Environmental Dynamics, Inc. v. Robert Tyer & Associates, Inc. (929 F. Supp. 1212, 1996)

TABLE OF CONTENTS

I.INTRODUCTION AND BACKGROUND ....................................1217

A. Factual Background....................................................1217

B. Procedural History.....................................................1218

1. Complaint, amended complaints, and counterclaims......................1218

2. Dispositive motions and arguments of the parties........................1219

a. Tyer’s motion to dismiss ..........................................1219

b. Defendants’ March 12, 1996, motion for partial summary judgment... 1220

c. EDI’s first motion for partial summary judgment.....................1220

d. EDI’s motion to dismiss counterclaims..............................1221

e. EDI’s supplemental motion for partial summary judgment.............1222

f. EDI’s motion for summary judgment as to RTA......................1222

g. EDI’s motion for summary judgment on inequitable conduct defenses... 1222

II. LEGAL ANALYSIS.......................................................1223

A. Standards For Dispositive Motions........................................1223

1. Which circuit’s law applies? ..........................................1223

2. What standards apply to EDI’s motions to dismiss its own claims?.........1224

B. The Voluntary Dismissal Motions.........................................1226

1. Voluntary dismissal pursuant to Fed.R.Civ.P. 41(a)......................1226

2. Voluntary dismissal pursuant to Fed.R.Civ.P. 15........................1227

C. The “Alter Ego” Claim..................................................1229

1. Summary judgment standards........................................1230

2. Undisputed and disputed facts concerning the “alter ego” claim...........1232

3. Elements of an “alter ego” claim......................................1233

a. The nature of the “alter ego” cause of action.........................1234

b. “Unity” and “injustice” prongs of the “alter ego” analysis..............1234

c. “Federal common law” or “state law”? ..............................1237

d. Is there a genuine issue of material fact on the “alter ego” claim?... 1240

4. Relitigation and res judicata..........................................1240

a. Relitigation of RTA’s liability......................................1240

b. Res judicata.....................................................1241

i. Claim preclusion ..............................................1242

ii. Issue preclusion...............................................1245

D. Counterclaims .........................................................1247

1. “Reasonable apprehension” of litigation................................1247

2. Discretion to decline to hear declaratory judgment actions............... 1249

IV. CONCLUSION............................................................1250

MEMORANDUM OPINION AND ORDER REGARDING DIS-POSITIVE MOTIONS

BENNETT, District Judge.

The parties to this patent infringement litigation have filed a plethora of dispositive motions. Much of the argument of the parties involves the extent to which a jury verdict of infringement and various judicial decisions in parallel litigation in federal court in Texas should be given res judicata effect in this litigation. The present litigation was stayed during the pendency of the Texas lawsuit. However, the Texas litigation did not involve all of the present defendants. The prompt and coherent disposition of the present litigation has been further complicated by the bankruptcies of one of the corporate defendants and its sole shareholder, prompted by the adverse judgment against the corporate defendant in the Texas litigation. Although the parties have bandied about various principles of patent law and res judicata, making disposition of the motions appear as complicated as slaying Hydra, the court finds that determinative issues, for the most part, lie in other areas.

I. INTRODUCTION AND BACKGROUND

A. Factual Background

This lawsuit arises from claims of infringement of two U.S. patents for wastewater aeration equipment owned by plaintiff Environmental Dynamics, Inc. (EDI). The patents in suit are U.S. Patent No. 4,960,546 (“the ’546 patent”), for “Diffuser Mounting Arrangement for Waste Water Aeration System,” and U.S. Patent No. 4,563,277 (“the ’277 patent”), for “Apparatus for Aerating and Mixing Waste Water.” The original complaint alleged that various defendants were infringing the patents or inducing the infringement of the patents as the result of the design, manufacture, sale, and use of wastewater aeration equipment in a municipal wastewater treatment facility of the City of Mason City, Iowa (“the accused Mason City aeration equipment”). The original defendants were Robert Tyer and Associates, Inc. (“RTA”), Robert R. Tyer, individually (“Tyer”), Parsons Engineered Products, Inc. (“Parsons”), the City of Mason City, Iowa (“the City”), and Story Construction Co. (“Story”). The complaint has been twice amended, changing not only the claims asserted but the defendants against whom they are asserted.

RTA, doing business as Aeration Research Co., brought parallel litigation against EDI in United States District Court for the Southern District of Texas seeking a declaratory judgment of invalidity and non-infringement of the patents also in suit here. EDI filed counterclaims in that litigation, asserting infringement of its patents. Following summary denial of RTA’s declaratory claims and defenses of inequitable conduct, the Texas litigation proceeded to jury trial only on EDI’s infringement claims. The jury verdict was in favor of EDI and the jury awarded damages for infringement against RTA in the sum of $118,000. On March 17,1995, the Texas district court entered a final judgment awarding EDI damages of $118,000 plus post-judgment interest. Although RTA filed a Notice of Appeal three days later on March 20, 1995, RTA subsequently filed a voluntary bankruptcy petition under Chapter 7 on April 26, 1995. In light of RTA’s bankruptcy and the automatic stay in bankruptcy found in 11 U.S.C. § 362, on July 14, 1995, the Federal Circuit Court of Appeals dismissed RTA’s appeal without prejudice to its reinstatement within thirty days after the lifting of the stay or conclusion of the bankruptcy proceeding.

