A federal judge did not follow the rules when he seemed to penalize a plaintiff for not following the rules, the federal appeals court based in Denver ruled on Tuesday.

Robert Carraway had filed suit against State Farm Fire and Casualty Company, alleging the insurer did not properly investigate and compensate Carraway for hail damage to his Larkspur property. State Farm moved to dismiss and last year, U.S. District Court Chief Judge Philip A. Brimmer agreed Carraway’s allegations did not amount to a legal violation.

Brimmer dismissed the lawsuit with prejudice, permanently ending the case, as opposed to without prejudice, which would have allowed Carraway to refile. Brimmer did not explicitly lay out his reasoning, other than to say Carraway had asked to amend his complaint in a manner that did not comply with the court’s rules.

“The court should not have to address repeated ‘improvements’ to the complaint,” Brimmer wrote in a footnote, quoting from an appellate court decision.

Case: Carraway v. State Farm

Decided: August 22, 2023

Jurisdiction: U.S. District Court for Colorado

Ruling: 3-0 for dismissal; 2-1 for ordering further proceedings

Judges: Veronica S. Rossman (author)

Gregory A. Phillips

Michael R. Murphy (partial dissent)

On appeal, in addition to challenging the dismissal, Carraway also argued Brimmer acted unreasonably by barring him from filing a new complaint solely because he did not ask for permission properly. State Farm countered that its motion to dismiss should have put Carraway on notice that his complaint was faulty, and he was to blame for not taking the time to properly amend his allegations to make them viable.

During oral arguments before the U.S. Court of Appeals for the 10th Circuit, Judge Veronica S. Rossman first raised the possibility that Brimmer dismissed the lawsuit with prejudice as punishment for failure to follow the rules.

“Do you think the dismissal with prejudice was a sanction?” she asked Carraway’s lawyer.

“I’m not sure. Perhaps. The court did frame it as such, but I don’t know,” responded Ryan M. Watson.

In its decision, the appellate panel agreed with Brimmer’s analysis of the claims. However, from what the judges could discern, Brimmer permanently dismissed the lawsuit only because Carraway had not followed the court’s rules when asking to amend his complaint.

If that were the case, wrote Rossman in an Aug. 22 order, the decision itself did not follow the rules.

“When a district court dismisses a case with prejudice for rule violations,” she explained, “we have held it ‘must explain why it imposed the extreme sanction of dismissal.'”

Brimmer did not address the harm to State Farm from allowing Carraway to refile his complaint, the “interference with the judicial process,” any advance warnings given to Carraway, or other factors the 10th Circuit has identified as important.

“Under the circumstances, and absent further explanation or justification from the district court, this is not enough to support a dismissal of Mr. Carraway’s complaint with prejudice,” concluded Rossman for herself and Judge Gregory A. Phillips.

The panel returned the case to Brimmer with instructions to comply with the 10th Circuit’s procedures for permanently dismissing a case.

Senior Judge Michael R. Murphy disagreed that Brimmer had imposed a sanction at all, and would have upheld his order in its entirety.

The case is Carraway v. State Farm Fire and Casualty Company.