WITH OR WITHOUT... PREJUDICE? THAT'S THE QUESTION.
Often, litigants spend time crafting a lawsuit, filing it, litigating in court, defending it and then have to dismiss the case for some reason. But why? It all depends which we will address.
First, we have to determine what is the difference between With and Without: I categorize these differences with either a Happy Dance or a Not-so-Happy Dance.
1. With Prejudice - "Not so Happy Dance." Here, the matter is dismissed, but if you are the Plaintiff, you may want to see if you can dismiss w/o Prejudice.
Why? With prejudice means that you are prohibited/barred from filing this action again against the same party even if there is new evidence that has come to light that would entitle you to additional damages or a larger settlement.
2. Without Prejudice - "The Happy Dance." Although you may be dismissing the case, if you choose “Without prejudice,” it give you the right to either reinstate the case under the same case number, or re-file the case later. This is awesome for the Plaintiff.
As the Defendant, it leaves some uncertainty as to whether they would be pulled into court again for something that they thought was over. In this type of situation, this is not a good feeling and you should have your counsel put forth an aggressive argument as to why the matter should be dismissed with prejudice.
What are the reasons for agreeing to one option over the other?
1. With Prejudice: If you are the Plaintiff and have settled the matter for a fair number that you would rather walk away instead of spending additional time in court fighting for fees you may not receive, it probably makes more sense to agree to dismissing your case "with" prejudice.
2. Without Prejudice: Here are a few examples to consider.
Maybe you do not have enough evidence to prosecute a claim at this time and believe that there is information out there that can help you later.
Maybe you want the ability to reinstate the case if evidence comes to light that the opposing party predicated a fraud upon the court or in settlement talks that was a material cause of you agreeing to dismiss the case in the first place.
Real Life Example of Fighting over With or Without:
Recently, I appeared for a scheduled trial. I had previously prepped my client, filed two trial motions to dispose of the case prior to having the actual trial and served them on the court and opposing counsel. My client had been sued by a Credit Company for breach of agreement. We previously tried to get the matter dismissed since the account was predicated upon fraud. She submitted a fraud affidavit and twice, the Credit Company issued a letter stating that there was no fraud found.
Then... We appear in court for trial. I find opposing counsel and ask him if he's ready for trial today and if he received my trial motions. Opposing counsel states that he had someone review the file again for fraud and a valid fraud claim was found... but the night before trial. Fishy, right? LOL. Therefore, Opposing Counsel agrees to dismiss the case but they want to dismiss "Without" prejudice.
I did not agree to this and stated that we could step up before the court for hearing. I instructed the court by saying:
"We have two motions scheduled and ready for trial today. The Credit Company previously issued two letters of no fraud, and the day of trial states that in fact a valid fraud claim has been found. Any dismissal of this matter without prejudice will subject my client to substantial prejudice and we will rather have a trial for the court to determine if this matter is dismissed with or without prejudice."
Moral of the Story
Matter Dismissed WITH PREJUDICE.
Watch the Video Here
This article is a service of SL DeBarros Law Firm, LLC. We offer a wide array of business legal services and can help you make the wisest business choices throughout life and in the event of your death. We also offer a Business Protection Start-Up Session or a Business Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.