• Taking a Voluntary Dismissal: Some Pitfalls

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    The “savings” provision of North Carolina Rule of Civil Procedure 41(a) can be a lifeline for a plaintiff who, for one reason or another, can’t proceed with its case the first time around. Rule 41(a)(1) allows a plaintiff to voluntarily dismiss its case without prejudice by giving notice of dismissal any time before it rests its case. Plaintiff may file the action again within one year, and the statute of limitations on its claim is extended for that refiling period. Rule 41(a)(1); North Carolina RR Co. v. Ferguson Build. Supp., Inc., 103 N.C. App. 768, 772–73 (1991). As generous as the savings provision is, it can be a tricky business. If done improperly or at the wrong time, a dismissal could doom a case rather than save it. Before giving notice of voluntary dismissal, heed the following reminders:

    The “two-dismissal” rule.  If a party has voluntarily dismissed once, it may file the case again within the refiling period. If a party has voluntarily dismissed twice—in any state or federal court—a third filing is subject to dismissal. A second voluntary dismissal is an adjudication on the merits of any “action based on or including the same claim.” This restriction applies only to two prior notices of dismissal, and not if one or more of the dismissals was by stipulation or court order. Rule 41(a)(1); Estate of Livesay v. Livesay, 219 N.C. App. 183, 776–77 (2012). Bear in mind that the phrase “action based on or including the same claim” likely includes claims against an entity based on acts of its employees or agents, if an action against the employees or agents themselves is precluded by the two-dismissal rule. E.g., Wrenn v. Maria Parham Hosp., Inc., 135 N.C. App. 672, 680–81 (1999).

    “Rests his case” includes summary judgment!  If plaintiff has rested its case before its notice of dismissal, the dismissal is deemed with prejudice “entitling [defendant] to a judgment as a matter of law” in a later-filed action based on the claim. Pardue v. Darnell, 148 N.C. App. 152, 157 (2001). If plaintiff has already rested, a voluntary dismissal without prejudice must be by stipulation or court order. Rule 41(a)(1)(ii); 41(a)(2); Pardue, 148 N.C. App. at 155. The most obvious interpretation of “rests his case” is resting the case at trial. Our courts, however, have also applied the phrase to summary judgment, holding that that a party may not dismiss after its summary judgment argument before the court rules on the motion. Troy v. Tucker, 126 N.C. App. 213, 215 (1997); Maurice v. Hatterasman Motel Corp., 38 N.C. App. 588, 591–92 (1978). To have “rested” at summary judgment, plaintiff must have had an opportunity to introduce evidence at the hearing and to argue its position, and then must have submitted the matter to the court for determination. Alston v. Duke Univ., 133 N.C. App. 57, 61–62 (1999) (plaintiff did not rest where attorney made clear she did not intend to argue before dismissing); Wesley v. Bland, 92 N.C. App. 513, 514–15 (1988) (plaintiff did not rest where attorney took dismissal in lieu of arguing). Although the law is not well-developed, it seems a party has not “rested” by arguing a dispositive motion relating to something other than the “case-in-chief.” See, e.g., Schnitzlein v. Hardee’s Food Sys, Inc., 134 N.C. App. 153, 156–57 (1999) (no resting for arguing motion to dismiss based on ERISA pre-emption); Lowe v. Bryant, 55 N.C. App. 608, 611 (1982) (no resting for arguing motion to dismiss for failure to pay bond).

    No dismissal if opposing party seeks affirmative relief.  A plaintiff may not take a voluntary dismissal without prejudice if the defendant has stated a claim for affirmative relief arising out of the same transaction or occurrence. McCarley v. McCarley, 289 N.C. 109, 113 (1976); see also Layell v. Baker, 46 N.C. App. 1, 6 (1980) (defendant’s negligence counterclaim prevented dismissal of negligence action); Maurice, 38 N.C. App. at 592 (dismissal of quiet title action prohibited due to counterclaim alleging sole ownership). If defendant has requested such relief, defendant’s consent is required for plaintiff’s voluntary dismissal. McCarley, 289 N.C. at 111–12. If, however, defendant’s counterclaim is factually independent, plaintiff may proceed with voluntary dismissal. Id. at 112. Affirmative relief is “relief for which defendant might maintain an action independently of plaintiff’s claim and on which he might proceed to recovery, although plaintiff abandoned his cause of action or failed to establish it.” Williams v. Poland, 154 N.C. App. 709, 712 (2002) (motion to dismiss not a request for “affirmative relief”); Kohn v. Mug-a-Bug, 94 N.C. App. 594, 596 (1989) (motions for attorney fees and summary judgment not requests for affirmative relief); Travelers Ins. Co. v. Ryder Truck Rental, Inc., 34 N.C. App. 379, 381 (1977) (indemnification claim contingent on plaintiff’s recovery not a request for affirmative relief).

