Opinion ID: 616375
Heading Depth: 2
Heading Rank: 2

Heading: The Stipulation of Dismissal

Text: Having established our appellate jurisdiction, the next question is whether the district court erred in interpreting the stipulation of dismissal. De Leon argues that the stipulation was self-executing as a stipulation under Fed.R.Civ.P. 41(a)(1)(A)(i) or (ii). In the alternative, he argues that if a court order was required under Fed.R.Civ.P. 41(a)(2), the district court abused its discretion in failing to approve the stipulation.
De Leon's arguments call for evaluation of the district court's interpretation of the stipulation. We have found no Tenth Circuit law directly on point regarding what standard of review applies in this circumstance. But guidance can be drawn from United States v. Garcia-Zambrano, 530 F.3d 1249 (10th Cir.2008). In that case, lacking any precedent directly addressing the standard of review applicable to a district court's interpretation of an affidavit, we applied the standards of review applicable to a district court's interpretation of a written contract, noting that this court is in as good a position as the trial court to interpret a written document. Id. at 1256 (internal quotation marks omitted). We explained that our level of review is based on whether the district court uses extrinsic evidence. Id. [W]hen the trial court resorts to extrinsic testimony to ascertain the meaning of the contractual terms, the interpretation is factual, and therefore we will reject the court's interpretation only if clearly erroneous. Id. But if the court bases its interpretation solely on the court's reading of the written words in the affidavit, the interpretation is a matter of law, and de novo review applies. See id. The district court appears to have based its interpretation of the stipulation solely on its reading of the written words of the stipulation. Again, the court stated in its text-only order that having reviewed [the] stipulation, the Court notes that it is conditional in nature, anticipating that the parties would file a motion to dismiss within 10 days of August 13, 2010. No such motion was filed, and thus, the Court assumes that the parties have rescinded the settlement agreement as set forth in the Stipulation. ECF No. 90. Therefore, under Garcia-Zambrano, we review the district court's interpretation of the stipulation de novo.
Under Rule 41(a)(1)(A)(i), a plaintiff can voluntarily dismiss a case by filing ... a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment. Under Rule 41(a)(1)(A)(ii), a plaintiff can voluntarily dismiss a case by filing ... a stipulation of dismissal signed by all parties who have appeared. A stipulation of dismissal filed under Rule 41(a)(1)(A)(i) or (ii) is self-executing and immediately strips the district court of jurisdiction over the merits. See Janssen v. Harris, 321 F.3d 998, 1000 (10th Cir.2003) (stating that under Rule 41(a)(1)(A)(i), a voluntary dismissal is self-executing, i.e., it is effective at the moment the notice is filed with the clerk and no judicial approval is required) (internal quotation marks omitted); Smith v. Phillips, 881 F.2d 902, 904 (10th Cir.1989) (stating that a Rule 41(a)(1)(A)(ii) stipulation cannot be conditioned by the court, and does not call for the exercise of any discretion on the part of the court. Once the stipulation is filed, the action on the merits is at an end.) (footnote omitted) (citations omitted). [7] Here, Denman was the only defendant to appear, and it filed a motion to dismiss, not an answer or a motion for summary judgment. Thus, De Leon could have dismissed the case unilaterally under Rule 41(a)(1)(A)(i). But this portion of Rule 41 contemplates a notice of dismissal filed by the plaintiff alone. Here, both parties signed a document styled as a stipulation of dismissal. Thus, we do not construe the stipulation as a Rule 41(a)(1)(A)(i) notice of dismissal. Consequently, we see no error in the district court's failure to treat it as such. As to Rule 41(a)(1)(A)(ii), both De Leon and Denman signed the stipulation, as required by that portion of Rule 41(a)(1)(A). Unfortunately, two ambiguities are raised by the stipulation of dismissal. First, it invokes Rule 41(a)(2), but that rule contemplates a motion to dismiss filed by the plaintiff in situations other than those set out in Rule 41(a)(1), not a jointly signed stipulation. Under Rule 41(a)(2), the parties must obtain a court order: (2) By Court Order; Effect. Except as provided in Rule 41(a)(1), an action may be dismissed at the plaintiff's request only by court order, on terms that the court considers proper. If a defendant has pleaded a counterclaim before being served with the plaintiff's motion to dismiss, the action may be dismissed over the defendant's objection only if the counterclaim can remain pending for independent adjudication. Unless the order states otherwise, a dismissal under this paragraph (2) is without prejudice. Fed.R.Civ.P. 41(a)(2) (emphasis added). As discussed above, the procedural posture of the case was such that the parties could have invoked the exception to Rule 41(a)(2), i.e., Rule 41(a)(1), and the stipulation was not styled as plaintiff's motion. The second ambiguity is that the stipulation provides a space for the district judge's signature but does not expressly ask the district court to approve the dismissal; in other words, it is not a motion to dismiss as contemplated by Rule 41(a)(2). Despite these ambiguities, it appears that neither of them affected the district court's interpretation of the stipulation. Instead, the court read the stipulation as conditioned on the filing of a motion to dismiss and assumed that the parties had rescinded the Agreement. Again, the first relevant whereas clause of the Agreement provides: WHEREAS the Agreement requires Plaintiff, within 10 business days of August 13, 2010, to move this Court for an Order dismissing without prejudice the above-captioned action as to Defendant Denman and providing that the dismissal shall become with prejudice on the `Effective Date (as defined in the Agreement).' ECF No. 88 at 1. Because this information is contained in a whereas clause, we view the stipulation itself as the motion referred to in that clause. The district court's conclusion that a separate motion was required was therefore incorrect. Read as a whole, the stipulation must mean the parties intended to stipulate to a Rule 41(a)(1)(A)(ii) dismissal even though they cited, apparently in error, to Rule 41(a)(2). Further, there is no reason to assume the parties rescinded the Agreement. The second relevant whereas clause stated that De Leon  may withdraw the dismissal if the Settlement is rescinded. ECF No. 88 at 1 (emphasis added). Thus, even if the parties rescinded the Agreement, De Leon was not required to withdraw the dismissal. Since it is clear that the Agreement was not rescinded and that no further motion was necessary, the district court should have treated the stipulation as a self-executing dismissal under Rule 41(a)(1)(A)(ii). Accordingly, the district court's order granting Denman's motion to dismiss on the merits is void because it was issued after the stipulation was filed and therefore in the absence of jurisdiction. See Smith, 881 F.2d at 904 (explaining that [o]nce the stipulation is filed, the action on the merits is at an end).