Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-01652/USCOURTS-azd-2_12-cv-01652-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Petition to Quiet Title

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Michael J. Pence; Tauni R. Pence,

Plaintiffs, 

v. 

GMAC Mortgage LLC, 

Defendant.

No. CV-12-1652-PHX-GMS

ORDER 

 Pending before the Court are Defendant’s Motion for Summary Judgment (Doc. 

29) and Plaintiffs’ Motion to Dismiss (Doc. 31). Also before the Court is Defendant 

GMAC Mortgage, LLC’s Motion to Strike Affidavit. (Doc. 24.) For the reasons 

explained below, Plaintiffs’ Motion to Dismiss (Doc. 31) will be granted if Plaintiff 

agrees to pay Defendant’s costs. 

BACKGROUND 

 Plaintiffs Michael and Tauni Pence are living in a home in New River, Arizona. 

The Pences borrowed $485,000 against their home on January 16, 2007, and have not 

made any payments on this mortgage since September 2010. The Pences owe at least 

$635,382.25 in past due principal on the loan, which they have not repaid or offered to 

pay. 

 The Pences filed this quiet title action in Arizona state court on July 10, 2012 

(Doc. 1-1) and GMAC removed to this Court (Doc. 1). On October 4, 2013, GMAC 

moved for summary judgment. (Doc. 29.) The Pences responded to that motion on 

October 10 (Doc. 30), but then moved to dismiss the next day (Doc. 31). 

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 On October 31, 2013, the Pences filed another lawsuit in Arizona state court, this 

time naming Ocwen in the place of GMAC. The state court has placed that matter on its 

inactive calendar pending resolution of this action. 

DISCUSSION

I. Motion to Dismiss 

 The Pences move for the voluntary dismissal of this action. (Doc. 31.) The 

dismissal of actions is governed by Federal Rule of Civil Procedure 41. When the request 

for dismissal is not stipulated to by both parties and comes from the plaintiff after an 

answer has been filed, “an action may be dismissed at the plaintiff’s request only by court 

order, on terms that the court considers proper.” Fed. R. Civ. P. 41(a). A court should 

grant a motion for voluntary dismissal under Rule 41(a)(2) unless a defendant can show 

that it will suffer some plain legal prejudice as a result. Waller v. Fin. Corp. of Am., 828 

F.2d 579, 583 (9th Cir. 1987); see also Hamilton v. Firestone Tire & Rubber Co., 679 

F.2d 143, 145–46 (9th Cir. 1982). 

 “Legal prejudice” means “prejudice to some legal interest, some legal claim, some 

legal argument.” Westlands Water Dist. v. United States, 100 F.3d 94, 97 (9th Cir. 1996). 

“Uncertainty because a dispute remains unresolved” or because “the threat of future 

litigation . . . causes uncertainty” does not result in plain legal prejudice. Id. at 96–97. 

“Also, plain legal prejudice does not result merely because the defendant will be 

inconvenienced by having to defend in another forum or where a plaintiff would gain a 

tactical advantage by that dismissal.” Smith v. Lenches, 263 F.3d 972, 976 (9th Cir. 2001) 

(citing Hamilton, 679 F.2d at 145). Defendant cites to other factors that have been 

considered by other courts, Hubbard v. United States, 545 F. Supp. 2d 1, 7 (D.D.C. 

2008), but those factors are inconsistent with the Ninth Circuit’s rejection of broader 

definitions of legal prejudice from other circuits. Westlands Water Dist., 100 F.3d at 96–

97. “Although case law does not articulate a precise definition of ‘legal prejudice,’ the 

cases focus on the rights and defenses available to a defendant in future litigation.” Id. at 

97. 