■ After it had obtained a judgment and RTA had declared bankruptcy, EDI sought leave of the Texas court pursuant to Fed.R.Civ.P. 15 to amend its complaint there to add Tyer as a defendant. The Texas court summarily denied that motion to amend. Owing to RTA’s bankruptcy, EDI has never recovered its judgment in the Texas litigation.

During the pendency of the dispositive motions considered here, the automatic stay in RTA’s bankruptcy was lifted, thus allowing the present litigation to proceed against RTA. However, the lifting of that bankruptcy stay was not the end of the complications to disposition of the pending motions, as Tyer then declared personal bankruptcy. Tyer’s bankruptcy has now been dismissed, so no party is currently in bankruptcy. Further factual background, including both undisputed and disputed facts, will be presented in pertinent portions of this ruling. However, the court turns first to consideration of the involved procedural history of this litigation and the arguments of the parties in their various dispositive motions.

B. Procedural History

1. Complaint, amended complaints, and counterclaims

The original complaint in this lawsuit was filed on September 7, 1993. Following answers by all parties and the court’s denial of EDI’s motion for a preliminary injunction, this action was stayed upon the agreement of the parties pending resolution of the related proceedings brought in federal court in Texas or until September 1, 1994, whichever came first.

Status reports on the Texas litigation were filed in this district during the pendency of matters in Texas federal court and no other activity occurred in this district until completion of the Texas litigation. On June 12, 1995, RTA filed a suggestion of bankruptcy in this case. On June 16, 1995, this court entered a scheduling order for discovery, designation of experts, and dispositive motions in this lawsuit. In light of the decision in the Texas litigation and RTA’s bankruptcy, EDI filed a First Amended Complaint on September 21, 1995, which was answered on October 3, 1995. A stipulation for dismissal with prejudice of all claims by EDI against defendants Story and the City was filed on January 10, 1996. EDI then obtained leave to file a Second Amended Complaint on February 20, 1996, which names only RTA, Tyer, and Parsons as defendants. Defendants Tyer and Parsons answered the amended complaint on March 11, 1996. RTA, however, remained in bankruptcy, and has made no answer to the Second Amended Complaint, although the bankruptcy stay as to it has now been lifted. It is the Second Amended Complaint and the answer and counterclaims thereto that are at issue in the various dis-positive motions presently before the court.

Count I of the Second Amended Complaint asserts patent infringement claims against the three remaining defendants. The Second Amended Complaint adds a new Count II against defendant Tyer only, seeking to hold Tyer liable for the judgment against RTA obtained in the Texas litigation. The defendants’ answer asserts affirmative defenses, including invalidity and unenforceability of the patents in suit and inequitable conduct of EDI in the prosecution of the patent applications. It also asserts three counterclaims. The first counterclaim, by defendant Tyer, seeks declaratory judgment of the invalidity, unenforceability, and non-infringement of the ’277 and ’546 patents as against “certain redesigned products recently developed by Tyer.” Answer to Second Amended Complaint, ¶ 17. The counterclaim alleges that Tyer has demanded that EDI state that the redesigned products do not infringe its patents or sue or otherwise attempt to enforce the patents against the redesigned equipment, but that EDI has refused to do either. Id. The second counterclaim, also by defendant Tyer, alleges, albeit vaguely, a controversy concerning Tyer’s “right to associate with companies that make and sell systems of the type alleged by Plaintiff herein to infringe the ’277 and ’546 patents.” Id. at ¶ 19. It is unclear what relief is requested on this counterclaim. The third counterclaim, asserted by defendant Parsons, also seeks declaratory judgment that its sales of aeration systems made by Tyer do not infringe EDI’s patents. Id. at ¶ 20. EDI has never answered the counterclaims, but instead has moved to dismiss them for failure to state a claim and for lack of subject matter jurisdiction.

At some point, the automatic stay in bankruptcy on litigation against RTA was lifted. However, on April 25, 1996, Tyer filed a notice of the filing, on April 19, 1996, of his own bankruptcy petition and Tyer therefore invoked the automatic stay in bankruptcy as to him. However, on May 30, 1996, Tyer filed a notice of the dismissal of his bankruptcy on May 28, 1996. Thus, no stay in bankruptcy currently presents any impediment to disposition of this litigation as to any party.

Although trial was at one time set in this matter for April 1, 1996, the deadlines for discovery and dispositive motions were continued past that trial date. Trial is currently reset for September 23, 1996, in Fort Dodge, Iowa. The last deadline for dispositive motions expired on June 1, 1996. On September 26, 1994, during the period of the stay pending disposition of the Texas litigation, this matter was referred to Chief Magistrate Judge John A. Jarvey for all pretrial matters, including dispositive motions, pursuant to 28 U.S.C. § 636(b)(1)(A), (B), and (C), and N.D.Ia.LR 32. However, on April 17, 1996, following the filing of some of the dispositive motions, the referral to the magistrate judge was terminated and the undersigned will therefore decide all of the pending dispositive motions.

