to this motion, the Court NOW FINDS AND RULES AS FOLLOWS:

Defendant's Motion is hereby GRANTED.

Plaintiff's insurer is entitled to settle with Defendant under the terms of Plaintiff's policy, pursuant to California insurance law. See Hurvitz v. St. Paul Fire & Marine Ins. Co., 109 Cal. App. 4th 918, 920 (2003). The Settlement Agreement executed between Plaintiff's insurer, American Home Assurance Company, and Defendant, Manley Toys, Ltd., calls for a dismissal with prejudice of the Counterclaim presently before the Court. Pursuant to Federal Rule of Civil Procedure 41(a)(2), the Court may issue a voluntary dismissal with prejudice "on terms that the court considers proper." Here, the Court finds that Plaintiff suffers no plain legal prejudice as the result of this dismissal.

Additionally, pursuant to Federal Rule of Civil Procedure 54(d)(1), a prevailing party is entitled to recover its costs. Local Rule 54-2.4 provides, "the Court shall determine the prevailing party when the case is voluntarily dismissed or otherwise voluntarily terminated." "[A] party could be deemed 'prevailing' even despite failure on a 'central' issue as long as the party had prevailed on 'any significant issue in litigation which achieved some of the benefit the parties sought in bringing suit.'" Park v. Anaheim Union High Sch. Dist., 464 F.3d 1025, 1036 (9th Cir. 2006) (citing Tex. State Teachers Ass'n, 489 U.S. 782, 791-793 (1989)). Here, the Court finds that a dismissal with prejudice prevents Defendant from asserting all future claims made in the Counterclaim. Therefore, Plaintiff has prevailed on those claims and is deemed the prevailing party. As held by the Ninth Circuit, "a party in whose favor judgment is rendered is generally the prevailing party for purposes of awarding costs under Rule 54(d)." San Diego Police Officers' Ass'n v. San Diego City Employees Ret. Sys., 568 F.3d 725, 741 (9th Cir. 2009).

Therefore, the Court GRANTS Defendant's Motion for Order of Dismissal of Defendant's First Amended Counterclaim, pursuant to Federal Rule of Civil Procedure 41(a)(2). Furthermore, the Court awards to Plaintiff costs associated with Defendant's Counterclaim, pursuant to Federal Rule of Civil Procedure 54(d)(1).

IT IS SO ORDERED.

20100625

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