Women First OB/GYN Associates, L.L.C. v. Harris

Deborah S. Eyler, J. The primary question in this case is whether the voluntary dismissal with prejudice of a tort claim against an employee for no consideration and in the absence of a release bars the prosecution of the same claim against the employer based solely on vicarious liability. We hold that it does not. FACTS AND PROCEEDINGS In the Circuit Court for Montgomery County, Yolanda Harris, the appellee, filed a one-count complaint for medical ⁶⁵¹ negligence against Women First OB/GYN Associates, LLC (“Women First”), the appellant, and LaKeiseha McMillan, M.D., an obstetrician-gynecologist (“OB-GYN”) employed by Women First. 1 Ms. Harris alleged that Dr. McMillan negligently performed a laparoscopic hysterectomy, causing an injury to her left ureter, and that Women First was liable for Dr. McMillan’s negligence under the doctrine of respondeat superior. There was no claim of independent negligence against Women First.

Women First and Dr. McMillan filed answers; they were represented by the same counsel. Discovery proceeded and the case was set in for a jury trial to begin on December 7, 2015. On December 1, 2015, the parties filed a stipulation, signed by counsel, that Dr. McMillan was an “employee” of Women First and was “acting within the scope of her employment” “at all times while ... treating [Ms. Harris!.]” The trial commenced as scheduled. At the very outset, before the venire was brought in, defense counsel told the court that “through some discussions just before trial we’ve decided to dismiss Dr. McMillan.

So the only defendant would be [Women First.]” 2 The court responded, “Okay.” In case the court had not seen it, defense counsel referenced the filed stipulation that Dr. McMillan had been acting within the scope of her employment at all relevant times. Nothing more was said about the dismissal of Dr. McMillan that day. Motions and jury selection took up the rest of the day. At the beginning of the second day of trial, before the jury was brought in, the court clerk informed the judge that defense counsel “had a question about stipulation as to Defendant [Dr. McMillan].” Addressing counsel, the judge stated, “I’m told by [the clerk] that there’s a question about the ⁶⁵² language of the stipulation regarding Dr. McMillan’s portion being dismissed.” Defense counsel responded that there was no written stipulation about that.

Both counsel said the stipulation could be done “orally.” Counsel for Ms. Harris then stated: So the plaintiff dismisses with prejudice the claims against Dr. Lakeischa McMillan ... [individually. The stipulation is that at all times, she was acting as an employee, agent and servant of Women First ... and that they are responsible for any actions of Lakeischa McMillan, M.D. Counsel agreed that the jury would be instructed that Dr. McMillan was acting as an employee, agent, and servant of Women First. There was no ruling sought or made by the court. A docket entry made that day states, however: “Plaintiffs oral motion dismisses the claims with prejudice as to defendant Lakeischa McMillan MD—Granted.” There is no separate written order memorializing the court’s ruling.

Ms. Harris testified that Dr. McMillan performed the lapa-roscopic hysterectomy on April 8, 2010. Unlike a traditional hysterectomy, in which the physician opens the patient surgically, a laparoscopic hysterectomy is performed by creating small incisions through which a laparoscope is inserted and used to carry out the procedure. Several days after the hysterectomy, Ms. Harris noticed fluid leaking from one of her incisions. The leaking stopped but sometime around April 21, 2010, when she had a follow up visit with Dr. McMillan, she began to experience discomfort when urinating and with bowel movements.

These problems persisted and she also developed abdominal bloating and hardness. At the beginning of May 2010, her primary care physician referred her to a urologist. The urologist diagnosed Ms. Harris with an injured left ureter, the tube-like structure that connects the left kidney to the bladder. The injury was causing urine to escape her left ureter and fill her abdomen.

Ms. Harris was referred to radiologist Stephen Karr, M.D., at Holy Cross Hospital, to perform a pyelogram. From that study, Dr. Karr determined the location of the injury to the left ureter and placed a ⁶⁵³ nephrostomy tube and collection bag, redirecting urine from the left kidney. The tube and bag remained in place for five and a half months, until the injury healed. Ms. Harris then underwent surgery to reattach her left ureter to her bladder.

Ms. Harris called Richard Luciani, M.D., an OB-GYN, and Barry Aron, M.D., a urologist, as expert witnesses. They testified that Dr. McMillan breached the standard of care in performing the laparoscopic hysterectomy, causing the injury to the left ureter and the need for subsequent treatment and surgery. 3 We shall discuss the details of their testimony in addressing Question III. At the close of Ms. Harris’s case, Women First moved for judgment. Defense counsel argued that the dismissal with prejudice of Ms. Harris’s claim against Dr. McMillan operated as a release or an adjudication upon the merits in favor of Dr. McMillan; and because Dr. McMillan was “the sole agent for which Women[ ] First could be held vicariously liable[,]” there could be no liability against Women First as a matter of law.

