United States District Court, D. Colorado
A. BRIMMER, UNITED STATES DISTRICT JUDGE
matter is before the Court on the Motion to Dismiss for
Failure to Prosecute Under Rule 41(b) [Docket No. 27] filed
by defendant Allstate Insurance Company.
insurance bad-faith case, plaintiffs allege that defendant
delayed or denied the payment of benefits after a hailstorm
damaged plaintiffs' roof on or about June 19, 2015.
Docket No. 4. Plaintiffs filed this case on June 28, 2016.
Id. at 1. On December 13, 2016, pursuant to a
provision in the insurance policy, plaintiffs sent defendant
a demand for appraisal. Docket No. 27-1. On January 26, 2017,
the Court entered an Order [Docket No. 26] granting the
parties' Joint Motion to Stay Proceedings Pending
Appraisal [Docket No. 25]. The order directs the parties to
file a status report with the Court no later than thirty days
after the completion of the appraisal process. Docket No. 26.
By the time of the filing of the motion to stay, neither
party had begun discovery. Docket No. 25 at 2, ¶ 4.
13, 2017, defendant sent a letter to plaintiffs' law firm
informing it that plaintiffs' claim was being closed
because plaintiffs “failed to appoint and notify
Allstate of [their] chosen appraiser” and that
defendant has “received no additional communication
from [plaintiffs].” Docket No. 27-4 at 1. The letter
stated that “[c]losure of your claim concludes the
appraisal process.” Id. at 2.
September 24, 2017, having received no response from
plaintiffs, counsel for defendant contacted plaintiffs'
counsel by email to inform him of defendant's intent to
file a motion to dismiss for lack of prosecution. Docket No.
27-5. Plaintiffs' counsel responded two days later,
indicating that “a few weeks ago” he was hit by a
truck while on a motorcycle and had been “recovering
from significant, serious injuries.” Docket No. 27-6.
Plaintiff's counsel informed defendant that plaintiffs
would oppose defendant's motion. Id. Defendant
did not file a dismissal motion at that time. Docket No.
27-7. On February 8, 2018, counsel for defendant again
contacted plaintiffs' counsel by email, indicating that
defendant now intended to file a motion to dismiss for lack
of prosecution. Id. Plaintiffs' counsel did not
respond. Defendant filed its motion on May 24, 2018.
Rule of Civil Procedure Rule 41(b) provides:
If the plaintiff fails to prosecute or to comply with these
rules or a court order, a defendant may move to dismiss the
action or any claim against it. Unless the dismissal order
states otherwise, a dismissal under this subdivision (b) and
any dismissal not under this rule--except one for lack of
jurisdiction, improper venue, or failure to join a party
under Rule 19--operates as an adjudication on the merits.
Fed. R. Civ. P. 41(b).
sanction of dismissal with prejudice for failure to prosecute
is a “severe sanction, ” warranted when
“the aggravating factors outweigh the judicial
system's strong predisposition to resolve cases on their
merits.” Ecclesiastes 9:10-11-12, Inc. v. LMC
Holding Corp., 497 F.3d 1135, 1143-44 (10th Cir. 2007)
(quoting Ehrenhaus v. Reynolds, 965 F.2d 916, 921
(10th Cir. 1992)). Courts in this circuit apply five factors
to determine whether a motion under Rule 41(b) should be
granted: “(1) the degree of actual prejudice to the
defendant; (2) the amount of interference with the judicial
process; . . . (3) the culpability of the litigant; (4)
whether the court warned the party in advance that dismissal
of the action would be a likely sanction for noncompliance,
and (5) the efficacy of lesser sanctions.”
Ehrenhaus, 965 F.2d at 921 (internal quotations and
citations omitted); see also Jones v. Thompson, 996
F.2d 261, 264 (10th Cir. 1993) (extending Ehrenhaus
to Fed.R.Civ.P. 41(b) motions).
first Ehrenhaus factor is actual prejudice.
Prejudice can be shown through unreasonable delay, as
“a defendant has “a legitimate interest in
bringing the matter to closure within a reasonable
time.” Rogers v. Andrus Transp. Services, 502
F.3d 1147, 1152 (10th Cir. 2007). Prejudice can also be shown
when, through plaintiff's conduct, defendants
“los[e] an opportunity to gain relevant information . .
. [about] the factual basis of the parties' claims.
See Ecclesiastes, 497 F.3d at 1145.
argues that it suffered inconvenience and prejudice in two
related ways. First, over three years have passed since the
storm that plaintiffs allege caused damage to their home,
which has impeded the defendant's ability to resolve the
case in a reasonable time. See Docket No. 1-3 at 2,
¶ 10. Second, the plaintiffs' failure to prosecute
the action has interfered with defendant's ability to
engage in meaningful discovery because the home in question
has “experienced other weather events” since June
2015. See Docket No. 27 at 6. Plaintiffs argue that
defendant has suffered no actual prejudice because defendant
is in possession of a repair estimate provided by plaintiffs
that includes “numerous photographs and details of the
storm damage.” See Docket No. 28 at 7.
Further, plaintiffs suggest that defendant's own claims
file is “presumably replete with notes and photographs
from their own adjuster's inspection.” Id.
Court finds that defendant has failed to show any actual
prejudice. Defendant does not deny that it inspected the
property near the time of the claim. See Docket No.
27 at 3, ¶ 3. Therefore, the passage of time since the
proceedings were stayed does not prejudice defendant as it
might otherwise have. Moreover, defendant fails to identify
any discovery that it will not have access to once the stay
is lifted. Finally, defendant does not show that it has lost
the opportunity to gain relevant information about the
factual basis of plaintiffs' claim. See
Ecclesiastes, 497 F.3d at 1145. Therefore, the first
Ehrenhaus factor weighs in favor of plaintiffs.
also fails to show that the second Ehrenhaus factor,
interference with the judicial process, weighs in its favor.
This case has been administratively closed pending the
appraisal process. Docket Nos. 25, 26. Because of the stay,
the only interference with the judicial process has been
general delay. Defendant has failed to demonstrate how
plaintiff has “hindered the court's management of
its docket.” See Jones v. Thompson, 996 F.2d
261, 265 (10th Cir. 1993). While plaintiffs have been remiss
in their delay, it is worth noting that defendant could have
moved to re-open the case over a year ago when it decided to
close plaintiffs' claim. See Docket No. 27-4 at
third factor is the culpability of the litigant in failing to
prosecute the case. This factor asks whether plaintiffs (or
their counsel) caused the failure to prosecute, or whether
they are ...