2. Dispositive motions and arguments of the parties

There are now no less than seven dispositive motions pending in this matter. Two were filed by the defendants, and five, including one supplement asserting new grounds for a prior motion, were filed by the plaintiff. Several of the motions address the same claims or counterclaims of the parties, but from different sides or different procedural footings. As a general characterization, the dispositive motions assert that the principal areas of contention are the following: (1) whether Count II states a viable cause of action, whether if viable, the plaintiff has properly stated the claim it asserts is presented in that count, and whether either party is entitled to summary judgment on that count; (2) the viability and possible summary disposition of all or any part of defendants’ inequitable conduct defenses; (3) the viability of the defendants’ counterclaims for declaratory judgment; and (4) whether any infringement claim need be asserted against defendant RTA in this litigation. Woven through and around these issues, at least as the parties view them, are questions of the extent to which the decisions of the Texas court are res judicata here. Although the court’s identification of the determinative issues differs, the court will first consider each of the motions and at least a summary of the arguments of the parties in support of or opposition to those motions.

a. Tger’s motion to dismiss

On March 12, 1996, Tyer moved to dismiss new Count II pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim, or, in the alternative, moved for partial summary judgment on that claim. Tyer contends that Count II asserts a “novel cause of action” that seeks to substitute him as a judgment debtor on the judgment of another court against RTA on the grounds that he is the “alter ego” of the corporation. Tyer asserts that the Texas court decided and rejected this theory of liability, and therefore the claim is barred by res judicata and federal comity here, because the Texas court denied EDI’s post-judgment motion to amend its complaint to add Tyer as a defendant.

EDI asserts that there is nothing novel about a claim to hold a sole shareholder liable for the debts of his corporation under the theory that the corporation is the “alter ego” of the individual shareholder and that “piercing the corporate veil” is therefore appropriate. EDI asserts that neither res judicata nor federal comity is applicable, because the Texas court denied a Rule 15 motion to amend to add Tyer as a defendant in the Texas action after judgment had been entered against RTA. In its motion to amend, EDI requested that the amendment relate back to the filing of the original complaint. EDI sought to add Tyer as a defendant without any reference by anyone, including the court, to “alter ego” or “piercing the corporate veil.” Thus, EDI asserts, neither its claim in Count II nor the issues involved in its disposition were considered or decided by the Texas court.

Tyer counters that EDI’s claim just isn’t what EDI says it is, but is instead an attempt to have this court enter judgment of another court against him, which Tyer asserts this court cannot do.

b. Defendants’ March 12, 1996, motion for partial summary judgment

On March 12, 1996, “defendants,” presumably only Tyer and Parsons, because RTA was then subject to the stay in bankruptcy, filed another dispositive motion, seeking partial summary judgment on the issue of the materiality of certain prior art, the so-called “Nokia” and “Cal-Am” devices, relevant to their defense of inequitable conduct against infringement of the ’546 patent. The motion further seeks a bifurcation of the trial on the remaining issue of the inequitable conduct defense, intent, which is triable to the court, in the interests of economy and efficiency. The defendants contend that in a re-examination of the ’546 patent after the Texas judgment was entered, the patent examiner expressly found the prior art on which defendants rely to be material, and defendants’ own experts concur. Thus, defendants contend that the undisputed facts now demonstrate the materiality of the prior art in question.

EDI resists this motion first on the ground that the Texas court has already dismissed the inequitable conduct defense, rendering that defense res judicata. However, if the issue can be relitigated here, EDI asserts that there is, at a minimum, a genuine issue of material fact concerning the materiality of the Nokia and Cal-Am prior art, because EDI’s own experts dispute the materiality of the claimed prior art. EDI also asserts that a bifurcation of trial would increase the expense of this litigation, because its attorneys, experts, and witnesses would be required to travel to Iowa and to present evidence twice, not just once.

In their reply, the defendants assert that there is an exception to any res judicata effect of the Texas decision on materiality, because the Texas judgment was rendered before the re-examination of the ’546 patent by the Patent and Trademark Office (PTO). The defendants also assert that EDI’s efforts to escape the materiality of the Nokia and Cal-Am prior art are factually unpersuasive. Finally, as to this motion, the defendants assert that a bifurcation of proceedings will indeed result in efficiencies, because they will prevail on this defense in a bench trial on inequitable conduct, eliminating the need for a second jury trial on any other issue.

c. EDI’s first motion for partial summary judgment

The remaining five dispositive motions were filed by plaintiff EDI. On March 20, 1996, EDI filed a motion, which the court finds to be on a most peculiar procedural footing, although it seeks a most salutary end. EDI has moved “under Rule 56 of the Federal Rules of Civil Procedure for partial summary judgment dismissing the action between EDI and defendants Robert Tyer and Parsons Engineered Products, Inc., including all claims and counterclaims,” and for summary judgment on EDI’s claim to hold Tyer liable in the amount of $118,000 for the judgment debt of RTA. Plaintiff’s March 20, 1996, Motion For Partial Summary Judgment, p. 1. The court is unaware of authority under Rule 56 for a plaintiff to dismiss its own claims, but the court will explore that question later. EDI contends in this motion that RTA’s infringement of the ’277 and ’546 patents is res judicata as the result of the Texas decision, and that Tyer is in privity with RTA, as he totally dominated RTA as its sole shareholder and sole representative at trial. As to defendant Parsons and Parsons’s counterclaim, EDI asserts that there is no real dispute between the parties, because it will dismiss its claims, which were at most de minimis. Therefore, EDI asserts that there is no controversy and therefore no grounds for Parsons’s declaratory judgment claim. EDI also asserts that Parsons is being used as Tyer’s “litigating agent” to engage in procedural fencing to attack the Texas judgment, because Tyer is indemnifying Parsons in this litigation. EDI contends that Parsons is subject to mdemnitee/indemnitor estoppel. Aternatively, EDI asserts that the court should simply decline, in its discretion, to entertain Parsons’s declaratory judgment action.

