Business litigation attorneys are often confronted with the choice of dismissing a lawsuit with or without prejudice. In general a business lawyer knows that a dismissal ‘without prejudice’ allows you to refile a case as long as it is within the statute of limitations. And a complaint should not be dismissed ‘with prejudice’ unless you really are sure that there is no reason you will need to resurrect the case. However, what does a dismissal with prejudice really mean in a legal sense and what is the effect of it when a party files the same lawsuit again.
1. A Lawsuit Dismissed With Prejudice May Not Be Revived
Dismissal with prejudice used to be known as a retraxit. Here is an explanation from a California Court of Appeals case: “A retraxit has always been deemed a judgment on the merits against the plaintiff, estopping him from subsequently maintaining an action for the cause renounced. A retraxit is equivalent to a judgment on the merits and as such bars further litigation on the same subject matter between the parties. A dismissal with prejudice is the modern name for a common law retraxit. Dismissal with prejudice under section 581 ‘has the same effect as a common law retraxit and bars any future action on the same subject matter. Dismissal with prejudice is determinative of the issues in the action and precludes the dismissing party from litigating those issues again.” “The statutory term ‘with prejudice’ clearly means the plaintiff’s right of action is terminated and may not be revived.”
2. A Lawsuit Dismissed With Prejudice Constitutes A Final Judgment
“The bar raised by a dismissal with prejudice is equal, under the doctrine of res judicata, to the bar raised by a judgment on the merits.” Thus, a dismissal of a lawsuit with prejudice constitutes a final judgment invoking the bar of res judicata. “[A] dismissal with prejudice by plaintiff of its action is a bar to a subsequent action on the same cause; otherwise there would be no meaning to the ‘with prejudice’ feature. ‘A dismissal with prejudice terminates the action and the rights of the parties are affected by it. It is a final judgment in favor of defendants.”
3. What If You Are Served Again With A Lawsuit That Was Previously Dismissed?
The practical question is what do you do when you are served with a lawsuit that merely repeats the allegations of a prior lawsuit that was dismissed with prejudice. Unfortunately there is no summary procedure for getting the case dismissed. The quickest route is to file a demurrer challenging the complaint. Your business litigation attorney should ask the court to take judicial notice of the prior complaint and the dismissal with prejudice. The court should then be able to rule at the demurrer stage that the lawsuit is barred and dismiss it without leave to amend.
However, you will still have to hire a business litigation attorney and the attorney will have to review the paperwork and prepare a demurrer. You will have to pay an appearance fee to the court and pay for the preparation of the brief. The motion itself will be scheduled a month (or two or three months) out and the other party can use that time in which to conduct discovery. Oftentimes the lawsuit may be filed for an improper purpose, such as to delay an eviction or other proceeding. However, you will still need to go through the process (and pay for the privilege) in order to have the lawsuit dismissed again.
Los Angeles Business Litigation Attorney Laine T. Wagenseller specializes in real estate and business litigation in Los Angeles and Southern California. For more articles and information, please visit http://www.wagensellerlaw.com. Mr. Wagenseller can be contacted at (213) 996-8338 or email@example.com.