IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 99-10149
_____________________
ROGER KEVIN CONLEY; PAMELA M CONLEY
Plaintiffs-Appellants
v.
AETNA LIFE INSURANCE COMPANY, aka Aetna/US Healthcare, Inc
Defendant-Appellee
_________________________________________________________________
Appeal from the United States District Court
for the Northern District of Texas
(4:97-CV-1080-Y)
_________________________________________________________________
April 11, 2000
Before KING, Chief Judge, and REAVLEY and STEWART, Circuit
Judges.
PER CURIAM:*
Plaintiffs-Appellants Roger Kevin Conley and Pamela M.
Conley appeal the district court’s judgment dismissing their
lawsuit with prejudice. On appeal, they argue that the district
court abused its discretion in attaching conditions to the
withdrawal of their motion to dismiss without prejudice. For the
reasons stated below, we AFFIRM.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
I. PROCEDURAL HISTORY
Plaintiffs-Appellants Roger and Pamela Conley (“the
Conleys”) originally filed this action in Texas state court,
complaining of Defendant-Appellee Aetna Life Insurance Company’s
(“Aetna”) refusal to authorize Total Parenteral Nutrition (“TPN”)
treatment under the Conleys’ medical insurance policy. Their
petition alleged substandard quality of care, corporate practice
of medicine under Texas Insurance Code Article 4496(b), negligent
utilization review, negligent hiring and retention, respondeat
superior, negligent credentialing and negligent monitoring,
tortious interference with the physician/patient relationship,
delay of treatment, and misrepresentation claims.
In December 1997, Aetna removed the action to the United
States District Court for the Northern District of Texas pursuant
to 28 U.S.C. § 1441(a) on diversity grounds. Aetna filed an
answer in January 1998, and in February 1998, the parties
participated in a status conference and submitted a discovery
plan. The Conleys then filed a motion to amend their complaint
and a motion to remand. The district court denied both motions
in an order issued on March 10, 1998. The parties conducted
discovery between approximately March and November 1998. In
November 1998, the district court extended the deadline for the
completion of discovery until January 1999 for the limited
purpose of deposing six Aetna employees. The parties also
participated in mediation in late 1998.
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On January 11, 1999, the Conleys filed a Motion to Dismiss
Without Prejudice. Despite Aetna’s opposition, the district
court partially granted the Conleys’ motion. Invoking its
authority under Federal Rule of Civil Procedure 41(a)(2), the
district court gave the Conleys the option to either (1) have the
action dismissed with prejudice, or (2) pay Aetna’s litigation
expenses and have the action dismissed without prejudice. The
Conleys then filed an Expedited Motion for Clarification of the
court’s decision. The district court responded to this motion by
issuing a second order that offered a third option. Under this
option, the Conleys could withdraw their Motion to Dismiss
Without Prejudice and proceed with the action, so long as they
paid the litigation expenses Aetna had incurred in responding to
their motion. On January 29, 1999, citing their inability to pay
for any of Aetna’s litigation expenses, the Conleys elected to
dismiss the action with prejudice. However, in their Election to
Dismiss With Prejudice, the Conleys specifically stated that they
were not waiving their right to appeal. The district court then
ordered the case dismissed with prejudice and entered a final
judgment the same day. The Conleys timely appeal.
II. DISCUSSION
On appeal, the Conleys argue that the district court abused
its discretion by predicating the Conleys’ withdrawal of their
Motion to Dismiss Without Prejudice upon the payment of Aetna’s
attorneys fees and litigation costs incurred in responding to the
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motion. Aetna, in addition to contesting the merits of this
claim, argues that this court lacks jurisdiction to hear the
appeal, and that the Conleys waived their right to appeal.
A. Jurisdiction
As a court of limited jurisdiction, we are obliged to
examine the basis of our jurisdiction. See Thompson v. Betts,
754 F.2d 1243, 1244 (5th Cir. 1985). Thus, as a preliminary
matter, we address Aetna’s contention that we lack jurisdiction
to hear this appeal. Aetna asserts that this Court lacks
jurisdiction to hear the Conleys’ appeal because they voluntarily
dismissed their case. As a result, Aetna argues, the dismissal
order is only appealable if the conditions imposed on the
dismissal caused the Conleys to suffer legal prejudice, and if
the Conleys did not accept or legally acquiesce to those
conditions.
It is well-established that a dismissal with prejudice
operates as a final adjudication upon the merits from which a
plaintiff may appeal. See Nichols v. Mobile Bd. of Realtors,
Inc., 675 F.2d 671, 673 (5th Cir. Unit B 1982); LeCompte v. Mr.