In response, defendants concede that Tyer and RTA are in privity, and that the Texas litigation involved identical issues of infringement, but they contend that an exception to the doctrine of res judicata is applicable here. Tyer and RTA assert that RTA has been prevented by EDI’s procedural jockeying fi'om pursuing an appeal of the Texas judgment and that the PTO has significantly added to the prosecution history of the ’546 patent, thus warranting a new consideration of their inequitable conduct defense, pursuant to Restatement (Second) of Judgments § 28. Furthermore, Tyer asserts that genuine issues of material fact preclude summary judgment on EDI’s “alter ego” claim, because Tyer and RTA always observed all of the corporate formalities justifying limited liability of a shareholder in this case. As to EDI’s claims against Parsons, Parsons contends that dismissal is appropriate, but that its counterclaims are substantial, not de minimis, and EDI’s offer to dismiss its infringement claims is not the sort of general release eliminating grounds for a declaratory judgment action.

In its reply brief, EDI asserts that there are no applicable exceptions to res judicata Tyer can raise here. EDI asserts that there was nothing unusual about the patent reexamination, which ultimately confirmed the patentability of the invention identified in the ’546 patent. EDI specifically attacks Tyer’s contentions regarding what the examiner held were grounds for confirmation of the patent. EDI asserts that Tyer’s concession that he is in privity with RTA and that the issues involved in the litigation are identical “are all that EDI must prove to recover against Tyer.” Reply Brief Of Plaintiff On Its [March 20, 1996] Motion For Partial Summary Judgment, p. 4. EDI also contends that far from any of its actions impeding RTA’s appeal of the Texas judgment, the appeal was dismissed by the Federal Circuit Court of Appeals after the appellate court sua sponte raised the issue of the applicability of the bankruptcy stay. EDI points out that RTA could have sought to have the stay lifted in order to pursue its appeal, but never did so. Finally, as to Parsons, EDI reasserts its contention that it has no intention of suing Parsons and all claims between those two parties should be dismissed.

d. EDI’s motion to dismiss counterclaims

EDI’s next motion, filed on March 25, 1996, is to dismiss Tyer’s and Parsons’s counterclaims for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1) and, as to Tyer, for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). As to Tyer, EDI asserts first that there are no jurisdictional allegations in the counterclaims in contravention of Fed.R.Civ.P. 8(a)(1). EDI asserts that there is no actual controversy as to any “redesigned” products, because it has never charged any such infringement and has no intention of doing so, finding adequate protection in the Texas injunction enjoining Tyer from making infringing products. EDI asserts that neither Tyer’s letters to EDI demanding to be sued over the “redesigned” products nor Tyer’s “twisted” reasoning that EDI’s refusal to sue establishes the necessary ground, a reasonable apprehension of a suit for patent infringement, for Tyer’s declaratory judgment claim based on “redesigned” products. As to the second counterclaim, EDI asserts that Tyer’s allegations of interference with his right to associate with companies making or selling aeration equipment is so vague as to defy understanding. However, EDI asserts that it has never engaged in any such interference and is again satisfied that the Texas injunction means no such interference will ever be necessary. To the extent the claims relate to designs found to infringe by the Texas court, EDI asserts res judicata of those issues. As to Parsons, EDI reiterates that there is no current dispute sustaining Parson’s declaratory judgment claim.

The defendants’ resistance to this motion is not made in a separate response, but instead appears in section III of their resistance to EDI’s first summary judgment motion. However, section III of that brief addresses only the viability of Parsons’s counterclaims. Parsons accepts with alacrity EDI’s offer to dismiss EDI’s claims against Parsons, but asserts that continued uncertainty about what equipment made by Tyer it can or cannot sell justifies its own declaratory judgment claim.

EDI has filed no reply brief, presumably because it did not recognize that defendants had ever responded to the motion. Indeed, the court cannot find that Tyer has ever resisted summary judgment as to his second counterclaim, although resistances to dismissal or summary judgment on his first counterclaim are suggested in his other filings.

e. EDI’s supplemental motion for partial summary judgment

EDI’s third dispositive motion, filed May 13, 1996, is in fact a supplement to its March 20, 1996, motion for partial summary judgment to “dismiss” all claims and counterclaims between EDI and defendant Parsons. EDI asserts that, owing to Tyer’s personal bankruptcy, Tyer’s mother, rather than Tyer himself, is now financing Parsons’s participation in this lawsuit, contrary to the doctrines of maintenance and champerty.

On May 29, 1996, Parsons filed a response to the supplemental motion, and on May 30, 1996, filed an amendment to that supplemental response. Parsons contends that financing of its participation in this litigation by Tyer’s mother was only a temporary, unusual result of Tyer’s bankruptcy and his undertaking to indemnify Parsons, but that the arrangement in question has now ended, as Tyer is no longer in bankruptcy.

f. EDFs motion for summary judgment as to RTA

EDI’s fourth dispositive motion, filed May 16, 1996, is a long-promised motion for summary judgment against defendant RTA upon RTA’s emergence from the protection of the bankruptcy stay. This motion, like EDI’s prior motion for partial summary judgment against Tyer and Parsons, seeks to “dismiss” all claims and counterclaims between EDI and RTA. However, whatever the peculiarity of the procedural footing of the motion, EDI asserts that any claims as between these two parties were fully litigated in Texas federal court, presenting a “textbook” case of res judicata.