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 Here, the legal rights of the parties and the defenses available to GMAC in future 

litigation will not be affected by a dismissal. A dismissal clearly leaves uncertainty and 

an unresolved dispute over the Pences’ claim. GMAC faces the threat of future litigation 

and its interests are already involved in the pending litigation in state court that has been 

suspended until this case is resolved. The Pences’ actions also give them a tactical 

advantage by allowing them to start over in state court when they are facing a Motion for 

Summary Judgment in this action. However, all of these harms have been explicitly 

excluded from the definition of plain legal prejudice in the Ninth Circuit. Therefore, the 

Motion is well taken. 

 Nevertheless, the decision to allow the motion to dismiss does not end the inquiry. 

In exercising its discretion under Rule 41(a)(2), “the court must make three separate 

determinations: (1) whether to allow the dismissal at all; (2) whether the dismissal should 

be with or without prejudice; and (3) what terms and conditions, if any, should be 

imposed.” Burnette v. Godshall, 828 F. Supp. 1439, 1443 (N.D. Cal. 1993), aff’d. sub 

nom Burnette v. Lockheed Missiles & Space Co., 72 F.3d 766 (9th Cir. 1995). The 

purpose of requiring a court order for such a dismissal is to prevent voluntary dismissals 

which unfairly affect the defendant and to permit the imposition of curative conditions. 

Hamilton, 679 F.2d at 146; Alamance Indus., Inc. v. Filene’s, 291 F.2d 142, 146 (1st Cir. 

1961). 

 The next question is whether the dismissal should be with or without prejudice. 

Rule 41(a)(2) of the Federal Rules of Civil Procedure states that: “an action may be 

dismissed at the plaintiff’s request only by court order, on terms that the court considers 

proper.” The phrase “terms that the court considers proper” provides district courts the 

discretion to dismiss with or without prejudice. See Hargis v. Foster, 312 F.3d 404, 412 

(9th Cir. 2002) (“That broad grant of discretion does not contain a preference for one 

kind of dismissal or another.”). Here, the dismissal will be without prejudice. 

 The final issue is what if any conditions are appropriate. In Rule 41(a) dismissals, 

the court may condition the voluntary dismissal upon the payment of both attorney’s fees 

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and costs. Westlands Water Dist., 100 F.3d at 97. Although that condition is not 

mandatory, the court in Westlands suggested that it might be an appropriate remedy to the 

expenses incurred by the defendants during the litigation that the plaintiff is now 

dismissing without resolution. Id. However, “if the district court decides it should 

condition dismissal on the payment of costs and attorney fees, the defendants should only 

be awarded attorney fees for work which cannot be used in any future litigation of these 

claims.” Id. Here, the Court will not condition this dismissal on the award of attorney’s 

fees, but it will require the payment of costs as a condition. A court granting a motion for 

dismissal with conditions must give the plaintiff “a reasonable period of time within 

which [either] to refuse the conditional voluntary dismissal by withdrawing [the] motion 

for dismissal or to accept the dismissal despite the imposition of conditions.” Beard v. 

Sheet Metal Workers Union, 908 F.2d 474, 476 (9th Cir. 1990). The Pences therefore 

may choose to accept the condition and pay GMAC’s costs or inform this Court that they 

will not. If the Pences accept the condition to pay costs, the case will be dismissed. If the 

Pences reject the condition, no dismissal will be granted and the Court will consider 

GMAC’s pending Motion for Summary Judgment. 

IT IS HEREBY ORDERED that GMAC shall file a Bill of Costs pursuant to 

Fed. R. Civ. P. 54 and LRCiv 54.1 within 7 days of the date of this order. 

IT IS FURTHER ORDERED that the Pences shall, within 14 days of GMAC’s 

filing, file with this Court and cause to be served upon GMAC a statement of whether 

they choose to accept the condition to pay the Bill of Costs or choose to withdraw their 

Motion to Dismiss. The Pences may also file any objections to any cost item pursuant to 

LRCiv 54.1. 

/ / / 

/ / / 

/ / / 

/ / / 

/ / / 

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IT IS FURTHER ORDERED that the Clerk of the Court shall take no action 

with respect to the pending motions or the taxation of costs until further order from this 

Court. 

 Dated this 11th day of March, 2014. 

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