    Faulty filing of first action.  An action must be properly “commenced” prior to voluntary dismissal in order for Rule 41(a) to extend the limitations period. See, e.g., Sweet v. Boggs, 134 N.C. App. 173, 175 (1999) (complaint not commenced where plaintiff issued summons to personal representative but never alleged claim against him); Collins v. Edwards, 54 N.C. App. 180, 182–83 (1981) (failure to have summons issued under Rule 3(a)(1) prior to voluntary dismissal). In a medical malpractice action, if the Rule 9(j) certification is not made prior to expiration of the limitations period, the claim has not been timely commenced, and a voluntary dismissal under Rule 41(a) will not extend the statute of limitations. Bass v. Durham Cty Hosp. Corp., 358 N.C. 144, 144 (2004); McKoy v. Beasley, 213 N.C. App. 258, 262–64 (2011). The Court of Appeals has also declined to apply the savings provision where an action was filed and immediately dismissed purely to extend the statute of limitations and thus violated Rule 11(a). Estrada v. Burnham, 316 N.C. 318, 325–26 (1986).

    Faulty service of first action.  Plaintiff cannot invoke Rule 41(a)(1)’s limitations extension in a later-filed action if failure to timely serve the complaint caused the first action to be discontinued after the statute of limitations expired. Lawrence v. Sullivan, 192 N.C. App. 608, 622–23 (2008); Camara v. Gbarbera, 191 N.C. App. 394, 396–97 (2008); Johnson v. City of Raleigh, 98 N.C. App. 147, 150 (1990); Hall v. Lassiter, 44 N.C. App. 23, 26–27 (1979).

    Only extends statute of limitations on “action based on the same claim.”  After voluntary dismissal under 41(a), the one-year savings provision will only extend the limitations period on a “new action based on the same claim.” New and independent claims or claims against distinct defendants do not relate back to the date of the first filing, even if they arise from the same events. See, e.g., Williams v. Lynch, 741 S.E.2d 343, 376–77 (N.C. App. 2013) (breach of contract and conversion claims did not relate back to action for negligence); Staley v. Lingerfelt, 134 N.C. App. 294, 299–300 (1999) (assault and battery, false arrest, and trespass claims did not relate back); Stanford v. Owens, 76 N.C. App. 284, 289 (1985) (fraud claim did not relate back to negligence action); Cherokee Ins. Co. v. R/I, Inc., 97 N.C. App. 295, 296–97 (1990) (claim against separate corporation did not relate back despite sharing officers and address with first defendant).

    Federal court.  Things can get complicated if a case is going back and forth between North Carolina and federal courts. Federal Rule of Civil Procedure 41 does not provide the same limitations extension as North Carolina’s rule. Renegar v. R.J. Reynolds Tobacco Co., 145 N.C. App. 78, 81 (2001). Whether a plaintiff dismissing its state law claims from federal court may take advantage of North Carolina’s rule “is governed by how the federal court gained jurisdiction over the state issues.” Harter v. Vernon, 139 N.C. App. 85, 92 (2000). In general, when a plaintiff dismisses a case in which the federal court sits in diversity, the plaintiff can invoke the savings provision when refiling in state or federal court. Bockweg v. Anderson, 328 N.C. 436, 441–42 (1991); Renegar, 145 N.C. App. at 80; Harter, 139 N.C. App. at 93–94. Similarly, when a plaintiff first brings an action in state court, then dismisses and refiles in federal court under diversity, the statute of limitations on the state law claims is extended by the North Carolina rule. Strawbridge v. Sugar Mtn Resort, Inc., 243 F.Supp.2d 472, 477 (W.D.N.C. 2003); Porter v. Groat, 713 F.Supp. 893, 896–97 (M.D.N.C. 1989). By contrast, when the federal court has federal question jurisdiction and is exercising supplemental jurisdiction over the state law claims, North Carolina’s rule does not apply to extend the limitations on the state law claims (beyond the 30 days provided by federal law). Harter, 139 N.C. App. at 93–94; Renegar, 145 N.C. App. at 83. However, for actions where the federal question involves 42 U.S.C. § 1983, the North Carolina rule may apply. See, e.g., Leardini v. Charlotte-Mecklenburg Board of Educ., 2011 WL 1234743 (not reported in F.Supp.) (W.D.N.C. 2011). Advice of counsel well-versed in federal jurisdiction is strongly recommended when considering dismissal of state law claims from federal court.

