2 FILED IN THE U.S. DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 3 Sep 23, 2020
SEAN F. MCAVOY, CLERK 4
5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 6
7 KACHIAN INDUSTRIES INC., a Delaware Corporation, NO: 2:19-CV-247-RMP 8 Plaintiff, ORDER DISMISSING CLAIM 9 WITHOUT PREJUDICE AND v. WITHOUT AN AWARD OF 10 ATTORNEY FEES OR COSTS JAYSON ELLIOTT, 11 Defendant. 12
13 BEFORE THE COURT is Plaintiff’s Motion to Dismiss without prejudice, 14 and without an award of attorney fees or costs. ECF No. 18. The Court has 15 considered the motion, Defendant’s response, and is fully informed. 16 BACKGROUND 17 On July 15, 2019, Defendant Jayson Elliott filed suit against Nicholas Wells, 18 Kachian Industries, Inc.’s sole shareholder, in the Santa Clara County, California 19 Superior Court. ECF No. 21. The California lawsuit is stayed pending the 20 outcome of the Washington disputes. ECF No. 20 at 5. 21 1 On July 17, 2019, Plaintiff Kachian filed its complaint in the Eastern District 2 of Washington, alleging breach of contract and conversion against Mr. Elliott.
3 ECF No. 1. Kachian alleged that this Court has subject matter jurisdiction based 4 on diversity of citizenship. Id. at 2. In response, Mr. Elliott filed a motion to 5 dismiss, arguing that the Court lacked subject matter jurisdiction because he is
6 allegedly a domiciliary of California, thereby destroying diversity among the 7 parties. ECF No. 7 at 1. He also argued that his mother, allegedly a party to the 8 relevant contract and a domiciliary of California, is an indispensable party who 9 must be joined. Id. On January 10, 2020, this Court granted Kachian’s request for
10 limited jurisdictional discovery related to the issues of Mr. Elliott’s domicile and 11 whether Ms. Elliott is an indispensable party. ECF No. 13. 12 However, on January 7, 2020, Mr. Elliott and Ms. Elliott filed suit in
13 Douglas County, alleging claims arising out of the same contract at issue in this 14 matter. ECF No. 20 at 21–27. Kachian has since filed an answer, affirmative 15 defenses, and counterclaims in the case filed in Douglas County, Washington. 16 ECF No. 20 at 36–46.
17 Kachian now moves for voluntary dismissal of the action before this Court 18 without prejudice pursuant to Fed. R. Civ. P. 41(a)(2), and without an award of 19 attorney fees or costs. Id. Mr. Elliott does not oppose the dismissal of this action
20 without prejudice, so long as it is conditioned on an award of fees and costs. ECF 21 No. 21 at 4. 1 DISCUSSION 2 Fed. R. Civ. P. 41(a)(2) permits a plaintiff, with the approval of the court, to
3 request that an action be dismissed by court order, on such terms and conditions 4 that the court deems proper. A motion for voluntary dismissal under Rule 41(a)(2) 5 is addressed to the district court’s sound discretion and the court’s order will not be
6 disturbed unless the court has abused its discretion. Stevedoring Servs. of Am. v. 7 Armilla Intern. B.V., 889 F.2d 919, 921 (1989). 8 “A district court should grant a motion for voluntary dismissal under Rule 9 41(a)(2) unless a defendant can show that it will suffer some plain legal prejudice
10 as a result.” Smith v. Lenches, 263 F.3d 972, 975 (9th Cir. 2001). “[L]egal 11 prejudice means prejudice to some legal interest, some legal claim, some legal 12 argument.” Id. at 976. “[U]ncertainty because a dispute remains unresolved” or
13 because “the threat of future litigation . . . causes uncertainty” does not result in 14 plain legal prejudice. Westlands Water Dist. v. United States, 100 F.3d 94, 96 (9th 15 Cir. 1996). 16 There is no evidence before the Court that granting Kachian’s motion for
17 voluntary dismissal will result in plain legal prejudice. There is ongoing litigation 18 arising from the same contract brought by Mr. Elliott in state court. Furthermore, 19 Mr. Elliott does not oppose the dismissal of this action without prejudice, so long
20 as it is conditioned on the imposition of fees and costs incurred in bringing its 21 motion for dismissal for lack of jurisdiction. ECF No. 21 at 4. 1 Although attorney fees and costs are often awarded as a condition of 2 dismissal without prejudice, the Ninth Circuit has stated that it is neither
