Q: I was sued last year by a former business partner. The lawsuit is absolutely frivolous and without any merit whatsoever. The former business partner has agreed to dismiss the lawsuit "without prejudice." What exactly does that mean? I have never heard of that term before, and I want to make sure that I am adequately protected.
A: It is fairly simple. When a party dismisses a lawsuit, she can either do so "with prejudice" or "without prejudice." If she dismisses it "with prejudice", she can never re-file that lawsuit against you. That, in a nutshell, is what "with prejudice" means. If, however, she dismisses the lawsuit "without prejudice", she can re-file that lawsuit at a later time providing the lawsuit is not time-barred. The same distinction holds true if the parties jointly rather than one party acting unilaterally agree to dismiss a pending lawsuit. They can either agree to dismiss it with or without prejudice. In your situation, your preference should be to insist upon a dismissal "with prejudice" to ensure this former business partner cannot re-file, at some time in the future, the lawsuit you describe as frivolous. You will want certainty and full and complete closure which, under these circumstances, only a dismissal with prejudice can provide.