RTA has responded to the motion, which it describes as a “housekeeping” measure, asserting that its dismissal from the litigation will simplify things, but contending, in the alternative, that it is entitled to an exception to res judicata for the same reasons Tyer has asserted any patent infringement claims as to him fall within an exception. In other words, RTA also asserts that unusual circumstances warrant revisiting RTA’s assertions of inequitable conduct as barring EDI’s claims of infringement.

g.EDFs motion for summary judgment on inequitable conduct defenses

Finally, EDI has moved for partial summary judgment “dismissing” RTA’s and Parsons’s “inequitable conduct” defenses. EDI asserts that such a defense was rejected in the Texas action and is therefore res judicata. Furthermore, EDI asserts that the allegedly material prior art not disclosed in prosecution of the patents, the “Nokia” and “Cal-Am” prior art in the case of the ’546 patent, and the “Air-Aqua” prior art in the ease of the ’277 patent, were not material, but merely cumulative of prior art references disclosed in prosecution of the patent applications.

Defendants filed a resistance to EDI’s motion for summary judgment on defendants’ inequitable conduct defenses, asserting a genuine issue of material fact as to the materiality of the “Air-Aqua” prior art to the ’277 patent. The materiality of the “Air-Aqua” prior art, they assert, is established by the declarations of two of their experts. Defendants assert that Tyer and Parsons are ready to litigate the issue of inequitable conduct, but that RTA should be dismissed from this litigation as a “housekeeping” matter. In a short reply brief, EDI reaffirms its position that the inequitable conduct issues are res judicata and should not be relitigated here. EDI also asserts that the underlying patent claim is also res judicata as to Tyer, because he was in privity with RTA, so that the patent claims should be dismissed as moot in light of the prior Texas action.

No party has requested a hearing on any of these dispositive motions. Although these arguments suggest that disposition of the motions is a complicated matter, involving consideration of several issues of patent law and subtle applications of the doctrine of res judicata, the court finds that, ultimately, the motions may all be disposed of on relatively uncomplicated grounds, once procedural irregularities are sorted out.

II. LEGAL ANALYSIS

A. Standards For Dispositive Motions

The parties’ dispositive motions are brought as motions to dismiss, for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6) and for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1), and as motions for partial summary judgment, pursuant to Fed.R.Civ.P. 56. Some of EDI’s motions seek dismissal of some of EDI’s own claims, which the court finds cannot be brought on the procedural footing asserted by EDI, i.e., pursuant to Rule 56. Therefore, the court must discover the proper procedural footing and applicable standards for such voluntary dismissal motions. Furthermore, because this is a patent infringement case, and any appeal will therefore be taken to the Federal Circuit Court of Appeals, the first question the court must answer is, which circuit’s law establishes the standards for these dispositive motions?

1. Which circuit’s law applies?

In answer to this initial question, the Federal Circuit Court of Appeals has repeatedly held that if issues are not unique to its exclusive jurisdiction, it will defer to the law of the regional circuit in which the district court sits. See, e.g., Elmer v. ICC Fabricating, Inc., 67 F.3d 1571, 1578 (Fed.Cir.1995) (trade dress issues called for application of regional circuit’s law, i.e., Eleventh Circuit law); Imagineering, Inc. v. Van Klassens, Inc., 53 F.3d 1260, 1263 (Fed.Cir.) (same), cert. denied, — U.S.-, 116 S.Ct. 277, 133 L.Ed.2d 197 (1995); Tone Bros., Inc. v. Sysco Corp., 28 F.3d 1192, 1200 (Fed.Cir.1994) (Lanham Act claims called for application of Eighth Circuit law), cert. denied, — U.S. -, 115 S.Ct. 1356, 131 L.Ed.2d 214 (1995); Mars, Inc. v. Kabushiki-Kaisha Nippon Conlux, 24 F.3d 1368, 1371 (Fed.Cir.1994); Jurgens v. McKasy, 927 F.2d 1552, 1563 n. 6 (Fed.Cir.) (applying Eighth Circuit law to issues of unfair competition over which Federal Circuit did not have exclusive jurisdiction), cert. denied, 502 U.S. 902, 112 S.Ct. 281, 116 L.Ed.2d 232 (1991).

In Mars, Inc., the Federal Circuit Court of Appeals clarified when deference to the regional circuit’s law is appropriate and when it is not:

When an issue before us pertains to a matter not unique to our exclusive appellate jurisdiction, our established practice has been to defer to the discernable law of the regional circuit in which the district court sits. Such deference, however, is inappropriate when an issue involves substantive questions coming exclusively within our jurisdiction, the disposition of which •would have a direct bearing on the outcome.

