Sutton Place Development Company, a Florida Corporation, Henry Weiss and Carol Weiss v. Abacus Mortgage Investment Company

ESCHBACH, Senior Circuit Judge,

dissenting.

The sole issue in this appeal is whether a paper styled a “motion” for voluntary dismissal was in reality a “notice” of dismissal, triggering the bar of the “two dismissal” rule contained in Fed.R.Civ.P. 41(a)(1). Because I believe that the majority has assumed away this issue, because I believe the issue is a factual one, and because I believe the finding of the experienced trial judge on this issue was not clearly erroneous, I must dissent.

I am in complete agreement with the majority’s statement of the general rule that “[b]y its own clear terms the ‘two dismissal’ rule applies only when the second dismissal is by notice under Rule 41(a)(1).” 9 Wright & Miller, Federal Practice and Procedure ¶ 2368 at 188 (1971). The Rule does not apply where the dismissal is by stipulation or upon motion. However, whether the second dismissal was by motion is precisely what is at issue in this case. The district court found that:

Although the form of the dismissal was an order of a notice of dismissal, the plaintiffs achieved what a notice of dismissal would have accomplished. To refuse to apply the two dismissal rule because an order dismissed the case would be to permit plaintiffs to circumvent the policy of the rule by moving to dismiss rather than simply filing a notice of dismissal as the rule provides.

Slip op. at 3.

Thus, Judge Marshall held, in effect, that plaintiffs’ “motion” was a notice of dismis*642sal. I cannot say that he clearly erred in this conclusion.

Labels do not control the effect of filings with the court. United States v. 1982 Sanger 24’ Spectra Boat, 738 F.2d 1043, 1046 (9th Cir.1984) (treating “notice for rehearing and stay of execution, condemnation and forfeiture” as Rule 60 motion for relief from judgment); see also Fed.R.Civ.P. 8(c) (Improperly designated counter-claim to be treated as if properly designated); Fed.R.Civ.P. 8(f) (pleadings construed so as to do substantial justice). But for the label, plaintiffs’ “motion” had all the earmarks of a voluntary notice of dismissal. The defendant had not filed either an answer or a motion for summary judgment. Thus a voluntary notice of dismissal was clearly permitted. The defendants were not given notice of the motion. Thus, there was no opportunity for Judge Moran to consider whether to attach “terms and conditions” to the order as contemplated by Rule 41(a)(2). In sum, the district court was correct in concluding that the plaintiffs “achieved what a notice of dismissal would have accomplished.” In essence, this was the procedure they followed.

This conclusion is supported by what little case law exists on the issue of whether a particular filing is a notice of dismissal. In Gioia v. Blue Cross Hospital Services, 641 F.2d 540 (8th Cir.1981), the Eighth Circuit was presented with a similar situation. There, the plaintiff, having once dismissed its suit and refiled, filed a document entitled “Memorandum for Clerk” which stated:

Comes now the plaintiff ... and by leave of Court, dismisses its complaint ... without prejudice at plaintiff’s cost.

The judge in the case wrote “So ordered” on the side of the memorandum, and a copy of it was mailed to the defendant, who had earlier been notified by letter of the plaintiff’s intention to dismiss the suit in order to bring a new suit with additional parties.

When the defendant invoked the two dismissal rule in the subsequent suit, the district court found that the second dismissal was not by order of the court, but rather by notice. The district court supported its decision by noting that there had been no answer or motion for summary judgment, that the defendants were given no opportunity to oppose the dismissal, and that the defendants had been put to considerable time and expense — one of the reasons Rule 41(a)(1) was adopted. 641 F.2d at 543. Under these circumstances, the Eighth Circuit held that:

All in all, we cannot fault the logic of [the district judge] who found that the dismissal was not by court order____ The plaintiff proceeded in a manner which would lead one to believe that the dismissal was voluntary and unilateral— no proper motion, no notice, no hearing, no waiting for five days before presenting the matter to the judge in accord with the local rules, and no formal order. And, finally, no indication that they believed the court had any discretion in the matter since their third suit was filed before they ever “applied” for dismissal of the second.

641 F.2d at 544 (emphasis in original).

In another context, the Fifth Circuit has held that the fact that a particular filing is labeled a “motion” rather than a notice is a “distinction without a difference.” Williams v. Ezell, 531 F.2d 1261 (5th Cir.1976). In that case, the district court had denied a plaintiffs’ “motion” for voluntary dismissal without prejudice and entered an order which would have dismissed the matter with prejudice unless the plaintiffs paid the defendant’s attorney’s fees, although there had not been a prior dismissal of the action. The Fifth Circuit reversed, holding that, because the “motion” was in reality a notice, the district court had no discretion to deny it or to attach conditions to the dismissal. 531 F.2d at 1264.

While this case is not factually identical to those cited above, it is sufficiently similar that I would find the reasoning of the Fifth and Eighth Circuits persuasive here. Of particular significance are the lack of notice to Abacus and the perfunctory consideration that Judge Moran was expected to and did give the motion. As in Gioia, plaintiffs’ behavior in this case did not indicate that they believed Judge Moran had *643any discretion at all with regard to their purported “motion.” Thus, I believe there was no error in treating the “motion” as what it was for all practical purposes a notice which triggered the two dismissal rule.

Contrary to the majority’s suggestion, I do not believe either the Eighth Circuit or the Fifth Circuit was crafting a judicial version of Rule 41 to fill in the gap left by the rule itself. Assuming such power to even exist at all (which I doubt), I agree with the majority that it ought to be used sparingly. However, only by blithely assuming that, because the label on the piece of paper plaintiffs filed read “motion”, it must be one, does the majority even raise the spectre of such unrestrained judicial power. What the district judge did was to examine the factual situation before him and determine from long years of practical experience at the trial level whether the facts fit one or the other subdivision of Rule 41. True, it applied a “substance over form” analysis, but as indicated above, I believe this was entirely proper.

While I find the issue regarding the purported “stipulation” or “waiver” more difficult, I believe that the district court’s finding on this issue was one of fact, which we should not disturb on appeal unless we find that it is “clearly erroneous.” See Fed.R.Civ.P. 52(a).

Unlike the majority, I am unable to so conclude. Plaintiffs, as the parties asserting waiver, had the burden of proving it. Garvy v. Blatchford Calf Meal Co., 119 F.2d 973 (7th Cir.1941). But the portion of the transcript which was relied upon by Sutton Place to establish waiver, and which was reviewed by the district court, was ambiguous. As the district court noted, during the bankruptcy hearing there had been references to at least five pending lawsuits. Neither of the parties mentioned the two dismissal rule, and so far as the record shows, neither was aware of either the rule or its application at the time of the hearing before the bankruptcy judge. A waiver is a voluntary relinquishment of a known right. Pastrana v. Federal Mogul Corp., 683 F.2d 236 (7th Cir.1982); Universal Gas Co. v. Central Illinois Public Service Co., 102 F.2d 164 (7th Cir.1939). As the district judge found, any waiver of the two dismissal rule is “far from clear” on this record.

While I might, were we deciding the matter in the first instance, conclude that the oral agreement that dismissal of the Moran case be “without prejudice” to refiling the claims therein in another lawsuit was meant to be a waiver of the two dismissal rule, I do not believe we can say that the contrary finding of the district court was “clearly erroneous.”

Where fact-bound issues relating to the meaning of filings in the district court are concerned, we ought to be particularly careful of second-guessing an experienced trial judge who must decide such questions daily. Because I believe the majority has, to right a perceived inequity, abandoned the ordinarily deferential standard of review we apply to this type of case, I dissent.