T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on and i s notpr e c e de nt * e xc e pta s pr ovi de d by 9th C i r . R . 36- 3. NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS FOR T HE NI NTH CI RC UI T D I A M O N D STA TE I N SU RA N CE C O M P A N Y , an I ndi a nac orpor a t i on, P la in tif

f - A p p e lla n t, v. G E N E S IS IN S U R A N C E C O M P A N Y ; et a l., D efen d an t s - A p p el l ees. N o. 09- 16733 D. C . No . 3 : 0 8 - c v - 0 0 2 9 6 - L R HG WF ME MOR AN DU M *

A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt

f orthe D i s tr i c tof

N e va da L a rry R . H i c ks , D i s tr i c tJ udge , P r e s i di ng A r gue d a nd S ubm i tt e d M a y 10, 2010 S a n F r a n c is c o , C a lif

o rn ia B efo re: R E IN H A R D T , W . F L E T C H E R an d N . R . S M IT H , C i rcu i tJu d g es. D i am on d S t at e I nsurance Co m pany appeal s the di stri ctcourt ’ s di sm i ss al w i th pr e j udi c e of i t s de c l a r a t ory j udgm e nta c t i on a ga i ns tW a s hoe C ounty S c hool D is tr ic t a n d G e n e s is I n s u r a n c e C o m p a n y . W e a f f irm . 

# FI LED MA Y19 2 010 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALSP age 2 of 3

D ia m o n d S ta te f

ir s t a r g u e s th a t th e d is tr ic t c o u rt d id n o t h a v e th e au th o r ity to c o n v e rt its m o tio n to d is m is s w ith o u t p r e ju d ic e in to am o tio n to d is m is s w ith prej ud i ce . W e di sa gree . R ul e 41(a)( 2) of the F eder al R ul es of C i vi l P roce du re st at es that : “ an ac t i on m aybe di sm i ss ed atthe pl ai nt i ff’ s r equeston l y by c ou rt order, on t erm s thatthe courtconsi ders prop er . ” T he ph ra se “ t erm s thatthe court c ons i de r s pr ope r ” pr ovi de s di s tr i c tc ourt s the di s c r e t i on t o di s m i s s w i th orw i thout p r e ju d ic e . See H

argis v . Foster , 3 1 2 F .3 d 4 0 4 , 4 1 2 ( 9 th C ir . 2 0 0 2 ) ( “R u le 4 1 v e s ts the di stri ctcourtw i th d i sc re t i on t o d i sm i ss an ac t i on atthe pl ai nt i ff ' s i nst ance

‘ upon s uc h t e rm s a nd c ondi t i ons a s the c ourtde e m s pr ope r . ’ T ha tbr oa d gr a ntof di sc re t i on do es no tcont ai n a pref er ence for one ki nd of di sm i ss al or another. ”) . D ia m o n d S ta te n e x t a r g u e s th a t, e v e n if th e d is tr ic t c o u rt h a d th e au th o r ity to d is m is s w ith p r e

ju d ic e , it e rr e d b y d is m is s in g th is c a s e w ith p r e ju d ic e . W e di s a gr e e . “ W e r e vi e w adi s tr i c tc ourt ’ s de t e rm i na t i on of the t e rm s a nd c ondi t i ons of di sm i ss al un der R ul e 41(a)( 2) for an abu se of di sc re t i on . ” I d. ( c ita tio n o m itte d ) . I n W es t lan ds W

at erD istri ct

v. U ni ted Stat es , 1 0 0 F . 3 d 9 4 , 9 6 ( 9 th C i r . 1 9 9 6 ) , we st at ed, “ [w ] hen rul i ng on a m ot i on t o d i sm i ss w i tho utprej ud i ce , the di stri ctcourt m u std et erm i n e w h eth er th e d efen d an tw i l l su ffer so m e p l ai n l eg al p rej u d i ce as a r e s u lt o f th e d is m is s a l.” H e r e , th e d is tr ic t c o u rt f o u n d th a t th e r e w o u ld b e p la in l e ga l pr e j udi c e t o G e ne s i s w e r e i tt o di s m i s s the c a s e w i thoutpr e j udi c e i ns t e a d ofP age 3 of 3

w i th pr e j udi c e . T he di s tr i c tc ourtnot e d tha tthe s e tt l e m e nta gr e e m e ntr e l e a s e d a ny a n d a ll c la im s b ya n y o f th e p a rtie s f

o ra n y th in g a r is in g o u t o f th e u n d e r ly in g s u it. T h u s , d is m is s in g w ith o u t p r e ju d ic e w o u ld e s s e n tia lly a llo w D ia m o n d S ta te to

“ r e voke i t s pr om i s e . ” T he r e f or e , “ [ t ] o pr ot e c t[ G e ne s i s ’ s ] i nt e r e s ti n e nt e r i ng a nd u p h o l d i n g th e sett l em en tag reem en t , ” th e co u rtd en i ed th e m o t i o n t o d i sm i ss w i tho utprej ud i ce and i nst ea d d i sm i ss ed w i th p re j ud i ce . A ny po ss i bl e l egal prej ud i ce t o D i am on d S t at e a s are sul tof a di sm i ss al w i th p re j ud i ce w as o u tw e i g h e d b y th e p o s s i b l e l e g a l p r e j u d i c e t o G e n e s i s th a tc o u l d r e s u l tf r o m a di sm i ss al w i tho utprej ud i ce . M oreover, the se tt l em entagre em entst at ed on l y that D i am on d S t at e w ou l d “ di sm i ss ” the ca se ; i tdi d n oti nd i ca t e w hether thatdi sm i ss al w oul d be w i th orw i thoutpr e j udi c e . T hus , the di s tr i c tc ourt ’ s or de rdi d not c o n tr a d ic t th e p la in la n g u a g e o f th e s e ttle m e n t a g r e e m e n t. T h e d is tr ic t c o u rt d id n o tab u s e i t s d i s c r e t i o n , a n d w e a f f i rm. AF F I RME D.