United States District Court, D. Utah
CML METALS CORP. and PIC RAILROAD, INC. d/b/a CML RAILROAD, INC., Plaintiffs and Counterclaim Defendants,
FIRST UNION RAIL CORP., HELM-PACIFIC LEASING, and HELM FINANCIAL CORP., Defendants and Counterclaim Plaintiffs. ALONG WITH RELATED CLAIMS.
MEMORANDUM DECISION AND ORDER DISMISSING
PLAINTIFF'S COMPLAINT WITHOUT PREJUDICE AND DISMISSING AS
MOOT DEFENDANT'S MOTION FOR JUDGMENT ON THE
N. Parrish, United States District Court Judge
February 27, 2017, this court issued an Order to Show Cause,
(Docket No. 102), which required Plaintiffs/Counterclaim
Defendants CML M s Corp. and PIC Railroad, Inc.
(collectively, “CML”) to explain to the court why
they had not responded to Defendant/Counterclaim Plaintiff
First Union Rail Corp.'s (“First Union”)
Motion for Judgment on the Pleadings filed on July 20, 2016,
(Docket No. 79). The court indicated that, absent some
showing of good reason for the neglect, Plaintiffs'
complaint would be dismissed without prejudice as a sanction.
responded the next day, reiterating that they had made a
general assignment of assets (including this lawsuit) for the
benefit of creditors to Guidepoint (“the
Assignee”) in Utah State court. (Docket No. 103). CML
explained that this assignment extinguished any legal or
financial interest they had in their complaint and indicated
that they would not oppose a dismissal without prejudice.
Defendants Gilbert Development and Black Iron, LLC
(collectively, “Black Iron”) soon responded to
the Order, urging that, in light of the assignment of their
interest in the lawsuit, CML was not the proper party in
interest and should not be allowed to respond to the Order.
(Docket No. 104). Black Iron also suggested that the Assignee
be somehow joined in the proceedings as the proper party in
Union also responded, (Docket No. 105), objecting to any
dismissal of CML's complaint without prejudice and
requesting that the court dismiss the complaint with
prejudice either for failure to prosecute or as a matter of
law as articulated in its Motion for Judgment on the
Pleadings, (Docket No. 79).
indicated in its previous Order to Show Cause, this court is
not inclined to grant First Union's Motion for Judgment
on the Pleadings on the merits without the benefit of
adversarial briefing. First Union's response does not
assuage the court's concerns regarding the effect that an
on-the-merits resolution here would have on related claims
(both within this case and in pending and future cases). The
potential for disruption of related proceedings is
unwarranted and unnecessary in this instance. Moreover, while
First Union's Motion is facially credible, the court is
not convinced it could fully withstand an evaluation on the
court believes that a sanction for failure to prosecute is
appropriate in this case. See Fed. R. Civ. P. 41(b)
(providing for involuntary dismissal); Rogers v. Andrus
Transp. Servs., 502 F.3d 1147, 1151 (10th Cir. 2007)
(“Rule 41(b) has long been interpreted to permit courts
to dismiss actions sua sponte for plaintiff's failure to
prosecute.” (internal alterations and quotations
omitted)); Reed v. Bennett, 312 F.3d 1190, 1195
(10th Cir. 2002) (“A district court undoubtedly has
discretion to sanction a party for failing to prosecute or
defend a case . . . [and] [s]uch sanctions may include
dismissing the party's case . . . .”). The court
acknowledges, as Black Iron has suggested, that CML is likely
not the proper party in interest here and is therefore not
the appropriate target of either the Order or any resulting
sanction. But even if the Assignee is the proper party in
interest here, the sanction of dismissal for failure to
prosecute is still appropriate. The Assignee is ostensibly
aware of this lawsuit as it is listed among the assets in the
general assignment filed with the state court. (Docket No.
104, at 23). Thus, the Assignee has had ample notice and
opportunity to take over prosecution of CML's complaint
or to take affirmative steps to join the proceedings but has
failed to do so. And, even if the Assignee is somehow
justifiably unaware of the status of this lawsuit, dismissal
here will be without prejudice, allowing for pursuit of the
claims at a later date. Since dismissal here is without
prejudice, this court need not evaluate any additional
factors. See Nasious v. Two Unknown B.I.C.E. Agents,
492 F.3d 1158, 1162 (10th Cir. 2007) (explaining that an
order of dismissal without prejudice may be entered
“without attention to any particular
procedures”); AdvantEdge Bus. Grp. v. Thomas E.
Mestmaker & Assocs., Inc., 552 F.3d 1233, 1236 (10th
Cir. 2009) (applying that standard to a dismissal for failure
foregoing reasons, the court ORDERS the following:
Plaintiffs/Counterclaim Defendants CML M s Corp. and PIC
Railroad, Inc.'s Third Amended Complaint (Docket No. 65)
is DISMISSED without prejudice.
Defendant/Counterclaim Plaintiff First Union's Motion for
Judgment on the ...