Failure to Prosecute Suit Required Dismissal
Post 5102
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When Litigant Ignores Court Orders its Suit Must Be Dismissed
In Kmart Corporation v. AIG Assurance Company et al, No. EDCV 15-1520-KK-DTBx, United States District Court, C.D. California (June 16, 2025) Kmart sued its insurers for breach of contract and failure to indemnify in a separate lawsuit.
The proceedings encountered multiple delays due to Kmart’s bankruptcy, resulting in a court-ordered stay.
Court’s Stay on Proceedings: On October 25, 2018, the court issued a stay on the case pending the resolution of Kmart’s bankruptcy, with instructions for counsel to provide updates to the court.
Lack of Communication: Kmart did not file timely status reports with the last communication dated December 14, 2022. Consequently, the court issued orders for updates in May and June 2025.
Factors for Dismissal: The court evaluated five factors regarding dismissal for failure to prosecute, including the public’s interest in resolution, management of the docket, potential prejudice to defendants, and the availability of less drastic sanctions.
Conclusion of Dismissal: Ultimately, the court dismissed the action without prejudice due to Kmart’s failure to comply with court orders and prosecute the case, thereby closing the matter.
On January 9, 2020, Plaintiff filed a status report stating the Chapter 11 Plan was approved, but no effective date was issued, and thus, the stay should remain in effect. On January 4, 2021, Plaintiff filed another status report stating no changes had occurred since the last update. Plaintiff has since been silent.
ANALYSIS
It is well established that district courts have sua sponte authority to dismiss actions for failure to prosecute or to comply with court orders.
In deciding whether to dismiss for failure to prosecute or comply with court orders, a district court must consider five factors:
1. the public’s interest in expeditious resolution of litigation;
2. the court’s need to manage its docket;
3. the risk of prejudice to the defendants;
4. the public policy favoring disposition of cases on their merits; and
5. the availability of less drastic sanctions.
The first two factors – public interest in expeditious resolution of litigation and the court’s need to manage its docket – weigh in favor of dismissal. The failure to prosecute and follow court orders hinders the Court’s ability to move this case toward disposition and suggests Plaintiff does not intend to litigate this action diligently.
The third factor – prejudice against defendants – also weighs in favor of dismissal.
The fourth factor – public policy in favor of deciding cases on the merits – ordinarily weighs against dismissal.
It is Plaintiff’s responsibility to move toward disposition at a reasonable pace and avoid dilatory and evasive tactics.
Plaintiff did not discharge this responsibility despite having been instructed on its responsibilities; granted sufficient time in which to discharge them; and warned of the consequences of failure to do so. Under these circumstances, the policy favoring resolution of disputes on the merits does not outweigh Plaintiff’s failure to obey court orders or to file responsive documents within the time granted.
The fifth factor – availability of less drastic sanctions – also weighs in favor of dismissal. The Court cannot move the case toward disposition without Plaintiff’s compliance with court orders or participation in this litigation. Plaintiff has shown it is either unwilling or unable to comply with court orders by failing to file responsive documents or otherwise cooperating in prosecuting this action.
Finally, while dismissal should not be entered unless Plaintiff has been notified dismissal is imminent, see West Coast Theater Corporation v. City of Portland, 897 F.2d 1519, 1523 (9th Cir. 1990), the Court has explicitly warned Plaintiff about the possibility of dismissal.
CONCLUSION
Accordingly, the Court dismissed the action without prejudice under Federal Rule of Civil Procedure 41(b) for failure to prosecute and comply with Court orders.
ZALMA OPINION
Kmart sought damages from its insurers because of a lack of defense or indemnity. That suit became an asset of the bankruptcy estate which asset was either determined to be worthless or not worth the expense needed to succeed. Rather than dismiss the case by the bankrupt estate it did nothing and forced the USDC to dismiss the action for failure to prosecute.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Post number 5291
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Post number 5289
In Great West Casualty Co. v. Nationwide Agribusiness Insurance Co., and Conserv FS, Inc., and Timothy A. Brennan, as Administrator of the Estate of Pat- rick J. Brennan, deceased, Nos. 24-1258, 24-1259, United States Court of Appeals, Seventh Circuit (February 11, 2026) the USCA was required to resolve a dispute that arose when a tractor-trailer operated by Robert D. Fisher (agent of Deerpass Farms Trucking, LLC-II) was involved in a side-impact collision with an SUV driven by Patrick J. Brennan, resulting in Brennan’s death.
Facts
Deerpass Trucking, an interstate motor carrier, leased the tractor from Deerpass Farms Services, LLC, and hauled cargo for Conserv FS, Inc. under a trailer interchange agreement. The tractor was insured by Great West Casualty Company with a $1 million policy limit, while the trailer was insured by Nationwide Agribusiness Insurance Company with a $2 million ...
Opiod Producer Seeks Indemnity from CGL Insurers
Post number 5288
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Insurers Exclude Damages Due to Insured’s Products
In Matthew Dundon, As The Trustee Of The Endo General Unsecured Creditors’ Trust v. ACE Property And Casualty Insurance Company, et al., Civil Action No. 24-4221, United States District Court, E.D. Pennsylvania (February 10, 2026) Matthew Dundon, trustee of the Endo General Unsecured Creditors’ Trust, sued multiple commercial general liability (CGL) insurers for coverage of opioid-related litigation involving Endo International PLC a pharmaceutical manufacturer.
KEY FACTS
Beginning as early as 2014, thousands of opioid suits were filed by governments, third parties, and individuals alleging harms tied to opioid manufacturing and marketing.
Bankruptcy & Settlements
Endo filed Chapter 11 in August 2022; before bankruptcy it ...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lost the ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah. Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and wonder how did all these wonderful things come into being. Jews believe the force we call G_d created the entire universe and everything in it. Jews feel G_d is all seeing and knowing and although we can’t see Him, He is everywhere and in everyone.We understand...
Passover for Americans
Posted on February 19, 2026 by Barry Zalma
Read the full article at https://www.linkedin.com/pulse/passover-americans-barry-zalma-esq-cfe-5vgkc.
“The Passover Seder For Americans”
For more than 3,000 years Jewish fathers have told the story of the Exodus of the enslaved Jews from Egypt. Telling the story has been required of all Jewish fathers. Americans, who have lived in North America for more than 300 years have become Americans and many have lostthe ability to read, write and understand the Hebrew language in which the story of Passover was first told in the Torah.
Passover is one of the many holidays Jewish People celebrate to help them remember the importance of G_d in their lives. We see the animals, the oceans, the rivers, the mountains, the rain, sun, the planets, the stars, and the people and ...
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Post number 5275
Posted on January 30, 2026 by Barry Zalma
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When Experts for Both Sides Agree That Two Causes Concur to Cause a Wall to Collapse Exclusion Applies
In Lido Hospitality, Inc. v. AIX Specialty Insurance Company, No. 1-24-1465, 2026 IL App (1st) 241465-U, Court of Appeals of Illinois (January 27, 2026) resolved the effect of an anti-concurrent cause exclusion to a loss with more than one cause.
Facts and Background
Lido Hospitality, Inc. operates the Lido Motel in Franklin Park, Illinois. In November 2020, a windstorm caused one of the motel’s brick veneer walls to collapse. At the time, Lido was insured under a policy issued by AIX Specialty Insurance Company which provided coverage for windstorm damage. However, the policy contained an exclusion for any loss or damage directly or indirectly resulting from ...