Ms. Harris’s lawyer responded that the dismissal with prejudice was not a release or an adjudication upon the merits. The claim against Dr. McMillan simply was “drop[ped]” “without consideration,” and the dismissal was not intended to extinguish Ms. Harris’s claim against Women First. He maintained that the dismissal along with the written stipulation that Dr. McMillan was acting as an employee of Women First and within the scope of her employment were “a culmination” of “discussions and negotiations” with defense counsel, who knew that Ms. Harris had no intention to preclude liability on the part of Women First. 4 Alternatively, he asked the court to ⁶⁵⁴ exercise its revisory power under Rule 2-5B5 and “nunc pro tunc reinstate the claim against Dr. McMillan[.]” In rebuttal, counsel for Women First argued that Ms. Harris’s intent in dismissing Dr. McMillan with prejudice was not relevant; and the court did not have revisory power to reinstate her claim against Dr. McMillan. The court directed counsel to submit written memoranda the next day in support of and opposition to Women First’s motion for judgment.

Counsel did so. In her opposition, Ms. Harris asked as an alternative that, if the court were inclined to grant the motion, it revise the dismissal to one without prejudice. The court denied the motion on the morning of the following trial day. It concluded that Ms. Harris’s negligence claim against Women First remained viable even though she had dismissed her claim against Dr. McMillan with prejudice.

It noted that under Maryland law, Ms. Harris could have sued Women First under a theory of respondeat superior without suing Dr. McMillan at all. It ruled that the voluntary dismissal with prejudice of Dr. McMillan was neither a release nor an adjudication upon the merits in favor of Dr. McMillan so as to preclude vicarious liability on the part of Women First and found that Ms. Harris did not intend to foreclose her claim against Women First by dismissing her claim against Dr. McMillan. The court went on the say that even though it had denied the motion for judgment and it was not necessary for it to exercise revisory power to change Ms. Harris’s “motion to dismiss to one without prejudice[,]” it had the power to do so. It then proceeded to do so: I don’t believe I need to [exercise revisory power] based on the ruling I’ve made, but so the record is clear, I do believe that I do still retain revisory power, because this was the plaintiffs action, it is not a judgment that has been entered, ⁶⁵⁵ and it is an interlocutory proceeding, as I understand the statute and the case law, so that it is clear that this Court has found that the plaintiffs claim for respondeat superior does remain active, notwithstanding the action of the dismissal, which I believe was fully part of a negotiating discussion that was between plaintiff and defendant.

I am going to exercise revisory power and amend [Ms. Harris’s] motion to dismiss [Dr. McMillan] as a motion to dismiss without prejudice, because I do not believe that the facts in any way support [Ms. Harris’s lawyer’s] having endeavored to undermine the claim of [their] client as on the cusp of the trial beginning and was in response to the issue of if and when any judgment might be obtained and Dr. McMillan’s ability to pay that judgment individually. The court directed the clerk to enter a new, separate docket entry amending Ms. Harris’s “motion to dismiss as to Dr. McMillan individually without prejudicef.]” That entry states: Court revises plaintiffs motion/stipulation at [previous docket entry] and is amended to dismiss as to Dr. McMillan individually without prejudice. There was no written order dismissing Ms. Harris’s claim against Dr. McMillan -with or without prejudice. In its case, Women First called Dr. McMillan, who defended her care, and three expert witnesses: Craig Dickman, M.D., an OB-GYN; Harry Johnson, M.D., an OB-GYN and urogyne-cologist; and Stanley Redwood, M.D., a urologist.

As with Ms. Harris’s experts, we shall discuss their testimony when we address Question III. After Women First rested its case, it renewed its motion for judgment on the grounds previously asserted. The court denied the motion. Over objection, Ms. Harris’s lawyer called Dr. Karr as a rebuttal witness.

The jurors returned a verdict in favor of Ms. Harris, finding that Dr. McMillan had negligently caused the injury to Ms. ⁶⁵⁶ Harris’s left ureter and that Women First was liable to Ms. Harris for Dr. McMillan’s negligence. They awarded Ms. Harris $426,079.50 in damages. 5 Women First filed a timely motion for judgment notwithstanding the verdict (“JNOV”), arguing, on the same grounds raised in its motion for judgment, that the case should not have been submitted to the jury. 6 Women First requested, in the alternative, a new trial. The parties filed several memoran-da in support and opposition. The court held a hearing and issued an opinion and order denying the JNOV motion.