In this case, review of the propriety of the district court’s dismissal for lack of jurisdiction necessarily requires consideration of facts and resolution of legal principles that bear an essential relationship to matters committed to our exclusive control. The issue whether the district court had jurisdiction to hear Mars’ claim of Japanese patent infringement is of importance to the development of the patent law and is clearly a matter that falls within the exclusive subject matter responsibility of this court. Thus, we are not bound by the law of the [regional] circuit in deciding this case. Notwithstanding that conclusion, “[w]e may, of course, look for guidance in the decisions of the [regional circuit], as well as those of other courts.

Mars, Inc., 24 F.3d at 1371 (internal citations and quotation marks omitted). However, a prior decision makes clear that Federal Circuit law is not necessarily applicable to any subject matter jurisdiction challenge in a patent case. See Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1580 (Fed.Cir.1993) (dismissal pursuant to Fed.R.Civ.P. 12(b)(1) on “ripeness” grounds required application of regional circuit’s law, because Federal Circuit law governs review of a decision to dismiss a patent infringement suit only when justiciability of the controversy is not in question), cert. denied, — U.S. -, 114 S.Ct. 2738, 129 L.Ed.2d 859 (1994). Nor is a simple dichotomy between “procedural matters,” governed by the regional circuit’s law, and “substantive matters,” governed by Federal Circuit law, appropriate, because even “procedural” matters may involve questions that fall within the Federal Circuit’s exclusive jurisdiction. See, e.g., Broyhill Furniture Indus., Inc. v. Craftmaster Furniture Corp., 12 F.3d 1080, 1082 (Fed.Cir.1993) (a Rule 60(b) is generally considered under the law of the regional circuit, “because such rulings commonly involve procedural matters that are not unique to patent law,” but the Federal Circuit applied its own law in this ease, “because our review of the district court’s Rule 60(b) ruling turns on substantive matters that are unique to patent law”); Payless Shoesource, Inc. v. Reebok Int'l, Ltd., 998 F.2d 985, 987 (Fed.Cir.1993) (“As a general rule, we review procedural matters under the law of the regional circuit in which the district court sits,” and “[additionally, we defer to the law of the regional circuit when addressing substantive legal issues over which we do not have exclusive subject matter jurisdiction,” and applying Tenth Circuit law to issuance of a preliminary injunction in a trademark ease); Wang Labs., Inc. v. Applied Computer Sciences, Inc., 958 F.2d 355, 357 (Fed.Cir.1992) (generally, on procedural matters, the Federal Circuit follows the law of the regional circuit, but it will not do so on issues of its own appellate jurisdiction, although it may look for guidance to the law of the regional circuit). Rather, the test, as stated in Mars, Inc., is whether the question presented “necessarily requires consideration of facts and resolution of legal principles that bear an essential relationship to matters committed to [the Federal Circuit’s] exclusive control.” Mars, Inc., 24 F.3d at 1371.

2. What standards apply to EDI’s motions to dismiss its own claims?

The court has observed that EDI’s motions for “summary judgment” seeking to “dismiss” its own claims do not appear to be authorized by any reading this court can give the rule of civil procedure upon which they are based, Fed.R.Civ.P. 56. Furthermore, although EDI’s motions for “summary judgment” seek to “dismiss” “all” claims and counterclaims between itself and the three defendants, it is clear from EDI’s “summary judgment” motion regarding Tyer that EDI seeks not dismissal, but summary adjudication in its favor of its “alter ego” claim against Tyer stated in new Count II. Thus, EDI seeks dismissal of some, but not all claims in this lawsuit, although it does seek to dismiss all claims against two defendants, Parsons and RTA. This court must therefore determine what authority provides for the plaintiff’s voluntary dismissal of all its own claims against particular defendants. Furthermore, the court must determine what authority provides for the plaintiffs voluntary dismissal of fewer than all of its claims against any one defendant.

The proper procedural footing for voluntary dismissal appears to be a purely procedural matter that in no way “necessarily requires consideration of facts and resolution of legal principles that bear an essential relationship to matters committed to [the Federal Circuit’s] exclusive control.” Mars, Inc., 24 F.3d at 1371. This court can therefore properly be guided by the decisions of the regional circuit in which it sits, the Eighth Circuit. Id. Nonetheless, the court finds that guidance on this question comes, in the first instance, from the Federal Circuit Court of Appeals.

Although one federal rule of civil procedure, Fed.R.Civ.P. 41, specifically provides for voluntary dismissals, in Gronholz v. Sears, Roebuck and Co., 836 F.2d 515 (Fed. Cir.1987), the Federal Circuit Court of Appeals noted that Rule 41(a) refers to dismissal of an “action,” not to dismissal of a “claim.” Gronholz, 836 F.2d at 517. The court noted that the reference to “action” in Rule 41(a)(1) and (2) contrasts with the reference to “an action or of any claim” in Rule 41(b). Id. at 518 (citing Smith Kline & French Labs. v. A.H. Robins Co., 61 F.R.D. 24, 25-29 (E.D.Pa.1973)). The court embraced the analysis of various courts holding that when Rule 41(a) refers to dismissal of an “action,” there is no reason to suppose that the term is intended to include the separate claims which make up an action, because when dismissal of a claim is intended, as in Rule 41(b), the concept is spelled out in the plain language of the rule. Id. (citing cases so holding). The Gronholz court quoted the following from Management Investors v. United Mine Workers, 610 F.2d 384, 394-95 (6th Cir.1979):

But while often dubbed a Rule 41(a) voluntary dismissal, the procedure [whereby a court grants plaintiffs motion to dismiss one count of a multi-count complaint] is more properly viewed as a Rule 15 amendment to the complaint.