3 mandatory nor an abuse of the Court’s discretion if the Court refuses to do so.1 4 See Stevedoring Servs. of Am, 889 F.2d at 921. In determining whether to award 5 costs, courts consider (1) any excessive and duplicative expense of a second
6 litigation; (2) the effort and expense incurred by a defendant in preparing for trial; 7 (3) the extent to which the litigation has progressed; and (4) the plaintiff's diligence 8 in moving to dismiss. Williams v. Peralta Cmty. Coll. Dist., 227 F.R.D. 538, 540 9 (N.D. Cal. 2005). A plaintiff’s litigation decisions that impose additional costs
10 upon defendants will not result in an award of fees and costs where the decisions 11 are permitted under the law and pursued in good faith. See Smith v. Lenches, 263 12 F.3d 972, 978–79 (9th Cir. 2001) (upholding refusal to award costs and fees when
13 plaintiffs pursued related claims in multiple forums). If a court awards costs and 14 fees, the court should limit the award to legal work which will not be useful in 15 continuing litigation. Koch v. Hankins, 8 F.3d 650, 652 (9th Cir. 1993). 16 First, as to duplicative expenses, there is a risk that should the parties not
17 reach a resolution in state court and Kachian refiles a complaint, Mr. Eilliott would 18 incur duplicative expenses. However, the court notes that Mr. Elliott has filed two 19 suits in two different state forums, first in California, and now in Washington,
20 1 Mr. Elliott concurs that the Court is not required to award attorneys’ fees and costs as a 21 1 arising from the same contract, which designates Washington courts as the 2 appropriate forum. ECF No. 20 at 14. Thus, duplicative litigation is not a novel
3 issue arising from this dispute or generated by the motion to dismiss. As a matter 4 of fairness, both parties have incurred additional fees and costs in litigating suits 5 related to the same dispute in various courts.
6 Second, regarding effort and expense, Mr. Elliott presumably has incurred 7 some fees and costs in challenging this Court’s jurisdiction. To the extent that the 8 fees and costs incurred by Mr. Elliott were all related to defending this action on 9 jurisdictional grounds, the Court agrees with Mr. Elliott that this work will not be
10 of any use in ongoing litigation in state court. See Koch, 8 F.3d at 652. 11 Third, the lawsuit filed in Douglas County is further along in litigation than 12 the same dispute brought before this Court. No answer has been filed in this Court
13 and the only motion before the Court was for dismissal on jurisdictional grounds. 14 The Court granted limited jurisdictional discovery in January of 2020. ECF No. 15 13. The parties’ pleadings since January have focused on pursuing their claims on 16 the merits in state court.
17 Finally, Kachian has diligently moved for dismissal of this action, following 18 litigation progressing on the merits in state court. Furthermore, Kachian’s suit 19 before this Court was not without merit. The Contract between the parties contains
20 a choice of law provision, consenting to the “exclusive jurisdiction of the state and 21 federal courts located in and for East Wenatchee, Washington.” ECF No. 20 at 14.
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2 FILED IN THE U.S. DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 3 Sep 23, 2020
SEAN F. MCAVOY, CLERK 4
5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 6
7 KACHIAN INDUSTRIES INC., a Delaware Corporation, NO: 2:19-CV-247-RMP 8 Plaintiff, ORDER DISMISSING CLAIM 9 WITHOUT PREJUDICE AND v. WITHOUT AN AWARD OF 10 ATTORNEY FEES OR COSTS JAYSON ELLIOTT, 11 Defendant. 12
13 BEFORE THE COURT is Plaintiff’s Motion to Dismiss without prejudice, 14 and without an award of attorney fees or costs. ECF No. 18. The Court has 15 considered the motion, Defendant’s response, and is fully informed. 16 BACKGROUND 17 On July 15, 2019, Defendant Jayson Elliott filed suit against Nicholas Wells, 18 Kachian Industries, Inc.’s sole shareholder, in the Santa Clara County, California 19 Superior Court. ECF No. 21. The California lawsuit is stayed pending the 20 outcome of the Washington disputes. ECF No. 20 at 5. 21 1 On July 17, 2019, Plaintiff Kachian filed its complaint in the Eastern District 2 of Washington, alleging breach of contract and conversion against Mr. Elliott.