On appeal, Women First presents three questions, which we have rephrased as follows: 7 I. Did the trial court err by denying Women First’s motions for judgment and for JNOV?

II

Did the trial court abuse its discretion by revising Ms. Harris’s motion to dismiss Dr. McMillan to be “without prejudice” rather than “with prejudice”?

III

Did the trial court err by permitting Ms. Harris to call Dr. Karr as a hybrid fact and expert rebuttal witness? We answer these questions in the negative and shall affirm the judgment of the circuit court. ⁶⁵⁷ DISCUSSION I. Women First contends Ms. Harris’s dismissal with prejudice of her negligence claim against Dr. McMillan discharged any vicarious liability of Women First, as a matter of law. It argues that, in Maryland, a voluntary dismissal with prejudice is an “adjudication [up]on the merits” in favor of the party being dismissed, and when that party is an employee, the dismissal precludes respondeat superior liability on the part of the employer. Therefore, Ms. Harris’s voluntary dismissal of her claim against Dr. McMillan with prejudice foreclosed her claim against Women First, regardless of whether Ms. Harris intended that effect, and the court erred in denying its motions for judgment and JNOV.

Ms. Harris responds that when there is no claim of independent liability on the part of the employer, but only of liability under respondeat superior based on the employee’s wrongdoing, a dismissal with prejudice of the claim against the employee without a settlement or exchange of consideration is not a release of claims or an adjudication upon the merits and therefore does not foreclose the plaintiffs claim against the employer. Whether the court erred in denying Women First’s motions for judgment and JNOV is a question of law that we review de novo. Walter v. Gunter, 367 Md. 386, 392 , 788 A.2d 609 (2002) (“[WJhere the order involves an interpretation and application of Maryland statutory and case law, [the appellate court] must determine whether the lower court’s conclusions are ‘legally correct’ under a de novo standard of review.”). Under the doctrine of respondeat superior, an employer is vicariously liable for a tort committed by its employee while acting within the scope of his employment: Respondeat superior, or vicarious liability as it is also known, is a principle of tort law which “means that, by reason of some relationship existing between A and B, the negligence of A is to be charged against B, although B has ⁶⁵⁸ played no part in it, has done nothing whatever to aid or encourage it, or indeed has done all that he possibly can to prevent it.” James v. Prince George’s Cty, 288 Md. 315, 332 , 418 A.2d 1173 (1980), superseded by statute on other grounds, as recognized in Prince George’s Cty v. Fitzhugh, 308 Md. 384 , 519 A.2d 1285 (1987) (quoting W. Prosser, Handbook of the Law of Torts § 69, at 458 (4th ed. 1971)).

As we explained in Rivera v. Prince George’s County Health Department, 102 Md.App. 456, 475-76 , 649 A.2d 1212 (1994), “[v]icarious liability is ... the attribution of a wrongdoer’s actions to an innocent third party by virtue of the relationship between the wrongdoer and the third party” so that, upon a showing of agency, there is not one, but two, sources of recovery. It is settled law in Maryland that a plaintiff may sue an employer in tort based on the wrongful conduct of the employee, under respondeat superior, without suing the employee. Blaen Avon Coal Co. v. McCulloh, 59 Md. 403, 418 (1883) (stating that when agent commits tort while acting within the scope of his employment, “he and his employer may be sued separately or jointly, at the election of the injured party”); see also Southern Mgmt. Corp. v. Taha, 378 Md. 461, 482 , 836 A.2d 627 (2003).

In other words, the employee is not a necessary party. In the suit against the employer, the plaintiff need only prove that the employee committed the tort and did so while acting within the scope of his employment to establish the employer’s liability. Taha, 378 Md. at 481-82 , 836 A.2d 627 Thus far, the Maryland appellate courts have recognized two situations in which the resolution of a tort claim against an employee acting within the scope of his employment will preclude respondeat superior liability on the part of the employer: exoneration of the employee, Southern Management Corp. v. Taha, supra; and release of the employee, Anne Arundel Medical Center, Inc. v. Condon, 102 Md.App. 408 , 649 A.2d 1189 (1994). In Taha , the plaintiff sued two employees of Southern Management Corporation (“SMC”) for malicious prosecution ⁶⁵⁹ and also sued SMC based solely on respondeat superior.

