Although the Rules of Civil Procedure (“Rules”) prohibit parties from taking legal action for purposes of harassment, unnecessary delay, or “needless increase in the cost of litigation,”¹ the threat of litigation looms large over many a business. A recent study by the University of Denver’s Institute for the Advancement of the American Legal System (IAALS) found that fully ninety-seven percent of chief legal officers and general counsel agree that civil litigation is too expensive, and more than half feel that it is too complex.²
Recognizing these concerns, the majority of jurisdictions have endorsed section 674 of the Restatement (Second) of Torts (1977), which provides that when a plaintiff voluntarily dismisses a lawsuit, the dismissal may constitute a termination favorable to the defendant for purposes of a subsequent lawsuit against the plaintiff for malicious prosecution. In so doing, these jurisdictions seek to prevent plaintiffs from harassing defendants by repeatedly filing and dismissing claims prior to trial. Just two weeks ago, however, in a case of first impression, the Tennessee Supreme Court rejected section 674 and held that “a voluntary nonsuit taken pursuant to Tennessee Rule of Civil Procedure 41 is not a favorable termination on the merits for purposes of a malicious prosecution claim.”³ Himmelfarb v. Allain, No. M2010-02401-SC-S10-CV, 2012 WL 3667440, 2012 Tenn. LEXIS 620 (Tenn. Aug. 28, 2012) (emphasis added).
The Himmelfarb court rested its holding on three premises. First, citing its 2005 opinion in Parrish v. Marquis,4 the court stated that a judgment, in order to be deemed favorable to the defendant, “must address the merits of the suit rather than terminating the suit on procedural or technical grounds.” According to the court, “[w]hen a voluntary nonsuit is taken, the rights of the parties are not adjudicated.” Thus, the court concluded, “[a] voluntary nonsuit without prejudice does not relate to the merits of the claim[.]”5
Second, the court observed that Rule 41—which is the procedural mechanism that provides for voluntary dismissals—limits plaintiffs to two voluntary nonsuits, prohibits voluntary nonsuits in certain types of cases,6 and forbids the refiling of cases following a voluntary nonsuit in will contests and GTLA actions. As a result, the court determined that the Rule itself assuages concerns “that plaintiffs will be able to harass defendants by continuously filing and dismissing lawsuits[.]”
Finally, as a matter of policy, the court deferred to the possibility that the Restatement (Second)’s approach “may reduce the public’s willingness to resort to the court system for settlement of disputes.” Although the court expressed that it did not wish to discourage the dismissal of claims “when a dismissal is the appropriate court of action,” it “decline[d] to adopt a rule that would deter litigants with potentially valid claims from filing those claims because they are fearful of a subsequent malicious prosecution action.”
One advantage of the Restatement (Second)’s approach is that it allows a court to inquire as to whether “the circumstances of the [prior] dismissal indicate that the original defendants were innocent of wrongdoing.” If so, a court following that approach may consider a voluntary nonsuit a favorable termination for purposes of a malicious prosecution claim. In joining the minority of the jurisdictions who hold that a voluntary dismissal cannot “serve as a favorable termination in a malicious prosecution case,” the Tennessee Supreme Court has eliminated the flexibility that distinguishes the Restatement (Second) analysis.
Still, some hope remains for Tennessee defendants beleaguered by more than one filing of the same claim. As the Himmelfarb court acknowledged, Rule 41.01(2) states that a voluntary dismissal “must be followed by an order of voluntary dismissal signed by the court and entered by the clerk.” Thus, a voluntary dismissal may yet count as a termination on the merits—and, thus, a favorable termination for purposes of a malicious prosecution claim—if the order states that the adjudication of dismissal was on the merits. And although defendants undoubtedly would prefer not to have to entertain even a single filing of a claim that will ultimately be dismissed, they should take some comfort in the fact that even under Himmelfarb, a plaintiff is only allowed two voluntary dismissals.
1. Fed. R. Civ. P. 11(b)(1); Tenn. R. Civ. P. 11.02(1).
2. INSTITUTE FOR THE ADVANCEMENT OF THE AMERICAN LEGAL SYSTEM, CIVIL LITIGATION SURVEY OF CHIEF LEGAL OFFICERS AND GENERAL COUNSEL 17 (2010), available at http://iaals.du.edu/library/publications/civil-litigation-survey-of-chief-legal-officers-and-general-counsel.
3. In order to succeed on a claim for malicious prosecution in Tennessee, the (former) defendant must establish the following elements: (1) that the (former) plaintiff filed the prior suit without cause; (2) that the former plaintiff filed the prior suit with malice, and (3) that the prior suit was terminated in the defendant’s favor. Christian v. Lapidus, 833 S.W.2d 71, 73 (Tenn. 1992).
4. 172 S.W.3d 526, 531.
5. The court acknowledged that Parrish directed courts to “‘examine the circumstances of the underlying proceeding’ to determine whether the result in the prior case was favorable.” To the extent that this language might have been read as an endorsement of the Restatement (Second)’s approach, however, the court expressly overruled it.
6. Rule 41.01 prohibits voluntary nonsuits in class action cases, in cases in which a receiver has been appointed, in cases in which a defendant’s motion for summary judgment is pending, and in shareholder derivative actions. Tenn. R. Civ. P. 41.01 & Advisory Comm. Cmt.