Euro Motor Sport Inc. v. ARB Las Vegas

Opinion

1 2 UNITED STATES DISTRICT COURT DISTRICT OF NEVADA 3 4 Euro Motor Sport Inc., et al, Case No. 2:21-cv-00177-CDS-BNW

5 Plaintiffs Order Granting Plaintiffs’ Motion to Voluntarily Dismiss Claims 6 v. and Closing Case

7 ARB Las Vegas,

8 Defendant

9 10 Plaintiffs Euro Motor Sport, Inc. and Sammie Benson bring this action seeking 11 declaratory relief from defendant ARB Las Vegas. The plaintiffs assert that ARB sold their 12 Lamborghini after towing it from the Aria Resort & Casino. On March 28, 2023, United States 13 Magistrate Judge Brenda N. Weksler instructed ARB to retain counsel, as corporations are not 14 permitted to represent themselves. Order, ECF No. 61. ARB was warned that failure to comply 15 with the order could result in a default being entered against it. Id. Although ARB was warned 16 thrice that failure to retain counsel could result in the entry of a default judgment, ARB did not 17 retain counsel. ECF Nos. 61–63. As a result, on June 29, 2023, the clerk filed an entry of default. 18 ECF No. 65. 19 In lieu of moving for default judgment, the plaintiffs brought a joint motion for dismissal 20 of the action under local rule 7-1(c)(stating “[a] stipulation that has been signed by fewer than 21 all the parties or their attorneys will be treated—and must be filed—as a joint motion.”). See 22 generally, ECF No. 68. However, Rule 7-1(c) is not the proper vehicle to dispose of the claims 23 against ARB. ECF No. 69. The plaintiffs next submitted a stipulation of dismissal without 24 prejudice executed by ARB’s previous counsel—who had been terminated from this action on 25 March 28, 2023. ECF No. 70. The court would not approve the stipulation without the signature 26 of a legal representative of ARB. ECF No. 71. I held a hearing on August 17, 2023, to consider 1 plaintiff’s request for dismissal, permitting oral motion for voluntary dismissal pursuant to Rule 2 41(a)(2). ECF No. 72. Based on the plaintiffs’ representation at that hearing, and finding that 3 ARB will not suffer legal prejudice from the settlement or dismissal, I granted plaintiffs’ motion 4 for dismissal under Rule 41(a)(2). 5 I. Discussion 6 Rule 41(a)(2) provides that “[e]xcept as provided in Rule 41(a)(1), an action may be 7 dismissed at the plaintiff’s request only by court order, on terms that the court considers 8 proper.” Fed. R. Civ. P. 41(a)(2). When considering a motion under Rule 41(a)(2), courts “must 9 make three separate determinations: (1) whether to allow dismissal; (2) whether the dismissal 10 should be with or without prejudice; and (3) what terms and conditions, if any, should be 11 imposed.” Sherman v. Yahoo! Inc., 2015 WL 473270, at *2 (S.D. Cal. Feb. 5, 2015). 12 a. Whether to allow dismissal. 13 A motion for voluntary dismissal under Rule 41(a)(2) should be granted unless a 14 defendant can show that it will suffer some legal prejudice as a result of the dismissal. Smith v. 15 Lenches, 263 F.3d 972, 975 (9th Cir. 2001); Stevedoring Servs. of Am. v. Armilla I’l B.V., 889 F.2d 919, 921 16 (9th Cir. 1989) (stating that the purpose of Rule 41(a)(2) is “to permit a plaintiff to dismiss an 17 action without prejudice so long as the defendant will not be prejudiced...or unfairly affected by 18 dismissal.”). The Ninth Circuit has held that “legal prejudice” means “prejudice to some legal 19 interest, some legal claim, some legal argument.” Westlands Water Dist. v. United States, 100 F.3d 94, 20 97 (9th Cir. 1996). 21 No one appeared at the hearing on the dismissal on August 17, 2023, so ARB did not and 22 was unable to argue that dismissal would be prejudicial. Ultimately, based on plaintiffs’ 23 counsel’s representations, I found that dismissal is unlikely to prejudice the defendant as the 24 parties have negotiated an agreement to resolve this action; thus, it would be beneficial to allow 25 ARB an opportunity to satisfy the terms of that agreement as opposed to entering default 26 judgment against it. 1 b. Whether the dismissal should be with or without prejudice. 2 While a dismissal without prejudice is the default position stated in Rule 41(a)(2), the 3]| court has broad discretion on whether to dismiss an action with or without prejudice. Hargis v. 4|| Foster, 312 F.3d 404, 412 (9th Cir. 2002). Here, the plaintiffs move to dismiss the action without prejudice in the event that ARB fails to fully comply with the terms of their agreement. Based on ARB’s conduct in the action thus far, I am satisfied that dismissal without prejudice is 7|| warranted. 8 c. Terms and conditions. 9 Finally, I turn to whether any terms and conditions should be imposed. Plaintiffs assert that no additional terms and conditions are necessary so long as ARB complies with the terms of 11} the settlement negotiations. The parties have agreed that each party pay their own costs and 12|| attorneys’ fees. 13} II. Conclusion 14 Based on the arguments of counsel as set forth on the record, IT IS HEREBY ORDERED 15|| that the plaintiffs’ motion for voluntary dismissal of their claims without prejudice is 16|| GRANTED, with each party to pay their own costs and attorneys’ fees. 17 IT IS FURTHER ORDERED that the stipulation of dismissal without prejudice [ECF 18|| No. 70] is DENIED as moot. 19 The Clerk of Court is instructed to enter judgement accordingly and close this case. 20 DATED: August 22, 2023 /) 21 LZ. 0 culkin 33 Units x States District Judge 24 25 26