A jury returned a special verdict in favor of the employees, finding that they did not commit the alleged wrong, but against SMC. The case reached the Court of Appeals, which reversed, holding that the verdict against SMC “[could not] stand” because it was “irreconcilably inconsistent” with liability under the doctrine of respondeat superior. Id. at 479, 836 A.2d 627 . The Court explained that “a corporation without the capacity to exercise judgment” cannot be held liable based on respondeat superior “without evidentiary proof that one of its employees, acting within the scope of that person’s employment duties, engaged in conduct sufficient to form a prima facie case of [the alleged tort].” Id. at 481 , 836 A.2d 627 (citing DiPino v. Davis, 354 Md. 18, 48 , 729 A.2d 354 (1999), for the proposition that “where liability is derivative, ‘recovery may not be had against the entity if the employee is found not to be liable or is released’ ”). “[W]hen the jury has exonerated the co-defendant employees whose conduct was alleged to be the sole basis of the claim for liability[,]” the employer cannot be held liable vicariously.

Id. at 486, 836 A.2d 627 (additional citations omitted). In Condon , the plaintiff filed suit against a pathologist and the hospital that employed him, alleging that by negligently misreading tissue samples the pathologist failed to diagnose her breast cancer. Her claim against the hospital was based solely on respondeat superior. On the eve of trial, she entered into a settlement with the pathologist, executing a release of all claims against him in consideration for the payment of $1 million dollars. 8 The release stated that it was not intended to release the plaintiffs claim against the hospital.

The hospital, which did not consent to the settlement or the release, promptly moved for summary judgment, arguing that by operation of law the release of the plaintiffs claim against the pathologist released her vicarious liability claim against the ⁶⁶⁰ hospital. The court denied the motion, and the case was tried against the hospital, resulting in a jury verdict for Condon. The hospital appealed and we reversed. We explained that under the common law of agency, which prevails in Maryland, the release of an agent discharges his principal from liability.

Condon, 102 Md.App. at 414 , 649 A.2d 1189 . Also under the common law, when two or more tortfeasors jointly cause an injury to a plaintiff, the release of one joint tortfeasor releases them all. The latter common law rule has been superseded by the Maryland Uniform Contribution Among Tort-feasors Act (“UCATA”), however. Md. Code (1974, 2013 Repl.

Vol.), § 3-1401 et seq. of the Courts and Judicial Proceedings Article (“CJP”). The UCATA provides that a plaintiffs release of a claim against one joint tortfeasor does not discharge the others from liability unless the release so provides, but reduces the plaintiffs claim against the remaining joint tortfea-sors. CJP § 3-1404. In deciding whether the release of the pathologist discharged the hospital from liability, we analyzed whether the defendants were joint tortfeasors, to whom the UCATA would apply, or were a principal and agent, to whom the common law of agency would apply.

We concluded that they were not joint tortfeasors, who each are “actually independently at fault for their own wrongful acts.” Condon, 102 Md.App. at 417 , 649 A.2d 1189 . The hospital did not have any independent fault— its liability was based solely on the tortious conduct of the pathologist, with which it was in an agency relationship—and so they were a principal and agent. Id. at 416 , 649 A.2d 1189 . See also Chilcote v. Von Der Ahe Van Lines, 300 Md. 106, 114 , 476 A.2d 204 (1984) (“[WJhere the liability of the master is vicarious, master and servant comprise but one ‘pro rata share’ ” for purposes of the UCATA.). “Absent independent wrongdoing by the principal, the release of an agent will also release the principal as a matter of law[,]” for, in that scenario, the release of the agent “removes the only basis for imputing liability to the principal.” Condon, 102 Md.App. at 421 , 649 A.2d 1189 .

We explained: ⁶⁶¹ To hold otherwise would undermine the stated purpose underlying UCATA of promoting settlements among joint tortfeasors. See Lahocki v. Contee Sand & Gravel Co., 41 Md.App. 579, 620 , 398 A.2d 490 (1979), rev’d on other grounds sub nom. General Motors Corp. v. Lahocki, 286 Md. 714 , 410 A.2d 1039 (1980). It is unlikely that an agent would ever settle with a plaintiff if he still remained liable to indemnify his principal for any further amount the principal might be compelled to pay to the plaintiff....

If a plaintiff, under such a hypothetical legal scheme, were able to find an agent willing to settle, to allow the plaintiff to then proceed additionally against a vicariously liable principal would, in essence, permit the plaintiff “two bites out of the apple.” If the principal could then seek indemnity from the agent, the agent’s earlier settlement would be of little solace to him. Such a double exposure would act as a disincentive for agents ever to agree to a settlement. Id. at 422-23, 649 A.2d 1189 . 9 Because common law agency principles dictate that the release of a claim against the employee discharges the employer’s vicarious liability for the employee’s wrongdoing, the plaintiffs release of her claim against the pathologist discharged her claim against the hospital, as a matter of law, irrespective of her intent. See also Rivera, 102 Md.App. at 477 , 649 A.2d 1212 (“[T]he release of an agent automatically release[s] the principal” under the common law, which remains unchanged in Maryland.).

