Conseco Life Ins Co v. Judson

* Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
United States Court of Appeals
Fifth Circuit
F I L E D
January 19, 2007
Charles R. Fulbruge III
Clerk
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 06-30775
(Summary Calendar)
_____________________
CONSECO LIFE INSURANCE COMPANY,
Plaintiff-Appellee
versus
NANCY DAVIS JUDSON,
Defendant-Appellant.
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Appeal from the United States District Court
for the Middle District of Louisiana
(04-CV-155)
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Before SMITH, WIENER and OWEN, Circuit Judges.
PER CURIAM:*
This appeal arises from an interpleader action initiated by
Conseco Life Insurance Company (“Conseco”) to determine the
rightful beneficiary of proceeds from a “key employee” life
insurance policy. Hall Davis, IV (“Davis”), the president and one
of two equal shareholders of Hall’s Mortuary, Inc. (“HMI”), had
himself designated as beneficiary of the policy even though the
corporation had paid the premiums on it. At the time the insurance
proceeds became payable, Davis and Appellant Nancy Davis Judson

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(“Judson”), the other 50% shareholder in HMI, were already
embroiled in state court proceedings regarding the dissolution of
HMI. Both Davis and Judson were named as defendants in the
interpleader action.
Davis answered the interpleader action and filed a cross-claim
against Judson. Judson also answered the interpleader and filed a
counterclaim against Davis and third-party claims against several
other participants in the ongoing dissolution of HMI. Most of
these additional claims did not depend on resolution of the
interpleader action.
The state court then enjoined Judson from pursuing in federal
court any claims related to HMI’s dissolution, other than the
interpleader action. In compliance with this injunction, Judson
filed an Ex Parte Notice of Dismissal in the district court,
withdrawing a portion of her counterclaim against Davis and all of
her third-party claims. At the time she filed this notice, neither
Davis nor any of the third parties had filed responsive pleadings.
For reasons we are unable to discern, the district court
treated Judson’s Notice of Dismissal as though it were a motion to
dismiss and set it for hearing along with all remaining motions in
the interpleader action. Judson then moved to strike the Notice of
Dismissal from the docket, asserting that, because (1) no adverse
party had responded to her claims, and (2) she had not previously
dismissed any action based on or including the same claims in any
court, Rule 41 of the Federal Rules of Civil Procedure gave her the

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2 Fed. R. Civ. P. 41(a)(1) (emphasis added).
3 Fed. R. Civ. P. 41(c).
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unrestricted right to dismiss her claims without leave of the
court. The district court denied Judson’s motion and, after
resolving the interpleader action in favor of HMI, “DENIED, as
moot” Judson’s Notice of Dismissal. Understandably concerned with
the possible preclusive effect of this denial on her claims against
Davis and the other third parties, Judson filed a motion for a new
trial, but that motion was also denied. She now appeals.
Judson’s interpretation of FRCP 41 is correct. “[A]n action
may be dismissed by the plaintiff without order of the court [] by
filing a notice of dismissal at any time before service by the
adverse party of an answer or of a motion for summary judgment.”2
“The provisions of this rule apply to the dismissal of any
counterclaim, cross-claim or third-party claim.”3 In this case, it
is undisputed that no adverse party had responded to Judson’s
claims.
The district court erred in treating Judson’s Notice of
Dismissal as a motion to dismiss and in denying it “as moot.” We,
therefore, reverse the district court and remand this action to the
district court with instructions to enter judgment recognizing that
the claims specified in Judson’s notice were properly dismissed at
the time it was filed.
REVERSED AND REMANDED with instructions.

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