Shipex v. Brady

2022 UT App 118

THE UTAH COURT OF APPEALS

SHIPEX LOGISTICS LLC,
Appellee,
v.
CHRIS BRADY AND CALL-O’NEILL CONTAINERS LLP,
Appellants.

Opinion
No. 20210137-CA
Filed October 14, 2022

Third District Court, Salt Lake Department
The Honorable Mark S. Kouris
No. 190907509

Jefferson W. Gross, S. Ian Hiatt, and J. Adam
Sorenson, Attorneys for Appellants
Troy L. Booher and Alexandra Mareschal, Attorneys
for Appellee

JUDGE DAVID N. MORTENSEN authored this Opinion, in which
JUDGE GREGORY K. ORME and JUSTICE JILL M. POHLMAN
concurred. 1

MORTENSEN, Judge:

¶1 ShipEx Logistics LLC (ShipEx) failed to produce its
required disclosures, which resulted in ShipEx having no
available evidence to prove its claims. Consequently, the district
court granted Chris Brady and Call-O’Neill Containers LLP’s
(collectively, O’Neill) motion for summary judgment. Thereafter,

1. Justice Jill M. Pohlman began her work on this case as a member
of the Utah Court of Appeals. She became a member of the Utah
Supreme Court thereafter and completed her work on the case
sitting by special assignment as authorized by law. See generally
Utah R. Jud. Admin. 3-108(4).
ShipEx v. Brady

the district court determined that the resulting summary
judgment should be entered without prejudice. O’Neill appeals,
and we reverse and remand.

BACKGROUND

¶2 ShipEx filed a complaint in September 2019 alleging breach
of contract, breach of the covenant of good faith and fair dealing,
and breach of fiduciary duty with respect to Brady and tortious
interference and conspiracy against O’Neill. Thereafter, ShipEx
filed an amended complaint, which modified its factual
allegations and added a claim for misappropriation of trade
secrets against O’Neill. O’Neill filed an answer on April 10, 2020.

¶3 In July 2020, ShipEx emailed O’Neill proposing dates for
depositions. O’Neill responded that it was still waiting for
ShipEx’s initial disclosures. There is no indication in the record
that ShipEx thereafter served initial disclosures.

¶4 In October 2020, ShipEx “reached out” to O’Neill “to
discuss some new [scheduling] deadlines in th[e] case.” O’Neill
responded that it had a pending motion for summary judgment,
which it in fact did not file until three days later. In its motion for
summary judgment, O’Neill argued that ShipEx “failed to make
any disclosures before the end of fact discovery and can show
neither good cause nor harmlessness,” leaving ShipEx “without
any witnesses, documents, or other evidence to use at trial.” And
because ShipEx had “no way to prove its case,” O’Neill argued
that ShipEx’s “claims fail[ed] as a matter of law, and the amended
complaint should be dismissed with prejudice.”

¶5 ShipEx opposed the motion, asserting that fact discovery
had not closed. 2 It did not deny that it had not served initial

2. We note that based on the date of O’Neill’s answer (April 10,
2020), fact discovery would have closed on December 18, 2020,
(continued…)

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disclosures but argued that the “unprecedented apocalyptic-like
disruption of life on earth” brought on by the COVID-19
pandemic justified a new discovery timeline and counseled
against dismissal. O’Neill responded by noting that the pandemic
“did not provide an excuse for [ShipEx] to entirely abandon the
case it chose to bring,” that ShipEx had “shirked” its “duty to
pursue litigation to the best of its ability,” that ShipEx “still [had]
not served any disclosures pursuant” to rule 26 of the Utah Rules
of Civil Procedure, and that “the consequence of a failure to
disclose [is] an inability to present evidence on a matter.”

¶6 In late November 2020, the district court held a hearing on
the summary judgment motion. The court noted that ShipEx had
“waited from last April when the answer was filed until now to
file [its] initial disclosures.” 3 The court went on to observe that it
was unsure how COVID-19 issues would have prevented ShipEx
“from at least putting out [its] initial disclosures.” The court
further noted that ShipEx “even . . . got a little . . . push in the back
to get this thing going when [it] called in July to ask to schedule
some depositions” and O’Neill said that it did not “have initial
disclosures yet.” ShipEx’s counsel responded that “other
litigation” and “things going on” took the case “off [his] radar.”
He argued that the circumstances constituted “excusable neglect”

which fell after O’Neill moved for summary judgment. See Utah
R. Civ. P. 26(a)(2)(B), (c)(5). The court had apparently used the
date of ShipEx’s first amended complaint (January 14, 2020) to
calculate event due dates—yielding September 22, 2020, as the
close of fact discovery—rather than the date of O’Neill’s answer
(April 10, 2020). Nevertheless, ShipEx’s initial disclosures, which
were never submitted, were due on April 24, 2020, even if the later
date is used. See id. R. 26(a)(2)(A).