In the case at bar, there was no jury trial in which Dr. McMillan was exonerated, as happened in Taha . Quite the contrary, the jury found that Dr. McMillan was negligent, and returned its verdict against Women First on that basis. And, unlike in Condon , Ms. Harris did not release her claim against Dr. McMillan, nor did she receive any consideration from Dr. McMillan for her dismissal with prejudice. The question is whether the voluntary dismissal with prejudice operated as an ⁶⁶² “adjudication upon the merits” of the negligence claim against Dr. McMillan so as to have the same effect on the solely derivative claim against Women First as an exoneration or a release.

There is no Maryland case addressing this question. Before analyzing the issue, we first review the process governing the voluntary dismissal of a claim in a civil action in the circuit court, which is set forth in Rule 2-506. 10 All or part of a claim may be voluntarily dismissed without leave of court by filing a notice, before the adverse party files an answer, or by filing a stipulation signed by all the parties to the claim. Md. Rule 2-506(a). Otherwise, a claim only may be voluntarily dismissed by order of court, and the court has discretion over whether to allow the dismissal and over the “terms and conditions” of the dismissal.

Md. Rule 2—506(c). Unless otherwise specified in the notice, stipulation, or order, a voluntary dismissal is without prejudice. Md. Rule 2—506(d). An exception exists when a party who previously has dismissed a claim without prejudice refiles the same claim and then files a second notice of dismissal.

Id. In that circumstance, the notice of dismissal “operates as an adjudication upon the merits[.]” Id. The rule does not use the phrase “with prejudice” and does not otherwise expressly address the effect of a voluntary dismissal of a claim. To support its position that Ms. Harris’s voluntary dismissal with prejudice of her claim against Dr. McMillan was an “adjudication upon the merits” of that claim, and therefore had the legal effect of discharging the respondeat superior claim against Women First, Women First relies upon this Court’s decisions in Byron Lasky & Associates v. CameronBrown Co., 33 Md.App. 231 , 364 A.2d 109 (1976), and Bryan v. State Farm Mut.

Auto. Ins., 205 Md.App. 587 , 45 A.3d 936 (2012); the Supreme Court’s decision in Semtek International ⁶⁶³ Inc. v. Lockheed Martin Corp., 531 U.S. 497 , 121 S.Ct. 1021 , 149 L.Ed.2d 32 (2001); and several federal courts of appeal decisions. In Byron Lasky, we addressed whether the circuit court was empowered to dismiss a claim with prejudice, under a predecessor to Rule 2-506, without having been asked to do so and without a hearing on the merits. General partners sued a lender for declaratory and injunctive relief to forestall foreclosure on a deed of trust.

After injunctive relief was denied, they sought court approval to voluntarily dismiss their claims without prejudice, under former Rule 582. That rule required a party to obtain leave of court to voluntarily dismiss a claim and stated that the court’s order “shall specify whether dismissal is with or without prejudice.” 33 Md.App. at 232 , 364 A.2d 109 (quoting former Md. Rule 582(a)). Over the general partners’ objection and without a hearing on the merits, the circuit court dismissed their complaint with prejudice, not without prejudice. In holding that the circuit court lacked authority to do so, we stated: “A dismissal with prejudice is a final adjudication and it is fundamental that an action can be finally adjudicated over objection of the plaintiff only after a hearing on the merits or through imposition of sanctions for default or conduct proscribed by law.” 33 Md.App. at 234 , 364 A.2d 109 (additional citations omitted).

Women First seizes upon this language, but the case is distinguishable. It did not involve tort liability or vicarious liability, and given its procedural posture, the most our comment about a “final adjudication” can be taken to mean is that the dismissal of the general partners’ claims with prejudice, precluding them from re-filing the same suit, had the same effect on them as a final adjudication of their claims. The general partners could do nothing more to pursue relief. We did not say that the dismissal with prejudice was an adjudication upon the merits of the claims that were dismissed nor did we analyze the effect, if any, the dismissal with prejudice would have on anyone else. ⁶⁶⁴ In Bryan , we were concerned with the collateral estoppel effect of a verdict and settlement in a New York case on a Maryland case that shared a common party.

