Rule 41 Dismissals: Potential Pitfalls
Rule 41(a)(1) of the North Carolina Rules of Civil Procedure allows a plaintiff to dismiss a complaint without prejudice by filing a notice of dismissal at any time before he rests his case. Notice may be given by filing a written notice of dismissal or by oral notice in open court. A notice of dismissal is presumed to be without prejudice and will be treated that way unless a notice, stipulation, or court order states that it is with prejudice.
When an action is dismissed without prejudice, Rule 41(a) allows the party to file the same claims within one year. This is true even if the refiled action is beyond the statute of limitations. If the one-year provision expires before the statute of limitation expires, the action can still be refiled within the statute of limitations. It does not matter that the one-year period expired. Note, though, that the original action must have been filed within the relevant statute of limitations in order to receive the benefit of the additional year to refile.
The savings provision of Rule 41 can come in handy for plaintiffs who are not prepared to proceed with trial. However, attorneys must be careful to avoid potential pitfalls in relying on a Rule 41 dismissal. For example, when you give notice of dismissal orally in open court, you need to calendar your one-year refiling date from the date that you gave oral notice and not from a subsequent date when you submitted a written notice. See, Cordrey v. Flinn, 247 N.C. App. 245, 785 S.E.2d 782 (2016). The only exception to this rule is where the trial court accepts notice of voluntary dismissal without prejudice and then instructs the parties to enter a written stipulation. In that circumstance, the one-year refiling period runs from the date the written stipulation of dismissal is filed. See, Thompson v. Newman, 331 N.C. 709, 417 S.E. 2d 224 (1992).
Another potential pitfall for plaintiffs’ attorneys is to confuse North Carolina’s Rule 41 with Rule 41 of the Federal Rules of Civil Procedure. We have had several claims where an attorney assumed that Federal Rule 41 had the same savings provision as North Carolina’s Rule 41. It does not. Federal Rule 41 does not allow for the one-year grace period after dismissal. However, if an action is filed as a diversity action in federal court in North Carolina and voluntarily dismissed, a subsequent action in state court may be filed within one year of the dismissal, even though the action was refiled outside the statute of limitations. See Bockweg v. Anderson, 402 S.E.2d 627, 328 N.C. 436 (1991).
Also note that the use of Rule 41 has its limits. In Estrada v. Burnham, 316 N.C. 318, 341 S.E.2d 538 (1986), the Supreme Court of North Carolina held that the plaintiff did not get the benefit of the one-year savings provision where the complaint was filed with no intent to prosecute the action and was filed solely to toll the statute of limitations. So, when taking a voluntary dismissal under Rule 41(a), be sure that you have some good faith reason for taking the dismissal.
