Wednesday, May 23, 2018

Civil Procedure. Court affirms voluntary dismissal by plaintiff, despite “two-dismissal “ rule, because the effect of the dismissal is not ripe until a third action is filed.

Federal National Mortgage Association v. Johnston, 2018 VT 51 [filed May 4, 2018] 


EATON, J. Defendants Marjorie Johnston and Kamberleigh Johnston appeal the voluntary dismissal without prejudice filed by plaintiff bank Federal National Mortgage Association in this eviction action. On appeal, defendants argue that because a prior eviction action filed by bank had been dismissed, this case should have been dismissed with prejudice. Defendants also contend that the court erred in denying their motion to reconsider without a hearing and not dismissing the case on mootness grounds. We conclude that the effect of the voluntary dismissal is not ripe until a third action is filed and affirm.

Under Vermont Rule of Civil Procedure 41(a), a plaintiff can dismiss a case “without order of court” by filing a notice of dismissal if it is before the adverse party files an answer. A voluntary dismissal is usually without prejudice, “except that a notice of dismissal operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in any court.” V.R.C.P. 41(a)(1). This is known as the two-dismissal rule.

Because the dismissal is effective upon filing and without court order, there is a question whether the court retains authority after the dismissal to decide whether the two-dismissal rule applies.  We have held in a different context, that “[i]n general, a court should not dictate preclusion consequences at the time of deciding a first action.”

We conclude that defendants’ argument concerning the two-dismissal rule was not properly before the trial court and will become ripe only when and if a third action is filed. If a third action is filed, at that point, the court can determine the facts of the prior two actions and decide if the two-dismissal rule applies.

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