A driver and passenger involved in an automobile accident sued Bryan, another driver involved in the same accident, in a New York court. The case was bifurcated and the jury returned a verdict against Bryan on liability. Before the damages phase of the trial began, the parties settled: Bryan paid $30,000, and the plaintiffs dismissed their claims with prejudice. Bryan then sued his uninsured motorist carrier in a Maryland court, claiming that the accident was caused by a phantom driver.

The carrier moved to dismiss on the basis of collateral estop-pel on the issue of liability. The circuit court granted the motion, and we affirmed. We held that the New York jury’s liability verdict against Bryan, combined with the settlement and dismissal of the claims against him with prejudice, which “operate[d] at a minimum, as a bar to further action on the same claim[,]” had preclusive effect against him in his claim against the carrier. 205 Md.App. at 603, 605 , 45 A.3d 936 . Clearly, in that case we were not addressing the effect, if any, of a voluntary dismissal with prejudice only, and in particular whether it operated as an adjudication upon the merits.

We also were not addressing vicarious liability. We were addressing the effect of an actual adjudication upon the merits on the issue of negligence resulting in a verdict, but not a judgment, followed by a settlement and dismissal with prejudice, on a later claim brought by the person whose negligence had been actually adjudicated. The case is not particularly helpful to our analysis for these reasons. The Supreme Court’s decision in Semtek, which involves res judicata, is somewhat helpful but, as we later shall explain, does not advance Women First’s position.

In Semtek, an action for inducement to breach a contract and various business torts was brought in a California state court and then was removed to a California federal district court based on diversity of citizenship. The defendant moved to dismiss on the ground that the claims were barred by California’s two-year statute of ⁶⁶⁵ limitations. The federal district court granted the motion and entered an order of involuntary dismissal, under Fed. R. Civ. Proc. 41(b), including (at the defendant’s request) language that the dismissal was “ ‘on the merits’ ” and “ ‘with prejudice.’ ” 531 U.S. at 499 , 121 S.Ct. 1021 .

Thereafter, the plaintiff brought the same claims against the same defendant in a Maryland circuit court, within Maryland’s three-year statute of limitations. The defendant moved to dismiss on the ground of res judicata, arguing that the federal district court’s involuntary dismissal of the claims was an adjudication upon the merits, which is an element of that defense. The circuit court granted the motion, and this Court affirmed. After the Court of Appeals denied a petition for writ of certiorari, the Supreme Court took the case.

The defendant advocated that Rule 41(b) gave the federal district court’s dismissal order preclusive effect. That rule provides, with certain exceptions, that unless the court orders otherwise, an involuntary dismissal “operates as an adjudication upon the merits.” 11 Fed. R. Civ. Proc. 41(b). The Supreme Court observed that in the context of res judicata, an “adjudication upon the merits” ordinarily means an adjudication that “ ‘pass[es] directly on the substance of [a particular] claim’ before the court.” 531 U.S. at 501-02 , 121 S.Ct. 1021 (quoting Restatement (Second) of Judgments § 19, Comment a, at 161 (1980)).

The meaning of “adjudication upon the merits” has gradually changed with time, however, often being applied to judgments that do not pass on the merits. For example, the Court noted, the involuntary dismissal of a claim in one state court on the ground of that state’s statute of limitations usually does not have preclusive effect when the same claim is brought in another state court that has a different statute of limitations. In ascertaining the meaning of “adjudication upon the merits,” the Court looked to Rule 41(a), which governs voluntary ⁶⁶⁶ dismissals. That rule “makes clear that an ‘adjudication upon the merits’ is the opposite of a ‘dismissal without prejudice^]’ ” Id. at 505, 121 S.Ct. 1021 .

(Neither Rule 41(a) nor Rule 41(b) uses the “with prejudice” nomenclature.) The Court determined that the “primary meaning of ‘dismissal without prejudice’ ” in Rule 41(a) “is dismissal without barring the plaintiff from returning later, to the same court, with the same underlying claim.” Id. So the only effect of the California federal district court’s involuntary dismissal of the plaintiffs claims was to bar the plaintiff from refiling those same claims in that same court. Its effect was not to operate as an adjudication upon the merits for purposes of res judicata. Ultimately, the Court decided that the claim preclusion effect of an involuntary dismissal by a federal district court sitting in diversity is a matter of federal common law; and because “state, rather than federal, substantive law is at issue there is no need for a uniform federal rule.” 531 U.S. at 508 , 121 S.Ct. 1021 .

