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Plaintiff should have been allowed to revise voluntary dismissal where dismissal was not a final order.

Where plaintiff voluntarily dismissed the governmental entity that employed defendant doctor, then defendant doctor asserted in his answer that the employer was a necessary party under the GTLA, the trial court should have granted plaintiff’s motion to revise the order granting voluntary dismissal pursuant to Tennessee Rule of Civil Procedure 54.02. In Ingram v. Gallagher, No. E2020-01222-COA-R3-CV (Tenn. Ct. App. July 19, 2021), plaintiff filed an HCLA suit and originally named Dr. Gallagher, Chattanooga Neurosurgery and Spine Group, Dr. Worthington, and Chattanooga-Hamilton County Hospital Authority (Erlanger) as defendants. All named defendants had received proper pre-suit notice. Shortly after filling suit, plaintiff filed a notice of voluntary dismissal without prejudice as to all defendants other than Dr. Gallagher. The trial court entered an order granting the voluntary dismissal, leaving only Dr. Gallagher as a defendant.

When Dr. Gallagher filed his answer to the complaint, he included as a defense “that he was an employee of a governmental entity, Erlanger, and that entity had not been included as a party to the action.” Plaintiff then filed a motion to alter or amend the order of voluntary dismissal, “seeking to set aside the dismissal of Erlanger as a defendant to this action.” Plaintiff cited Rules 54 and 60 in his motion, and he stated that the Erlanger was dismissed inadvertently, as “he was unsure whether Dr. Gallagher was employed by Erlanger because Dr. Gallagher was also listed as being employed by the neurology group.”

The trial court denied plaintiff’s motion to alter or amend the order of voluntary dismissal, and also denied his motion to amend his complaint. Although a later amendment to the complaint was allowed, which added Erlanger as a defendant again, Erlanger was ultimately successfully granted dismissal, and Dr. Gallagher was granted summary judgment on the basis that Erlanger was a required party under the GTLA. This appeal followed, wherein the Court of Appeals ruled that plaintiff’s motion to revise the voluntary dismissal should have been granted.

Although plaintiff raised several issues on appeal, the issue of whether the request to set aside the voluntary dismissal should have been granted was dispositive of the appeal. Pursuant to Rule 54.02, “any court order that adjudicates less than all the claims, rights, and liabilities of fewer than all of the parties involved in the action is not a final order” and is “subject to revision by the court at any time prior to entry of the final judgment.” Here, the order granting voluntary dismissal “only dismissed some of the claims before the court” and was therefore not a final judgment, so the trial court should have analyzed this issue under Rule 54.02 rather than treating this as a Rule 60 motion.

“[A]lthough the same factors apply to guide the court’s inquiry, a party may be granted relief from a non-final order more liberally under Rule 54.02 than when a party is seeking relief from a final judgment under Rule 59 or Rule 60.” (internal citation omitted). Further, “[c]ourts prefer cases to be resolved on their merits whenever possible[.]” In ruling that the motion to revise the voluntary dismissal should have been granted, the Court pointed out that “[t]he timeframe between the voluntary dismissal and the beginning of Plaintiff’s efforts to withdraw the voluntary dismissal [was] relatively short,” and because Erlanger had notice of the lawsuit, the Court saw “no harm to either Dr. Gallagher or Erlanger with allowing Plaintiff to withdraw his voluntary dismissal of Erlanger as a party other than having this action decided on the merits.” Accordingly, denial of the motion to revise the voluntary dismissal was reversed.

This case is fairly fact specific, but it does show the Court of Appeals leaning towards adjudicating a case on the merits rather than based on a technical GTLA requirement. It’s notable here that this was not a case where plaintiff tried to add a necessary party after filing suit. Plaintiff had originally named the required employer defendant and provided proper pre-suit notice, which enabled the Court of Appeals to find that revising the voluntary dismissal would not harm defendants.

Look for a Rule 11 application to be filed in this case.

NOTE: This opinion was released three months after oral arguments in this case.

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