Gronholz, 836 F.2d at 518. The court found that the procedural footing of the motion could make a difference, as dismissal of all federal claims by Rule 15 amendment could deprive a federal court of jurisdiction over the action, or deprive the Federal Circuit Court of Appeals of appellate jurisdiction. Id. Whatever the effect of a voluntary “dismissal” of less than all claims, the court held that such a dismissal “constituted an amendment of [the plaintiffs] complaint.” Id.

The Eighth Circuit Court of Appeals, which states the law of the regional circuit in which this court sits, appears never to have embraced or rejected the distinction stated in Gronholz. However, courts of other regional circuits have since used similar reasoning to conclude that Rule 41(a) does not provide for the voluntary dismissal of less than all claims against any defendant. In Gobbo Farms & Orchards v. Poole Chem. Co., Inc., 81 F.3d 122 (10th Cir.1996), the Tenth Circuit Court of Appeals very recently made the same distinction:

[Rule 41(a) ] speaks to dismissal of an action, not just a claim within an action. [Plaintiff] offers no authority, and we have found none, to support its contention that Rule 41(a) applies to dismissal of less than all claims in an action In fact, other circuits and at least one district court in this circuit have specifically held to the contrary. See Ethridge v. Harbor House Restaurant, 861 F.2d 1389, 1392 (9th Cir.1988); Management Investors v. United Mine Workers, 610 F.2d 384, 394 n. 22 (6th Cir.1979); Exxon Corp. v. Maryland Casualty Co., 599 F.2d 659, 662 (5th Cir.1979); In Re Wyoming Tight Sands Anti Trust Cases, 128 F.R.D. 121, 123 (D.Kan.1989).

Gobbo Farms, 81 F.3d at 123. Similarly, the Ninth Circuit Court of Appeals recently reaffirmed that “Rule 15, not Rule 41(a) governs the situation when a party dismisses some, but not all, of its claims.” General Signal Corp. v. MCI Telecommunications Corp., 66 F.3d 1500, 1513 (9th Cir.1995) (citing Ethridge, 861 F.2d at 1392, as well as Gronholz and Management Investors), cert. denied, — U.S. -, 116 S.Ct. 1017, 134 L.Ed.2d 97 (1996). In Ethridge, the Ninth Circuit Court of Appeals wrote that “we agree with those courts that have held a plaintiff may not use Rule 41(a)(1)® to dismiss, unilaterally, a single claim from a multi-claim complaint.” Ethridge, 861 F.2d at 1392 (citing, inter alia, Management Investors and Exxon Corp.). The court in Ethridge developed further the proper basis for the voluntary dismissal of less than all claims:

Each of these cases relies on the Moore treatise on federal procedure, which convincingly argues that Federal Rule of Civil Procedure 15(a) is the appropriate mechanism “[w]here a plaintiff desires to eliminate an issue, or one or more but less than all of several claims, but without dismissing as to any of the defendants.” 5 J. Moore, J. Lucas & J. Wicker, Moore’s Federal Practice ¶ 41.06-1, at 41-83 to -84 (1987). The eases relied on by Ethridge are not to the contrary because they either involve the use of Rule 41 to effect a complete dismissal as to all defendants, see, e.g., Miller v. Reddin, 422 F.2d 1264, 1266 (9th Cir.1970), or a partial dismissal of all claims against one codefendant, see, e.g., Brown v. Texas & Pac. R.R., 392 F.Supp. 1120 (W.D.La.1975).

Ethridge, 861 F.2d at 1392. As did the court in Ethridge, courts to consider the question have generally concluded that Rule 41(a) permits voluntary dismissal of all claims against a particular defendant in a multi-defendant action. See, e.g., Pedrina v. Chun, 987 F.2d 608, 609 & n. 1 (9th Cir.1993) (holding that “Rule 41(a)(1) allows a plaintiff to dismiss without a court order any defendant who has yet to serve an answer or a motion for summary judgment” because “[permitting a plaintiff to dismiss fewer than all of the named defendants is consistent with th[e] purpose” of the rule to allow “disengagement” at the early stages of a suit). The court in Pedrina noted a split in the circuits on the question, and found that the Eighth Circuit Court of Appeals, this court’s regional circuit, was on the side of the split approving use of Rule 41(a) to dismiss less than all defendants from an action, citing Johnston v. Cartwright, 355 F.2d 32, 39 (8th Cir.1966). Pedrina, 987 F.2d at 609. However, only the Second Circuit Court of Appeals appeared to view Rule 41(a) as requiring dismissal of an entire controversy, not just some of the defendants in it, and that circuit had not considered the question recently. Id. (citing as the dissenting decision Harvey Aluminum, Inc. v. American Cyanamid Co., 203 F.2d 105, 108 (2d Cir.), cert. denied, 345 U.S. 964, 73 S.Ct. 949, 97 L.Ed. 1383 (1953)). The conclusion that Rule 41 permits dismissal of some but not all defendants from the lawsuit, this court observes, is reconcilable with the language of the rule, because an entire “action” against a particular defendant is voluntarily dismissed, not just some of the claims against that defendant. FedR.Civ.P. 41(a)(1) and (2) (referring only to “an action,” not to “a claim” or “claims”); but see Concha v. London, 62 F.3d 1493, 1506 (9th Cir.1995) (stating in dicta that “[T]he plaintiff may dismiss either some or all of the defendants — or some or all of his claims — through a Rule 41(a)(1) notice,” citing Pedrina, 987 F.2d at 609).

