Conditional dismissals, appellate jurisdiction, compulsory counterclaims, and you

Civil procedure and appellate jurisdiction wonks may be interested in the Eight District's decision in Myocare Nursing Home, Inc. v. Hohmann. The question is whether the civil rules allow for conditional dismissals, and if so whether a conditional dismissal confers appellate jurisdiction over the order disposing of the remaining claims.

The Eighth District answered both questions in the negative, which I think is the right result. But the court includes some statements that I think are inaccurate, particularly with respect to the dismissal of compulsory counterclaims.

The plaintiff sued its former lawyer for malpractice. The lawyer counterclaimed for unpaid fees. A summary judgment decision resolved the claims in the complaint in favor of the defendants, but the order did not include a Rule 54(B) certification. The parties, desiring to have the malpractice claims resolved before proceeding on the fee claims, filed what they called a stipulated conditional dismissal of the counterclaim. The condition was, apparently, that the counterclaim would be re-filed after the appeal was resolved, without regard to any other rule or law that would bar re-filing.

The appellate court found that Ohio law doesn't recognize conditional dismissals. Claims are either dismissed or they aren't, and the purported reservation or condition amounted to a non-dismissal. As a result, the counterclaim remained pending and the appellate court lacked jurisdiction over the appeal from the non-final order.

That's all well and good, so far as it goes. But the court then went on to also say that the reason that the counterclaim was not capable of dismissal was that it was a compulsory counterclaim. The compulsory nature of the counterclaim meant that could not remain pending for independent adjudication, and so it could not be voluntarily dismissed.

I don't see any support in the text of Rule 41 for this holding.  It's certainly true that Rule 41(A)(1)(a) provides that a party can voluntarily dismiss its claims by notice (i.e., unilaterally) only if there are no counterclaims that cannot remain pending for independent adjudication.  But Rule 41(A)(1)(b) expressly allows the parties to stipulate (i.e., bilaterally, or multilaterally) that the claims can be dismissed--and there is no exception for cases in which there is a counterclaim that cannot remain pending for independent adjudication. In other words, even in a situation where a party could not unilaterally voluntarily dismiss its claims without prejudice under Rule 41(A)(1)(a) due to the presence of a compulsory counterclaim, the parties can jointly stipulate that claims can be dismissed without prejudice, compulsory counterclaim be damned.

The opinion is not written terribly clearly, so maybe I'm missing something, but it seems circular and incorrect to me, at least to the extent that it relies on the compulsory counterclaim rule to support its holding. I think this part of the holding goes too far.

In any case, it seems that the parties' options now are to either seek a Rule 54(B) certification from the trial court, dismiss the counterclaim for fees with prejudice, or litigate the counterclaim.