Weigand Construction Company Inc v. Wortman Brothers LLC
1:14-cv-00210
N.D. Ind.May 12, 2015Background
- Plaintiff Weigand Construction sued Wortman Brothers, LLC and Western Surety Company in the Northern District of Indiana.
- Wortman filed for bankruptcy on October 28, 2014, which triggered the automatic stay as to claims against Wortman.
- Weigand moved to voluntarily dismiss Wortman without prejudice so litigation can proceed against non-bankrupt co-defendant Western Surety.
- Western Surety does not oppose the motion; Wortman did not oppose and the response period has lapsed.
- Weigand also requested extensions of pretrial deadlines to permit continued litigation with Western Surety.
- The Magistrate Judge recommended granting dismissal without prejudice and setting new discovery and disclosure deadlines.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether voluntary dismissal of bankrupt defendant is barred by the automatic bankruptcy stay | Voluntary dismissal without prejudice is not an adjudication on the merits and therefore not prohibited by the automatic stay; dismissal will allow case to proceed against non-bankrupt co-defendant | (Wortman filed bankruptcy; no opposing brief was filed) | Granted: dismissal without prejudice allowed because voluntary dismissal is not an adjudication on the merits and the stay does not bar non-merits termination |
| Whether pretrial deadlines should be extended | Extension needed so case can continue against Western Surety after dismissal of Wortman | Western Surety does not oppose extension | Granted: Court imposed new discovery and disclosure dates (e.g., discovery deadline Nov. 3, 2015) |
Key Cases Cited
- Nora v. Residential Funding Co., LLC, [citation="543 F. App'x 601"] (7th Cir.) (automatic stay bars continuation against debtor but not non-merits termination)
- Brown v. City of Chicago, 771 F.3d 413 (7th Cir. 2014) (voluntary dismissal without prejudice is not res judicata)
- Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497 (2001) (Rule 41 distinguishes dismissals on the merits from dismissals without prejudice)
- Pitts v. Unarco Indus., Inc., 698 F.2d 313 (7th Cir. 1983) (Section 362 stay operates only against the debtor)