    This post discusses some of the main points to remember when taking a voluntary dismissal under Rule 41(a)(1). Every case should, of course, be evaluated on its own facts, and, if possible, in consultation with experienced litigation counsel.

    Ann Anderson is an associate professor with the UNC School of Government and specializes in civil procedure, civil practice, and judicial authority.

    14 thoughts on “Taking a Voluntary Dismissal: Some Pitfalls”

    • Pete Hoffman says:

      If suit is filed against two defendants and dismissal is taken as to one defendant, is it true that a dismissal of the case against the second defendant is with prejudice?

    • James Day says:

      My civil case has been dismissed twice, once in small claims and once in circuit court. Does this allow my case to be dismissed with prejudice if filed a third time since they are two jurisdiction?

    • Michelle says:

      I received notice of voluntary dismissal regarding equitable distribution. What do I need to do now as the defendant?

    • Eric King says:

      I have a question as to the application of the “two dismissal rule” (Rule 41) to the following situation:

      Property owner (“Debtor”) obtains a refinance loan from bank (“Lender”) in 2012 and gives a first lien deed of trust to Trustee to secure the loan for Lender’s benefit.
      In 2015, Debtor falls behind in the loan payments and Trustee, at Lender’s request, commences a special proceeding foreclosure (at Case No. 15-SP-xxx) under the deed of trust power of sale. The Clerk enters an order permitting the sale to proceed. Before the scheduled sale takes place, Debtor brings the loan current (to Lender’s satisfaction) and Lender has the Trustee voluntarily dismiss the case.
      In 2016, Debtor again falls behind in the loan payments and Trustee, at Lender’s request, commences a second special proceeding foreclosure (at Case No. 16-SP-xxx) under the deed of trust power of sale. The Clerk enters an order permitting the sale to proceed. Before the scheduled sale takes place, Debtor once again brings the loan current (to Lender’s satisfaction) and Lender has the Trustee voluntarily dismiss the case a second time.
      Not surprisingly, Debtor has also not been paying his homeowner association (“HOA”) dues and, in 2017, the HOA files its lien and commences a special proceeding to sell the property to foreclose on its lien. The Clerk enters an order permitting the HOA’s foreclosure sale to proceed. The sale is conducted and a third party (“Purchaser”) is the high bidder after expiration of the upset period. Purchaser pays the bid price and receives a deed for the property from the HOA’s trustee.
      Debtor stops making loan payments to the Lender, and the Lender commences a third special proceeding under the deed of trust to foreclose its lien on the property (now owned by the Purchaser”) for the balance due on the loan.
      Would the Lender’s Trustee be permitted to sell the property under the deed of trust power of sale in the third special proceeding, or would it be precluded from doing so by the “two dismissal rule”? And would the property be released from the lien of the deed of trust, or would it continue in effect?
      Thank you for any guidance you might provide in this regard.

