*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this opinion should not be published and is not precedent except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.

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.
2

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
4

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. 
5

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
6

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.