3. O’Neill’s counsel indicated that he had received initial
disclosures listing “a few names of potential witnesses . . . but . . .
no disclosure of documents” on the morning of the summary
judgment hearing.

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ShipEx v. Brady

and were the “foundation” of ShipEx’s “motion to extend time
and to reset the notice of event due dates.”

¶7 The court—noting that it “really . . . hat[ed] to do this”—
acknowledged that it did not “have a lot of options here” because
“nothing that has not been presented up to now can be used in the
trial, which effectively would alleviate all of the evidence with
regard to” ShipEx. And “given the fact” that ShipEx had “no
evidence,” the court granted O’Neill’s motion for summary
judgment.

¶8 ShipEx’s counsel then asked for clarification on whether
the grant would be with or without prejudice. The court
responded, “I’m not sure. . . . I don’t know what the rules are
there. So help me.” Lacking an immediate answer to the inquiry,
the court asked the parties to submit short supplemental briefs on
the issue.

¶9 In January 2021, the court heard argument on whether the
dismissal should be with or without prejudice. The court did not
purport to revisit its determination that summary judgment
should be granted. Instead, the court concluded “that this case
was not dismissed based on the merits of the case,” noting that it
was uncertain if “we’ve reached the merits on anything” and that
the case “was dismissed on the concept of failure to prosecute.”
The court also found that ShipEx had shown “good cause” and
that O’Neill “was unharmed” by the failure to disclose. Thus, the
court dismissed the case “without prejudice.” In the order
granting O’Neill’s motion for summary judgment, the court
stated,

The case was filed by [ShipEx] but due to failure to
prosecute the case will be dismissed. However, the
matter cannot be dismissed based on the merits of
the case because no merits were ever reached or
determined. Further, the court is not persuaded to
dismiss the matter with prejudice because [ShipEx]
has demonstrated good cause and harmlessness.

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ShipEx v. Brady

The court hereby . . . grants [O’Neill’s] motion for
summary judgment and dismisses [ShipEx’s] claims
without prejudice.

(Cleaned up.) O’Neill appeals.

ISSUE AND STANDARD OF REVIEW

¶10 The sole issue on appeal is whether the district court erred
in dismissing ShipEx’s claims without prejudice on a grant of
summary judgment. “We review the district court’s decision on
summary judgment de novo.” Potter v. South Salt Lake City, 2018 UT
21, ¶ 16, 422 P.3d 803; see also Stafford v. Sandy Paydirt LLC, 2022
UT App 76, ¶ 7, 514 P.3d 157 (“The appellate court reviews a
summary judgment for correctness, giving no deference to the
trial court’s decision.” (cleaned up)).

ANALYSIS

¶11 It is well established, and conceded by ShipEx on appeal,
that a grant of summary judgment is always with prejudice. In
response to one plaintiff’s argument that “even if the trial court
correctly granted [a defendant’s] motion for summary judgment,
the court should have dismissed the case without prejudice” to
enable the plaintiff “to refile his complaint,” we have stated that
“[t]he granting of a motion for summary judgment in favor of a
defendant dismisses the plaintiff’s complaint with prejudice.”
McNair v. Farris, 944 P.2d 392, 396 (Utah Ct. App. 1997); see also
Rivera v. PNS Stores, Inc., 647 F.3d 188, 191 (5th Cir. 2011) (“[A]
grant of summary judgment necessarily results in a dismissal with
prejudice.”); id. at 194 (“[N]o chain of legal reasoning could
possibly lead a court to conclude that summary judgment should
be granted without prejudice. Indeed, the very concept of
granting summary judgment without prejudice is internally
incoherent.”); Quintero v. Klaveness Ship Lines, 914 F.2d 717, 722

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ShipEx v. Brady

(5th Cir. 1990) (“[S]ummary judgment is necessarily granted with
prejudice.”).

¶12 Thus, it is clear that the district court erred in granting
summary judgment without prejudice. Put simply, the court
attempted to do something that was not possible; by its nature,
summary judgment is always with prejudice.

