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PLANET INS. CO. v. GRIFFITH

March 14, 1989

PLANET INSURANCE COMPANY, Plaintiff,
v.
F. LEE GRIFFITH, DAVID D'ADDARIO, ALBERT PAOLINI, LAWRENCE D'ADDARIO, and LAWRENCE B. SCHWARTZ, Co-Executors of the Estate of F. FRANCIS D'ADDARIO, Deceased; VERNON BURNIDGE, Executor of the Estate of MARGARET BURNIDGE, Deceased; GLORIA GRIBBIN SMEJKAL, Administratrix of the Estate of IVAN SMEJKAL, Deceased; AIR HI-HO, INC.; HI-HO INDUSTRIES; D'ADDARIO INDUSTRIES, ENVIRONMENTAL WASTE REMOVAL, INC., and EWR, INC., Defendants



The opinion of the court was delivered by: NORGLE

 CHARLES RONALD NORGLE, UNITED STATES DISTRICT JUDGE.

 This matter is before the court on two motions: the motion of plaintiff, Planet Insurance Company, to voluntarily dismiss this matter without prejudice, pursuant to Fed. R. Civ. P. 41(a)(2); and the motion of defendant, Gloria Gribbin Smejkal, as Administratrix of the Estate of Ivan Smejkal, to transfer this matter to the U.S. District Court of Connecticut, pursuant to 28 U.S.C. § 1404(a). For the following reasons, both motions are denied.

 FACTS

 This action is the result of the crash of an airplane on March 5, 1986 near Aurora, Illinois, which caused the death of all five persons on board. Currently pending in the Circuit Court of Cook County, Illinois, are wrongful death actions filed by the estates of four of the deceased. Griffith v. Mitsubishi Aircraft International, 86 L 12525; Burnidge v. Air Hi-Ho, Inc., 88 L 2725; Smejkal v. The Garrett Corporation, 88 L 3630; Klein v. Mitsubishi Aircraft International, 88 L 2598. On January 7, 1987, Planet filed this action seeking a declaratory judgment that, under policy number BA-JU-046083 issued to Air Hi-Ho, Inc., Planet does not have a duty to defend against the wrongful death actions or to indemnify against losses or liability resulting from the plane crash. The defendants in this action include the plaintiffs in the underlying wrongful death actions. To deny coverage, Planet relies upon workmen's compensation and commercial purpose exclusions which it asserts are applicable in part through a "piercing the corporate veil" theory. As a result of this action, Smejkal, a plaintiff in one of the underlying wrongful death actions, filed a "second" wrongful death action including defendants who are not Planet's insureds.

 Since this matter was filed, more than two years ago, the parties have filed numerous pleadings, including counterclaims by Smejkal, and have undertaken substantial discovery. Depositions have been completed and discovery is closed. Planet now seeks to voluntarily dismiss this matter without prejudice and without an assessment of costs or fees. The defendants strenuously object.

 DISCUSSION

 Rule 41(a)(2) provides that:

 
An action shall not be dismissed at the plaintiff's instance save upon order of the court and upon such terms and conditions as the court deems proper. If a counterclaim has been pleaded by a defendant prior to the service upon the defendant of the plaintiff's motion to dismiss, the action shall not be dismissed against the defendant's objection unless the counterclaim can remain pending for independent adjudication by the court. Unless otherwise specified in the order, a dismissal under this paragraph is without prejudice.

 Dismissal of an action without prejudice pursuant to Rule 41(a)(2) is left to the sound discretion of the court. Tyco Laboratories, Inc. v. Koppers Co., Inc., 627 F.2d 54, 56 (7th Cir. 1980). The "basic purpose of Rule 41(a)(2) is to freely permit the plaintiff, with court approval, to voluntarily dismiss an action so long as no other party will be prejudiced." Puerto Rico Maritime Shipping Authority v. Leith, 668 F.2d 46, 49 (1st Cir. 1981) quoting LeCompte v. Mr. Chip Inc., 528 F.2d 601, 604 (5th Cir. 1976). Thus, discretion is abused where the defendant will suffer "plain legal prejudice" as a result of the dismissal. U.S. v. Outboard Marine Corp., 789 F.2d 497, 502 (7th Cir. 1986). The Seventh Circuit has enumerated the following as among the factors impacting upon whether a dismissal without prejudice will result in legal prejudice to the defendant:

 Pace v. Southern Express Co., 409 F.2d 331, 334 (7th Cir. 1969). These factors are simply a guide for the court in exercising its discretion, Kovalic v. DEC International, Inc., 855 F.2d 471, 474 (7th Cir. 1988) (not all factors need be present), as other circuits reference different factors as evidencing legal prejudice. See Selas Corp. of America v. Wilshire Oil Company of Texas, 57 F.R.D. 3, 5-6 (E.D. Penn. 1972) quoting Harvey Aluminum, Inc. v. American Cyanamid Co., 15 F.R.D. 14, 18 (S.D.N.Y. 1953).

 Dismissals are granted under the terms and conditions necessary to protect other parties from prejudice. Victorian Beauty Supply, Inc. v. La Maur, Inc., 98 F.R.D. 306, 309 (N.D. Ill. 1983). Dismissals have been granted with prejudice, even where the defendant did not object to a motion to dismiss without prejudice. See Koefoot v. American College of Surgeons, 652 F. Supp. 882, 893-94 (N.D. Ill. 1986). If the dismissal is without prejudice, a common condition is the payment of the other party's costs or fees. United States v. Outboard Marine Corp., 104 F.R.D. 405, 413 (N.D. Ill. 1984) aff'd 789 F.2d 497 (7th Cir. 1986).

 Based upon an examination of the relevant factors and its knowledge of the case, the court concludes that a dismissal without prejudice and without the award of costs and fees would be improper as it would expose the defendants to legal ...


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