379 P.3d 36
Utah Ct. App.2016Background
- Yknot Global (UK company) sued Stellia Limited (Malta) in three actions: a federal complaint (voluntarily dismissed), a Utah state complaint in Judge Stone’s court (voluntarily dismissed — the second dismissal), and Stellia’s later Utah suit in Judge Chon’s court (which sought declaratory relief under Rule 41’s two-dismissal rule).
- Yknot cured a perceived jurisdictional defect in the Judge Stone case by registering in Utah, then voluntarily dismissed that state action while settlement/arbitration negotiations were ongoing.
- After Stellia filed its Judge Chon complaint, Yknot (with new counsel) moved in the Judge Stone case to set aside the second voluntary dismissal under Utah R. Civ. P. 60(b)(3) and 60(b)(6), to compel arbitration, and to consolidate the cases.
- Judge Stone denied relief, reasoning Yknot’s claimed basis for relief was the sort of mistake or inadvertence covered by Rule 60(b)(1), so it could not rely on the residuary 60(b)(6) and, in any event, 60(b)(6) relief is narrowly applied.
- Yknot appealed the denial of the 60(b)(6) motion and the court’s refusal to allow withdrawal/striking of the voluntary dismissal; the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Yknot could obtain relief from its second voluntary dismissal under Rule 60(b)(6) | Yknot: dismissal should be set aside because refusing to do so prevents presentation of its counterclaims and is unfair given Stellia’s conduct | Stellia: Yknot’s asserted ground is essentially a mistake/inadvertence that falls under Rule 60(b)(1), so 60(b)(6) is unavailable; two-dismissal rule applies | Court: Motion implicated Rule 60(b)(1) (mistake); thus 60(b)(6) relief unavailable and denial affirmed |
| Whether district court abused discretion in denying 60(b)(6) relief | Yknot: denial equates to an outcome like a default, unfairly barring its claims | Stellia: 60(b)(6) is narrowly applied to exceptional circumstances, which are absent here | Court: No abuse of discretion; two-dismissal rule’s application is not an exceptional circumstance |
| Whether court should have allowed withdrawal/striking of Yknot’s voluntary dismissal | Yknot: unique circumstances (withdrawn motion to dismiss by Stellia, arbitration issues) justify permitting withdrawal | Stellia: Yknot invited any ruling and had no legal basis to withdraw; Rule 41 governed | Court: Argument inadequately briefed and constitutes invited error; refusal affirmed |
| Whether the two-dismissal rule bars Yknot’s later claims/counterclaims | Yknot: contends it faces an action without opportunity to present counterclaims unless dismissal set aside | Stellia: Rule 41’s two-dismissal provision treats second voluntary dismissal as adjudication on merits, barring subsequent assertion | Court: Rule 41 applies; second voluntary dismissal operates as adjudication on the merits |
Key Cases Cited
- Richins v. Delbert Chipman & Sons Co., 817 P.2d 382 (Utah Ct. App. 1991) (standard of review for characterization of Rule 60(b) motions)
- Laub v. South Central Utah Tel. Ass’n, 657 P.2d 1304 (Utah 1982) (Rule 60(b)(6) is a residuary clause to be used cautiously and only in unusual and exceptional circumstances)
- State v. McNeil, 365 P.3d 699 (Utah 2016) (clarification of the invited-error doctrine)