¶13 Moreover, granting the motion for summary judgment for
failure to provide any proof entitled O’Neill to judgment as a
matter of law, which was—contrary to the language used by the
district court—an adjudication on the merits. “To successfully
defend against a motion for summary judgment, the nonmoving
party must set forth facts sufficient to establish the existence of an
element essential to that party’s case. Failure to do so with regard
to any of the essential elements of that party’s claim will result in
a conclusion that the moving party is entitled to a judgment as a
matter of law.” Anderson Dev. Co. v. Tobias, 2005 UT 36, ¶ 23, 116
P.3d 323 (cleaned up). And it is widely recognized that a grant of
summary judgment is inherently an adjudication on the merits.
See American Estate Mgmt. Corp. v. International Inv. & Dev. Corp.,
1999 UT App 232, ¶ 16, 986 P.2d 765 (“Summary judgment on the
. . . claims constituted a judgment on the merits . . . .”); Ostler v.
Retirement Board, 2017 UT App 96, ¶ 28, 400 P.3d 1099 (“A
summary judgment that disposes of all of the claims amounts to
a final judgment on the merits.”); Scholzen Prod. Co. v. Palmer, 2000
UT App 191U, para. 6 (stating that a “suit resulted in a final
judgment on the merits when the trial court granted the
[defendants’] motion for summary judgment”).

¶14 Thus, it is equally clear that the district court erred in
concluding that the grant of summary judgment was not “on the
merits of the case.” Again, in granting summary judgment, courts
do not have the discretion to make this call.

¶15 ShipEx attempts to dodge these two obvious problems
with the district court’s characterization of its summary judgment
ruling by arguing that the court really granted something other

20210137-CA 6 2022 UT App 118
ShipEx v. Brady

than summary judgment. In ShipEx’s view, the question is not
whether the court correctly granted summary judgment without
prejudice. Rather, ShipEx—focusing on the substance of the
dismissal—asserts that the court actually dismissed the case
under rule 41(b) for failure to prosecute. See Utah R. Civ. P. 41(b)
(“If the plaintiff fails to prosecute or to comply with these rules or
any court order, a defendant may move to dismiss the action or
any claim against it.”). We disagree.

¶16 A major obstacle for ShipEx’s argument is that O’Neill
never filed a motion to dismiss ShipEx’s claims under rule 41(b)—
either in title or substance. Instead, O’Neill’s motion was clearly
titled as a motion for summary judgment. And O’Neill
substantively argued, “[ShipEx’s] failure to disclose any evidence
[left ShipEx] without any evidence it [could] use to prove its case
at trial, resulting in [ShipEx’s] complete inability to survive a
motion for summary judgment. Therefore, [ShipEx’s] claims
should be dismissed with prejudice.”

¶17 Still, ShipEx suggests that the district court invoked rule
41(b) sua sponte. Alternatively, ShipEx asserts that “the court
could have converted O’Neill’s motion for summary judgment
into a motion to dismiss under rule 41(b).”

¶18 The problem with ShipEx’s reasoning is that there simply
isn’t enough in the court’s order to construe it as anything other
than what it purports to be—namely, a grant of summary
judgment. In fact, the final sentence of the court’s order reaffirmed
that it was “grant[ing] [O’Neill’s] motion for summary
judgment,” even as it purported to do so without prejudice.
(Cleaned up.)

¶19 The procedural posture of the court’s decision to grant
summary judgment without prejudice further supports this
interpretation. The court had already granted summary
judgment, and there is nothing in the record to show that it ever
undid that order or clarified that it was dismissing the case under
rule 41(b).

20210137-CA 7 2022 UT App 118
ShipEx v. Brady

¶20 Rather, the court asked a narrow question of the parties
and was advised—via supplemental briefing—on whether the
court could grant summary judgment without prejudice. As the
court asked, “The question now is it’s been dismissed. For what
terms will it be dismissed?” ShipEx wrongly advised the court
that—under rule 41(b)—it was within the court’s discretion to
grant summary judgment without prejudice; ShipEx then
compounded its error by pointing to rule 41(b) for factors to be
considered in exercising that discretion. Although the court
considered those factors at ShipEx’s invitation, it did so in a
mistaken effort to determine whether granting summary
judgment without prejudice was warranted. Its analysis did not
suggest that the court intended to revoke its summary judgment
ruling and grant, sua sponte, dismissal under rule 41(b). ShipEx
was simply wrong to assert that the court could grant summary
judgment without prejudice based on an application of the factors
in rule 41(b), and it led the court to adopt this error.

CONCLUSION

¶21 Because summary judgment is by nature an adjudication
on the merits and with prejudice, the district court erred in
characterizing it otherwise. Moreover, there is nothing in the
record to support the assertion that the district court did anything
other than grant a motion for summary judgment. We reverse and
remand to the district court to modify its order to correctly reflect
the law.

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