The opinion of the court was delivered by: Joseph F. Bianco, District Judge
Plaintiff U.S. Underwriters Insurance Company ("U.S. Underwriters") brought this action, pursuant to this Court's diversity jurisdiction, against defendants United Pacific Associates, LLC ("UPA"), Jose Sandoval, and GJL Development Co., Ltd. ("GJL"), seeking a declaration that U.S. Underwriters is not obligated to defend or indemnify UPA with respect to a personal injury suit brought by Sandoval in New York State court. U.S. Underwriters seeks voluntary dismissal of this action, and accordingly moves to dismiss the action under Fed. R. Civ. P. 41(a)(2). For the reasons stated below, the motion to dismiss is granted, and the instant case is dismissed without prejudice.
Sandoval filed a state court personal injury action, in which he alleges that he suffered injury as a result of a slip and fall on a sidewalk in front of 108-18 and 108-20 37th Avenue, in Corona, New York. His lawsuit claims that his injury was caused by the negligent removal of snow on the sidewalk. UPA was building residences on the two plots at the time, pursuant to a contract with the then owners of the property, GJL.
At the time of Sandoval's accident, UPA was insured by a commercial liability policy issued by U.S. Underwriters. U.S. Underwriters filed the instant lawsuit, seeking a declaration that they were not required to defend or indemnify UPA with respect to the underlying state action because they alleged that UPA was not engaging in carpentry operations on the day of the accident, as required by the policy. Following the completion of limited discovery, U.S. Underwriters moved for summary judgment. The Court denied U.S. Underwriters' motion by Memorandum and Order dated May 16, 2006, finding that there were material issues of disputed fact as to whether: "(1) UPA was engaged in carpentry operations at the site on the day of the accident within the meaning of the policy, and, if so, (2) whether the removal of snow on that date was in support of these carpentry operations such that it is covered by the terms of the policy." U.S. Underwriters Ins. Co., 2006 WL 1329756, at *5.
By letter dated June 16, 2006, U.S. Underwriters requested a discontinuance of the instant action. U.S. Underwriters conceded that they would defend the insured in the underlying lawsuit, and would reserve the issue of indemnity to be resolved should the underlying state lawsuit return a judgment against the insured. At a subsequent pretrial conference on June 22, 2006, U.S. Underwriters orally moved to dismiss the action on the grounds discussed in the letter. The Court established a briefing schedule, and U.S. Underwriters filed a letter motion to dismiss the action pursuant to Fed. R. Civ. P. 41(a)(2) on July 10, 2006.
Rule 41(a) of the Federal Rules of Civil Procedure governs the process by which a plaintiff may voluntarily dismiss an action. Barring a stipulation of dismissal signed by all parties who have appeared in an action, a plaintiff must seek leave of the Court to dismiss an action for voluntary withdrawal after the adverse party has served either an answer or motion for summary judgment. See FED. R. CIV. P. 41(a)(1). An action may be dismissed for voluntary withdrawal by court order according to the dictates of Rule 41(a)(2), which specifies:
[A]n action shall not be dismissed at the plaintiff's instance save upon order of the court and upon such terms and conditions as the court deems proper. If a counterclaim has been pleaded by a defendant prior to the service upon the defendant of the plaintiff's motion to dismiss, the action shall not be dismissed against the defendant's objection unless the counterclaim can remain pending for independent adjudication by the court. Unless otherwise specified in the order, a dismissal under this paragraph is without prejudice.
Fed. R. Civ. P. 41(a)(2).*fn2
As a threshold matter, Sandoval has not pleaded a counterclaim in this matter as of the date of the instant motion to dismiss. In fact, Sandoval currently lacks standing to file a lawsuit against U.S. Underwriters regarding coverage under New York law. Under New York Insurance Law § 3420, an injured party may sue a tortfeasor's insurer, but only in "limited circumstances-the injured party must first obtain a judgment against the tortfeasor, serve the insurance company with a copy of the judgment and await payment for 30 days. Compliance with these requirements is a condition precedent to a direct action against the insurance company." Lang v. Hanover Ins. Co., 3 N.Y.3d 350, 354, 787 N.Y.S.2d 211 (N.Y. 2004) (citation omitted).
Generally, a district court may exercise its discretion to permit a plaintiff to dismiss an action pursuant to Rule 41(a)(2) "if the defendant will not be prejudiced thereby." Correspondent Services Corp. v. First Equities Corp. of Fla., 338 F.3d 119, 126 (2d Cir. 2003) (quoting Wakefield v. N. Telecom, Inc., 769 F.2d 109, 114 (2d Cir. 1985)). Factors relevant to the exercise of the court's discretion include: " the plaintiff's diligence in bringing the motion;  any `undue vexatiousness' on plaintiff's part;  the extent to which the suit has progressed, including the defendant's effort and expense in preparation for trial;  the duplicative expense of relitigation; and  the adequacy of plaintiff's explanation for the need to dismiss." Catanzano v. Wing, 277 F.3d 99, 109-110 (2d Cir. 2001) (citing Zagano v. Fordham Univ., 900 F.2d 12, 14 (2d Cir. 1990)). The Court examines each of these factors in turn.
First, the Court finds that plaintiff was sufficiently diligent in bringing this motion. The Court is satisfied that all of U.S. Underwriters' actions have been geared towards an efficient resolution of this matter. Believing that they deserved judgment as a matter of law, U.S. Underwriters accepted expedited discovery, which only involved exchange of documents from the underlying state court action and the policy, and quickly moved for summary judgment. Notwithstanding that they were incorrect about their entitlement to judgment as a matter of law, see U.S. Underwriters Ins. Co., 2006 WL 1329756, at *5, they promptly moved for discontinuance after the denial of their motion, well in advance of deadlines for trial preparation. Under these circumstances, the Court finds that U.S Underwriters was sufficiently diligent.
With respect to the second factor, there is absolutely nothing in the record to indicate that the instant motion, or any of U.S. ...