3 ECF No. 1. Kachian alleged that this Court has subject matter jurisdiction based 4 on diversity of citizenship. Id. at 2. In response, Mr. Elliott filed a motion to 5 dismiss, arguing that the Court lacked subject matter jurisdiction because he is
6 allegedly a domiciliary of California, thereby destroying diversity among the 7 parties. ECF No. 7 at 1. He also argued that his mother, allegedly a party to the 8 relevant contract and a domiciliary of California, is an indispensable party who 9 must be joined. Id. On January 10, 2020, this Court granted Kachian’s request for
10 limited jurisdictional discovery related to the issues of Mr. Elliott’s domicile and 11 whether Ms. Elliott is an indispensable party. ECF No. 13. 12 However, on January 7, 2020, Mr. Elliott and Ms. Elliott filed suit in
13 Douglas County, alleging claims arising out of the same contract at issue in this 14 matter. ECF No. 20 at 21–27. Kachian has since filed an answer, affirmative 15 defenses, and counterclaims in the case filed in Douglas County, Washington. 16 ECF No. 20 at 36–46.
17 Kachian now moves for voluntary dismissal of the action before this Court 18 without prejudice pursuant to Fed. R. Civ. P. 41(a)(2), and without an award of 19 attorney fees or costs. Id. Mr. Elliott does not oppose the dismissal of this action
20 without prejudice, so long as it is conditioned on an award of fees and costs. ECF 21 No. 21 at 4. 1 DISCUSSION 2 Fed. R. Civ. P. 41(a)(2) permits a plaintiff, with the approval of the court, to
3 request that an action be dismissed by court order, on such terms and conditions 4 that the court deems proper. A motion for voluntary dismissal under Rule 41(a)(2) 5 is addressed to the district court’s sound discretion and the court’s order will not be
6 disturbed unless the court has abused its discretion. Stevedoring Servs. of Am. v. 7 Armilla Intern. B.V., 889 F.2d 919, 921 (1989). 8 “A district court should grant a motion for voluntary dismissal under Rule 9 41(a)(2) unless a defendant can show that it will suffer some plain legal prejudice
10 as a result.” Smith v. Lenches, 263 F.3d 972, 975 (9th Cir. 2001). “[L]egal 11 prejudice means prejudice to some legal interest, some legal claim, some legal 12 argument.” Id. at 976. “[U]ncertainty because a dispute remains unresolved” or
13 because “the threat of future litigation . . . causes uncertainty” does not result in 14 plain legal prejudice. Westlands Water Dist. v. United States, 100 F.3d 94, 96 (9th 15 Cir. 1996). 16 There is no evidence before the Court that granting Kachian’s motion for
17 voluntary dismissal will result in plain legal prejudice. There is ongoing litigation 18 arising from the same contract brought by Mr. Elliott in state court. Furthermore, 19 Mr. Elliott does not oppose the dismissal of this action without prejudice, so long
20 as it is conditioned on the imposition of fees and costs incurred in bringing its 21 motion for dismissal for lack of jurisdiction. ECF No. 21 at 4. 1 Although attorney fees and costs are often awarded as a condition of 2 dismissal without prejudice, the Ninth Circuit has stated that it is neither
3 mandatory nor an abuse of the Court’s discretion if the Court refuses to do so.1 4 See Stevedoring Servs. of Am, 889 F.2d at 921. In determining whether to award 5 costs, courts consider (1) any excessive and duplicative expense of a second
6 litigation; (2) the effort and expense incurred by a defendant in preparing for trial; 7 (3) the extent to which the litigation has progressed; and (4) the plaintiff's diligence 8 in moving to dismiss. Williams v. Peralta Cmty. Coll. Dist., 227 F.R.D. 538, 540 9 (N.D. Cal. 2005). A plaintiff’s litigation decisions that impose additional costs
10 upon defendants will not result in an award of fees and costs where the decisions 11 are permitted under the law and pursued in good faith. See Smith v. Lenches, 263 12 F.3d 972, 978–79 (9th Cir. 2001) (upholding refusal to award costs and fees when
13 plaintiffs pursued related claims in multiple forums). If a court awards costs and 14 fees, the court should limit the award to legal work which will not be useful in 15 continuing litigation. Koch v. Hankins, 8 F.3d 650, 652 (9th Cir. 1993). 16 First, as to duplicative expenses, there is a risk that should the parties not
17 reach a resolution in state court and Kachian refiles a complaint, Mr. Eilliott would 18 incur duplicative expenses. However, the court notes that Mr. Elliott has filed two 19 suits in two different state forums, first in California, and now in Washington,
20 1 Mr. Elliott concurs that the Court is not required to award attorneys’ fees and costs as a 21 1 arising from the same contract, which designates Washington courts as the 2 appropriate forum. ECF No. 20 at 14. Thus, duplicative litigation is not a novel
3 issue arising from this dispute or generated by the motion to dismiss. As a matter 4 of fairness, both parties have incurred additional fees and costs in litigating suits 5 related to the same dispute in various courts.