Chip, 528 F.2d 601, 603 (5th Cir. 1978) (citing Durham v. Florida
East Coast Ry. Co., 385 F.2d 366 (5th Cir. 1967)); 15A WRIGHT &
MILLER, FEDERAL PRACTICE AND PROCEDURE: CIVIL, § 3914.8. Furthermore,
if a plaintiff rejects the conditions proposed by the district
court for dismissal without prejudice under Rule 41(a)(2) and the
action is dismissed with prejudice, the plaintiff can appeal.
4
See Mortgage Guaranty Ins. Corp. v. Richard Carlyon Co., 904 F.2d
298, 301 n. 5 (5th Cir. 1990); Yoffe v. Keller Indus., Inc., 582
F.2d 982, 983 (5th Cir. 1978) (per curiam) (denying petition for
rehearing), cert. denied, 440 U.S. 914 (1979) (“Yoffe II”);
Yoffe v. Keller Indus., Inc., 580 F.2d 126, 131 n. 13 (5th Cir.
1978) (“Yoffe I”).
Aetna suggests that the dismissal should be considered a
voluntary dismissal without prejudice for the purposes of appeal
because the Conleys elected dismissal with prejudice, one of the
options presented by the district court, instead of rejecting the
conditions and waiting for the district court to enter a
dismissal with prejudice. However, we are unpersuaded that there
is a distinction between explicitly electing to dismiss with
prejudice and electing to act such that the district court will
inevitably dismiss with prejudice. Consequently, we find that
this court has jurisdiction to hear the instant appeal, and turn
to the merits of the Conleys’ claim.
B. Conditions Imposed on Withdrawal
Federal Rule of Civil Procedure 41(a)(2) permits a district
court to dismiss an action “at a plaintiff’s instance . . . upon
such terms and conditions as the court deems proper.” Thus,
under Rule 41(a)(2), a district court has the discretion to
create and attach conditions to the grant of a plaintiff’s motion
to dismiss without prejudice. See LeCompte, 528 F.2d at 604.
The conditions placed by the district court upon the withdrawal
5
of the Conleys’ Motion to Dismiss Without Prejudice will be
reviewed for an abuse of discretion. See id.
The Conleys contend that the district court abused its
discretion by conditioning the right to withdraw their Motion to
Dismiss Without Prejudice upon payment of Aetna’s litigation
expenses incurred in responding to the motion. They argue that a
plaintiff has an unconditional right to withdraw a motion, and
that premising the withdrawal of their motion upon payment of
Aetna’s litigation expenses deprived them of the opportunity to
continue the lawsuit and forced them to dismiss with prejudice.
The Conleys maintain that the district court abused its
discretion in imposing such a condition.
This court has held, contrary to the Conleys’ assertion,
that a district court has the authority to attach conditions to
the withdrawal of a motion to dismiss without prejudice under
Rule 41(a)(2). See Yoffe II, 582 F.2d at 984. Thus, the only
remaining question is whether the specific terms and conditions,
rather than the mere fact of having imposed them, exceeded the
district court’s discretion.
The authority of a district court under Rule 41(a)(2) to
attach conditions to a dismissal without prejudice or to a
withdrawal of the motion to dismiss without prejudice exists so
that the court can protect the interests of defendants. See id.;
LeCompte, 528 F.2d at 604 (citing 9 WRIGHT & MILLER, FEDERAL PRACTICE
AND PROCEDURE: CIVIL, §§ 2362, 2364, at 149, 165 (1971)). The
conditions must alleviate any serious prejudice that a defendant
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might suffer as a result of the dismissal. See LeCompte, 528
F.2d at 605. This court has held that attorney fees and costs
may properly be awarded as a condition of dismissal. See Yoffe
I, 580 F.2d at 129 n.9; LeCompte, 528 F.2d at 603.
In Yoffe II, this court upheld a district court’s award of
attorney fees and costs as a condition of a plaintiff’s
withdrawal of the plaintiff’s earlier motion to dismiss. See
Yoffe II, 984 F.2d at 984. We held that the district court was
within its discretion in awarding the attorney fees and costs
incurred by the defendant up to the point of the motion to
dismiss. See id. Furthermore, we deemed it proper to add those
fees and costs incurred in preparing for an evidentiary hearing
to determine the amount of those costs, as well as the costs
incurred in defending the appeal, to the original amount awarded
by the district court. See id.
In light of this precedent, the Conleys’ argument must fail.
Here, the district court acted within its discretion when it
conditioned the withdrawal of the Conleys’ Motion to Dismiss upon
payment of costs incurred by Aetna in responding to the motion.
This condition alleviated any harm caused to Aetna by the
Conleys’ withdrawal of the motion. Furthermore, the condition
was well within the parameters of the conditions approved by this
court in Yoffe II. Therefore, the district court did not abuse
its discretion.
III. CONCLUSION
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For the above-stated reasons, we AFFIRM.
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