Effect Of A Stipulated Dismissal "Without Prejudice" On Appellate Jurisdiction

• Published date: 08 March 2022
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation
• Law Firm: Dickinson Wright PLLC
• Author: Mr Phillip DeRosier

On occasion, a plaintiff faced with the dismissal of one or more, but not all, of its claims may wish to pursue an immediate appeal without losing the ability to pursue its remaining claims later on. A similar situation arises when a court dismisses a plaintiffs' claims in their entirety, but the defendant has counterclaims that remain pending. Since an order dismissing less than all of the claims of all of the parties is not "final" for the purpose of bringing an appeal as of right in either the Michigan Court of Appeals or the Sixth Circuit,¹ it is tempting to consider stipulating to the dismissal of the remaining claims or counterclaims "without prejudice" or with some other language preserving the ability to reinstate those claims in the event of an appellate reversal. It would be wise to resist that temptation.

State Court

The Michigan Court of Appeals has repeatedly cautioned against dismissing claims "without prejudice" in order to try and achieve finality. As the court explained in City of Detroit v Michigan, 262 Mich App 542, 545; 686 NW2d 514 (2004), voluntarily dismissing claims without prejudice creates the possibility of "piecemeal" appeals, which the court rules are designed to prevent:

The parties' stipulation to dismiss the remaining claims without prejudice is not a final order that may be appealed as of right; it does not resolve the merits of the remaining claims and, as such, those claims are "not barred from being resurrected on that docket at some future date." Wickings v Arctic Enterprises, Inc, 244 Mich App 125, 136; 624 NW2d 197 (2000). The parties' stipulation to dismiss the remaining claims was clearly designed to circumvent trial procedures and court rules and obtain appellate review of one of the trial court's initial determinations without precluding further substantive proceedings on the remaining claims. This method of appealing trial court decisions piecemeal is exactly what our Supreme Court attempted to eliminate through the "final judgment" rule.

In MLive Media Group v City of Grand Rapids, 321 Mich App 263; 909 NW2d 282 (2017), the Court of Appeals found City of Detroit to be distinguishable because the dismissal without prejudice at issue in MLive was involuntary. Id. at 268. But the court reiterated Michigan's firmly established rule that "[p]arties cannot create a final order by stipulating the dismissal of remaining claims without prejudice after a trial court enters an order denying a motion for summary...