To discourage forum shopping in the federal courts, the Court adopted “as the federally prescribed rule of decision ... the law that would be applied by state courts in the State in which the federal diversity court sits[,]” unless incompatible with federal interests. Id. at 508-09 , 121 S.Ct. 1021 . Thus, the claim preclusion effect of the California federal district court’s dismissal “ ‘upon the merits’ of [the] action on statute-of-limitations grounds is governed by a federal rule that in turn incorporates California law of claim preclusion^]” Id. at 509 , 121 S.Ct. 1021 . The Court reversed, remanding the case for the Maryland circuit court to make that decision.

For our purposes, Semtek stands for the proposition that an “adjudication upon the merits” may not have the same meaning procedurally as it does substantively. An order that is an adjudication upon the merits under Rule 41(b), so as to prevent the same plaintiff from re-filing the same claim in the same court, is not necessarily an adjudication upon the merits for preclusive effect, as an element of the substantive law of the defense of res judicata. In other words, context matters. We shall keep this in mind as we consider the cases Women First cites to support its position that the dismissal with ⁶⁶⁷ prejudice of Ms. Harris’s claim against Dr. McMillan precluded her from recovering against it based on respondeat superi- or and the cases Ms. Harris cites for the opposite position.

Women First places greatest reliance upon Harrison v. Edison Bros. Apparel Stores, Inc., 924 F.2d 530 (4th Cir. 1991). There, the plaintiff brought suit in a North Carolina state court against her former supervisor (Walls), for battery and intentional infliction of emotional distress, and against their former employer (Edison), for those torts under respon-deat superior. She also included direct claims against Edison for wrongful discharge and negligent retention.

Edison removed the case to federal court based on diversity jurisdiction. Walls filed a counterclaim for intentional infliction of emotional distress. Thereafter, the plaintiff and Walls entered into a settlement by which each agreed to voluntarily dismiss his/her claim against the other “with prejudice,” by stipulation. Edison did not know about the stipulation until it was filed.

Upon learning of it, Edison moved for summary judgment on the claims against it, arguing that the plaintiffs dismissal with prejudice of her claims against Walls precluded her from recovering against it on those claims, as any liability it could have on those claims was solely derivative. The court granted the motion as to the derivative battery and intentional infliction of emotional distress claims, but denied the motion as to the direct claim of negligent retention. It also granted a motion to dismiss the wrongful discharge claim and certified that there was no just reason to delay for purposes of appeal. The Fourth Circuit affirmed the district court’s grant of summary judgment in favor of Edison on the battery and intentional infliction of emotional distress claims.

(It reversed on the wrongful discharge claim). It reasoned that “[a] voluntary dismissal with prejudice under Fed. R. Civ. P. 41(a)(2) \i.e., by stipulation] is a complete adjudication on the merits of the dismissed claim.” Id. at 534 (additional citations omitted). “Therefore, Walls has been adjudicated not liable for battery or intentional infliction of emotional distress.” Id. (emphasis added).

Because, under the substantive law of North Carolina, ⁶⁶⁸ which applied, “[t]he exoneration of an employee/agent is fatal to a vicarious claim against an employer/principal[,]” there was no liability that could be imputed to Edison. Id. (additional citations omitted). 12 The Harrison court primarily relied upon three cases in reaching its decision. Interestingly, they all are cases in which dismissals with prejudice were given by plaintiffs in consideration for payment by settling defendants.

In Citibank, N.A. v. Data Lease Financial Corp., 904 F.2d 1498 (11th Cir. 1990), a borrower filed a counterclaim against a bank and a third party claim against seven of the bank’s directors. The counterclaim against the bank was based solely upon the alleged wrongdoing of the directors. The borrower settled its claims against the directors for $1 million dollars and dismissed them “with prejudice,” in an order entered pursuant to Rule 41(a). The bank moved for summary judgment on the borrower’s counterclaim, arguing that its only liability was derivative of the liability of the directors, and the borrower’s dismissal of its claims against the directors with prejudice was an adjudication upon the merits that barred the borrower’s counterclaim against it.

The district court agreed, and the Eleventh Circuit affirmed on appeal. Applying Florida’s substantive law of agency, that “ ‘a principal cannot be held liable if the agent is exonerated,’ ” id. at 1500 (quoting Bankers Multiple Line Ins. Co. v. Farish, 464 So.2d 530, 532 (Fla. 1985)), the court held that the “dismissal of a complaint with prejudice satisfies the requirement that there be a final judgment on the merits[,]” and therefore the voluntary dismissal with prejudice was a final adjudication of the borrower’s counterclaim against the bank. Id. at 1501. 13 ⁶⁶⁹ In Brooks v. Barbour Energy Corp., 804 F.2d 1144 (10th Cir. 1986), also relied upon by the Harrison court, the Tenth Circuit held that the voluntary dismissal with prejudice of claims by the plaintiffs, as part of a comprehensive settlement that resolved the substance of the disputed claims, was a judgment on the merits, with res judicata effect.