6 Second, regarding effort and expense, Mr. Elliott presumably has incurred 7 some fees and costs in challenging this Court’s jurisdiction. To the extent that the 8 fees and costs incurred by Mr. Elliott were all related to defending this action on 9 jurisdictional grounds, the Court agrees with Mr. Elliott that this work will not be
10 of any use in ongoing litigation in state court. See Koch, 8 F.3d at 652. 11 Third, the lawsuit filed in Douglas County is further along in litigation than 12 the same dispute brought before this Court. No answer has been filed in this Court
13 and the only motion before the Court was for dismissal on jurisdictional grounds. 14 The Court granted limited jurisdictional discovery in January of 2020. ECF No. 15 13. The parties’ pleadings since January have focused on pursuing their claims on 16 the merits in state court.
17 Finally, Kachian has diligently moved for dismissal of this action, following 18 litigation progressing on the merits in state court. Furthermore, Kachian’s suit 19 before this Court was not without merit. The Contract between the parties contains
20 a choice of law provision, consenting to the “exclusive jurisdiction of the state and 21 federal courts located in and for East Wenatchee, Washington.” ECF No. 20 at 14. 1 There were also conflicting representations and evidence as to whether Mr. 2 Elliott’s domicile was Washington or California when the suit was filed, which the
3 Court ultimately granted limited jurisdictional discovery in an effort to resolve. 4 ECF No. 13; See Santa Rosa Memorial Hospital v. Kent, 688 Fed. Appx. 492, 494 5 (9th Cir. 2017) (District court’s decision in refusing to order payment of costs and
6 fees “justified by its consideration of the legitimate factor of the merit of Plaintiff’s 7 claims) (citing Stevedoring Serv. of Am., 889 F.2d at 922) 8 Whereas the purpose of such awards is generally to reimburse the defendant 9 for litigation costs incurred, in view of the risk faced by the defendant that the
10 same suit will be refiled, the Court finds that risk minimal here. See Colombrito v. 11 Kelly, 764 F.2d 122, 133–34 (2d. Cir. 1985). After considering this minimal risk 12 of Kachian refiling its claim, and the procedural history of this case, including two
13 separate suits commenced by Mr. Elliott, the Court concludes dismissal need not 14 be conditioned on an award of fees and costs. 15 Accordingly, IT IS HEREBY ORDERED: 16 1. Plaintiff’s Motion for Voluntary Dismissal Without Prejudice and
17 Without an Award of Fees and Costs, ECF No. 18 is GRANTED. 18 2. Plaintiff’s claims are DISMISSED WITHOUT PREJUDICE. 19 3. Any remaining, pending motions are DENIED AS MOOT, and any
20 hearing dates are STRICKEN. 21 1 IT IS SO ORDERED. The District Court Clerk is directed to enter this 2 Order, provide copies to counsel, and close this case.
3 DATED September 23, 2020.
4 s/ Rosanna Malouf Peterson 5 ROSANNA MALOUF PETERSON United States District Judge 6 7 8 9 10 11 12 13 14 15 16
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