    • Mary says:

      I began my case Pro Se. After exhausting my administrative remedies with EEOC, I timely filed my Discrination lawsuit on 9/15/2016. I filed my First Amended Complaint (FAC) within 21 days as a matter of course. Defendants filed a Motion To Dismiss (MTD). In April 2016 I retained an attorney. A few weeks later the Judge denied the MTD without prejudice and issued an Order with instructions on filing a Second Amended Complaint (SAC) stating that now that Plaintiff has an Attorney, he expected the defencies in the FAC to be corrected in the SAC. The attorney botched my case by not following one single instruction/order the Judge issued. He basically changed the headings and counts but turn in my same work from the FACk. He did not state I exhausted my administrative remedies or attach my Right To Sue Notices or submit not one single document with the SAC. In addition he omitted two pages of pertinent facts. Of course, the defendants are loving this and filed another MTD. After i kept pressuring the Attorney to correct this, he has now requested Leave To Amend and file a TAC. DEFENDANTS have filed opposition to TAC. The attorney did not let me proof the TAC prior to filing it and it to is riddled with errors and defencies. I terminated the attorney and requested he withdraw. He filed that incorrectly and Judge denied withdrawl. The Judge has given me until 9/11 to file a response to Defendants opposition to TAC. I just ran across Rule 41(a) Voluntary Dismissal. It sounds appealing and a good option given that none of the four Defendants have not filed an Answer or Motion For Summary Judgement. What are your thoughts and what would the Statute of Limitations be if I choose this option. This is in Federal Court Georgia Northern District. Thanks

      • Ms. J says:


        Keep all your Court documents, your job duties, position, co-worker names, positions, race, But most of all keep PRAYING. I am pro se on a Legal Malpractice case, the underlying case was a Personal Injury Case believe me I understand what you are going through with the attorney. We have put our trust in them and it failed, But I am here to tell you GOD is the answer I am a living witness. Trust God and he will bring you through this. The law is not for the righteous but with God you will prevail. Sally Yates is a good attorney we need more like her. May God keep and bless you.

    • Claudette Albright says:

      If I file for a voluntary dismissal without prejudice what are the cost?

    • Caroline J.Adams-Mosley says:

      I am a disabled widow receiving SSI since 1991, got married to an older man (Veteran of 31 yrs) who past away in the yr 2000. My SSI was stopped after he died (6 months later) April 1st 2001 because I started getting DIC Benefits from veterans ($993.00), wasn’t enough to live on. I was 42 years old at that time, but kept trying to get my benefits started back because I went under extreme hardship. I lost my home, and went homeless, so I started sleeping in my car or where ever I could. The SSA in Fla. told me that they knew I was disabled but I made to much money and to come back when I turn 50 to get my husbands benefits. 11/12/08 I turned 50 yrs old, so I called the 1 (800) number and applied over the phone, I was approved and received a letter from the person who got me approved telling me to go to Social Security to get it set up, but when I went to the local SSA office to get set up for my benefits no one would see me that day or later make me an appt. to come back. I call the !-(800) no# back and they told me that I was wiped out of the system and I needed to do a reconsideration, so I did. I then moved to Camilla GA. and got a letter to come to Albany SSA office to get set up for my benefits, I did and started receiving my own disability benefits since 10/01/09, I moved to Atlanta GA and I kept fighting for my husbands social security. I am now 59 yrs old and was told by the SSA in 11/08/17 that a Civil Claim was filed by and attorney that I went to for help back in 11/21/13 being dismissed with prejudice 7/01/14 by the plaintiff (me) all done without my knowledge. What do I do (Help!!!)

    • Caroline J.Adams-Mosley says:

      I just found out by the Social Security Administration 0n 11/08/2017 that a Civil Action Claim was filed without my knowledge and dismissed with prejudice without my knowledge on (07/01/2014, and ( I knew nothing of this claim) by an Attorney that I supposedly hired back in November of 2013 barring me from getting Disabled Widows Benefits ( my husbands benefits ) what to I do??
      there is a lot more to this, but needs extreme attention.

    • Robert G Elam says:

      Plaintiff want to volunteer dismiss our separation agreement. Can he do this in Illinois?

    • sharyllcunningham@gmail.com says:

      Will someone please help me I am POOR and on SSI. I have a disability that hurts me when it comes to defending my rights. The Courts have walked all over me and my cases and my rights. What can or should I do if no one is willing to help me but I stand firm on my rights as a citizen of the United States? not ever Legal Aid will help because they just do not want to. I have been yelled at in court to the point of crying because no one sees whats going on that will go against the court system or their jobs. I live in Portage County Ohio which is a very bad prejudice county and no attorney is willing to go against the “GOOD O BOY” system. HELP PLEASE or please give me other avenues to explore.

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