Finally, the Harrison court cited Schwarz v. Folloder, 767 F.2d 125, 129 (5th Cir. 1985), for the proposition that a dismissal with prejudice under Rule 41(a) is an adjudication upon the merits. The issue in that case, and in the case the Fifth Circuit quotes for that proposition—Smoot v. Fox, 340 F.2d 301, 303 (6th Cir. 1964)—was whether a trial court abused its discretion by granting a plaintiffs motion to voluntarily dismiss his claims with prejudice, not the effect of such a dismissal on others. Some state courts have held that the dismissal of a claim against a defendant is an adjudication upon the merits equal to an exoneration, so the defendant’s principal cannot be held vicariously liable, even when there has been no settlement, release, or exchange of consideration. In Law v. Verde Valley Medical Center, 217 Ariz. 92 , 170 P.3d 701 (2007), the plaintiffs decedent suffered head injuries in a fall at the defendant medical center.

The plaintiff sued two doctors for negligently failing to diagnose the decedent’s head injuries and the medical center for vicarious liability based on the tortious conduct of the two doctors and for vicarious liability based on the tortious conduct of unnamed emergency room personnel in creating the situation in which the decedent fell. Before trial, the plaintiff voluntarily dismissed both doctors with prejudice. One was dismissed in conjunction with a settlement; the other was dismissed “in the absence of any settlement payment or release.” 217 Ariz. at 96 n.2, 170 P.3d 701 . The medical center moved for summary judgment on the vicarious liability claims that were based on the doctors’ negligence, and the motion ⁶⁷⁰ was granted.

The rest of the case went to trial, and the medical center prevailed before a jury. The plaintiff appealed, arguing that the trial court erred in ruling that the dismissal with prejudice of the claims against the doctors precluded the medical center from being held vicariously liable for their negligence. The Supreme Court of Arizona affirmed, holding that because “a dismissal with prejudice” is the equivalent of a “judgment on the merits[,]” there was “no fault [on the part of the doctors] to ... impute [to] the party potentially vicariously liable[,]” i.e., the medical center. Id. at 96 , 170 P.3d 701 .

Most of the court’s discussion was an explanation of why Arizona’s UCATA was not relevant to the question of a principal’s vicarious liability for the acts of its agent. The court stated that even in the absence of a release, the dismissals with prejudice “constitute^] adjudications of non-liability on the merits” for the doctors. Id. (additional citation omitted).

See also Medeiros v. Middlesex Ins. Co., 48 Mass.App.Ct. 51 , 716 N.E.2d 1076 (1999) (holding that voluntary dismissal with prejudice of negligent misrepresentation claim against insurance agent precluded vicarious liability on the part of the insurance company principal); Barnes v. McGee, 21 N.C.App. 287, 289 , 204 S.E.2d 203 (1974) .(holding that voluntary dismissal with prejudice of negligence claim against employee, apparently without consideration of any sort, was a “judgment on the merits ... [that] precludes any action against the employer where ... the employer’s liability is purely derivative”). Cf. Sisk v. J.B. Hunt Transport, Inc., 81 P.3d 55 (Okla. 2003) (second dismissal of negligence claim against driver, which by rule prevented plaintiff from suing him again, precluded claim for vicarious liability of driver’s employer).

The issue before us is not one on which there is uniformity across the country, however. Ms. Harris cites several cases in which state courts have held that, absent a settlement in which consideration is paid, a voluntary dismissal with prejudice of an employee defendant is not an adjudication upon the merits of the claim against him so as to preclude prosecution of the same claim against the employer under respondeat superior. ⁶⁷¹ In Brosamle v. Mapco Gas Products, Inc., 427 N.W.2d 473 (Iowa 1988), the plaintiffs sued a propane gas company and its employee for injuries they sustained in a propane gas explosion. They alleged that the employee had negligently overfilled their tank and the company was liable for his negligence as his employer. When the plaintiffs realized that the employee was “essentially judgment proof,” they dismissed their claim against him without prejudice. 427 N.W.2d at 474 .

The company then sought to remove the case to federal court on diversity grounds. During that attempt, which ultimately was unsuccessful, the plaintiffs agreed to voluntarily dismiss their claim against the employee with prejudice as a gesture of good faith to show they had no interest in pursuing separate litigation against him. After remand to state court, the plaintiffs filed a dismissal of the claim against the employee with prejudice. The dismissal stated the plaintiffs’ intention was not to dismiss their claims against the company-employer.

After the close of