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Resolution Management v. Terrence J. Hickey and

June 29, 2011

RESOLUTION MANAGEMENT CONSULTANTS, INC., AND JEFFREY B. KOZEK,
PLAINTIFFS,
v.
TERRENCE J. HICKEY AND T. PATRICK BROYHILL, : DEFENDANTS.
RESOLUTION MANAGEMENT CONSULTANTS, INC.,
PLAINTIFF,
v.
T. PATRICK BROYHILL,
DEFENDANT.
JEFFREY B. KOZEK,
PLAINTIFF, V. : T. PATRICK BROYHILL,
DEFENDANT.
JEFFREY B. KOZEK
PLAINTIFF,
v.
TERRENCE J. HICKEY, DEFENDANT.
RESOLUTION MANAGEMENT CONSULTANTS, INC.,
PLAINTIFF,
v.
TERRENCE J. HICKEY, DEFENDANT.



The opinion of the court was delivered by: Renee Marie Bumb United States District Judge

MEMORANDUM ORDER

Currently pending before the Court are nine motions in five separate but closely related civil actions. In the interest of judicial economy and efficiency, the Court considers these motions together and issues this Order in each of the five cases.

The first motion was brought in Civil Action Number 10-6243 (the "Original Action") by the defendants, Terrence J. Hickey and T. Patrick Broyhill, to vacate the plaintiffs' voluntary dismissal of the complaint under Federal Rule of Civil Procedure 41(a)(1)(A)(i). After filing the notice of dismissal, the plaintiffs in the Original Action - Resolution Management Consultants, Inc. ("RMC") and its owner, Jeffrey B. Kozek (collectively the "Plaintiffs") -- each filed separate complaints against Hickey and Broyhill in state court. The defendants removed the complaints to federal court, alleging diversity jurisdiction under 28 U.S.C. § 1332(a). This resulted in four separate but related actions before this Court. [Civil Action Nos. 11-914, 11-946, 11-954, 11-956 (the "Related Actions").] Hickey and Broyhill (the "Defendants") then filed motions to dismiss for lack of jurisdiction in each of their respective cases. RMC and Kozek opposed the motions to dismiss and filed motions to remand, alleging that the defendant failed to show to a legal certainty the requisite amount in controversy. The Court will first address the motions to remand as it affects this Court's jurisdiction over the above-captioned matters. For the following reasons, the Court denies Defendants' motion to vacate the notice of dismissal in the Original Action and grants the motions to remand in the Related Actions. The Court therefore does not reach Defendants' motions to dismiss, which will be denied as moot.

BACKGROUND

On September 27, 2010, Plaintiffs initiated the Original Action with the filing of a complaint in the Superior Court of New Jersey, Burlington County. The complaint alleged malicious prosecution and civil conspiracy, arising from an employment dispute which led to litigation in South Carolina state court. Hickey and Broyhill, former RMC employees, had sued Plaintiffs for the same torts of malicious prosecution and civil conspiracy now alleged against them.*fn1

Defendants removed the complaint in the Original Action to this Court, alleging diversity jurisdiction. [Civil No. 10-6243, Dkt. Ent. 1.] Defendants subsequently moved to dismiss the complaint for lack of personal jurisdiction, improper venue, or, alternatively, to transfer venue. [Dkt. Ent. 2.]

Plaintiffs opposed Defendants' motion to dismiss and filed a motion to remand on the grounds that Defendants had failed to demonstrate the requisite amount in controversy. [Dkt. Ent. 4.] Before these motions were fully briefed, Plaintiffs filed a notice of voluntary dismissal pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i), which permits a plaintiff to dismiss an action without a court order where the opposing party has not yet filed an answer or a motion for summary judgment. The Clerk of Court accordingly closed this case. Defendants subsequently filed the instant motion to vacate dismissal and restore the case to the docket.

Subsequently, RMC and Kozek each filed two separate lawsuits in the Superior Court of New Jersey, Burlington County, against Hickey and Broyhill, respectively. Each complaint again alleged malicious prosecution and civil conspiracy. This time, however, each complaint limited the amount in controversy to "a total amount not to exceed $75,000." Nevertheless, the defendant in each case again removed the complaint to this Court, asserting diversity jurisdiction pursuant to 28 U.S.C. § 1332(a), and then moved to dismiss for lack of jurisdiction. The plaintiff in each case again moved to remand, arguing that the court lacked federal subject matter jurisdiction, because the defendant had failed to prove to a legal certainty that the amount in controversy exceeds $75,000. These motions are now ripe for adjudication.

DISCUSSION

A. Motion to Vacate Plaintiffs' Notice of Voluntary Dismissal Plaintiffs voluntarily dismissed the complaint in the Original Action pursuant to Rule 41(a)(1)(A)(i), which permits a plaintiff to dismiss an action without a court order by filing "a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment." Id. (emphasis added).

Defendants concede that they neither filed an answer nor a motion for summary judgment prior to Plaintiffs' voluntary dismissal. They argue instead that their motion to dismiss should be treated as the equivalent of a motion for summary judgment in light of the record that has been compiled in the briefing of the remand and dismissal/transfer motions. They also argue that letting Plaintiffs voluntarily dismiss the complaint would allow them to improperly manipulate this Court in order to defeat federal subject matter jurisdiction. (Defs.' Moving Br. 7.)

Plaintiffs respond that Defendants' argument runs contrary to the express language of Rule 41 and the binding case law that interprets it. (Opp. Br. 1.) They argue, correctly, that the filing of a notice of voluntary dismissal automatically dismisses the complaint, and a motion to dismiss under Rule 12 does not make such a notice untimely. They contend that this rule is "especially true" here, where the plaintiffs filed the notice of dismissal before the Court even ruled on the defendants' motion to dismiss and thus the Court never considered the merits of the complaint and did not hear any testimony. Id. (citing In re Bath & Kitchen Fixtures Antitrust Litig., 535 F.3d 161, 165-66 (3d Cir. 2008)).

In In re Bath & Kitchen Fixtures, the Third Circuit Court of Appeals set forth three key aspects of Rule 41(a)(1)(A)(i), which control this analysis:

First, a filing under the Rule is a notice, not a motion. Its effect is automatic: the defendant does not file a response, and no order of the district court is needed to end the action. Second, the notice results in a dismissal without prejudice (unless it states otherwise), as long as the plaintiff has never dismissed an action based on or including the same claim in a prior case. Third, the defendant has only two options for cutting off the plaintiff's right to end the case by notice: serving on the plaintiff an answer or a motion for summary judgment. 535 F.3d at 165 (reversing order vacating notice of voluntary dismissal and remanding to trial court with instructions to dismiss action without prejudice). Accordingly, Rule 41(a)(1)(A)(i) creates a bright-line test that limits the plaintiff's right of dismissal to the early stages of litigation; this "simplifies the court's task by telling it whether a suit has reached the point of no return. If the defendant has served either an answer or a summary judgment ...


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