On the strength of these authorities and the reasoning upon which they rely, this court concludes that the proper procedural footing for EDI’s motions to “dismiss” all of its own claims against defendants Parsons and RTA is not Rule 56, but Rule 41(a)(2). However, the authority for the dismissal of one of two claims against defendant Tyer is neither Rule 56 nor Rule 41(a)(2), but Rule 15.

B. The Voluntary Dismissal Motions

Having established the procedural footing of EDI’s motions for voluntary dismissal, the court must next determine the standards applicable to those motions and their proper disposition. Motions for voluntary dismissal pursuant to Rule 41(a) and for leave to amend pursuant to Rule 15 are both consigned to the court’s sound discretion, but the standards for each kind of motion bear discussion here.

1. Voluntary dismissal pursuant to Fed.R.Civ.P. 41(a)

Because answers have been received and no stipulation for dismissal signed by all parties has been presented, voluntary dismissal of all claims against Parsons and RTA must be sought pursuant to Fed. R.Civ.P. 41(a)(2), and requires the leave of the court. FedR.Civ.P. 41(a)(1) and (2). Furthermore, the dismissal, if granted, shall be “upon such terms and conditions as the court deems proper.” FedR.Civ.P. 41(a)(2). A district court’s decision on a Rule 41(a)(2) motion will be reversed only if the appellate court finds that the district court abused its discretion. Metropolitan Fed. Bank of Iowa v. W.R. Grace & Co., 999 F.2d 1257, 1262 (8th Cir.1993). Granting voluntary dismissal is not an abuse of discretion simply because the opposing party has a summary judgment motion pending, although that is a factor the court may take into account in ruling on the motion for voluntary dismissal. Id. Instead, the court must be concerned that the voluntary dismissal impose no legal prejudice on any party. Id. at 1262-63.

The court finds no legal prejudice here, and RTA and Parsons have asserted none, instead embracing the offer of dismissal of the claims against them. The pendency of defendant Parsons’s counterclaim in this case is not affected by voluntary dismissal of the underlying claims, because, pursuant to Fed.R.Civ.P. 41(a)(2), a counterclaim that can remain pending for independent adjudication poses no impediment to voluntary dismissal of the underlying claims. Furthermore, the assertions of new evidence undercutting decisions of the Texas court on defenses to infringement may properly be brought to the attention of the Texas court by motions by RTA for relief from the judgment. Thus, no prejudice to any party is apparent. Indeed, far from causing prejudice to any party, all parties will benefit from the clarification and narrowing of issues for trial in this matter as the result of the dismissal of claims following disposition of the parallel Texas litigation.

The Eighth Circuit Court of Appeals recently offered the following observations concerning whether dismissal pursuant to this rule is with or without prejudice:

Under Rule 41(a)(2), dismissals sought by the plaintiff are without prejudice unless the district court’s order specifies otherwise. Thus, Rule 41(a)(2) implicitly permits the district court to dismiss an action with prejudice in response to a plaintiffs motion for dismissal without prejudice. When a plaintiff requests dismissal without prejudice and the district court intends to dismiss with prejudice, however, the district court must give the plaintiff notice of its intention and a chance to withdraw the request and proceed with litigation.

Jaramillo v. Burkhart, 59 F.3d 78, 79 (8th Cir.1995) (internal citations omitted). In this ease, however, EDI has expressly stated that it intends dismissal with prejudice of its claims against Parsons and RTA, in the former case, because its claims against Parsons were at best de minimis and, in the case of both defendants, because it perceives adequate protection can be obtained under EDI’s Texas injunction. The dismissal of all claims against RTA and Parsons here therefore will be with prejudice at the request of the plaintiff. The court holds that plaintiff EDI’s motions for partial “summary judgment” identified in subsections I.B.2.C. and f., and here construed as motions for voluntary dismissal pursuant to Fed.R.Civ.P. 41(a)(2), are granted as to defendants RTA and Parsons and all claims against RTA and Parsons are dismissed with prejudice. ■ EDI’s supplement to the motion for summary judgment against Parsons, identified in subsection I.B.2.e., is denied as moot, because of the granting of the principal summary judgment motion identified in subsection I.B.2.C.

As a further consequence of dismissal of all claims as to Parsons and RTA, other motions of the parties are also mooted. The dismissal of all claims against Parsons and RTA moots their affirmative defenses to those claims. Therefore, the defendants’ March 12, 1996, motion for partial summary judgment on the inequitable conduct defense and for bifurcation of trial on inequitable conduct issues, identified in subsection I.B.2.b. of this ruling, is denied as moot as to defendant Parsons and, to the extent RTA ever adopted that motion upon emergence from the stay in bankruptcy, as to defendant RTA. Similarly, EDI’s last dispositive motion, its motion for partial summary judgment on the inequitable conduct defenses, identified in subsection I.B.2.g. of this ruling, is also denied as moot as to defendants Parsons and RTA.

2. Voluntary dismissal pursuant to Fed.R.Civ.P. 15

As the court observed above, EDI’s motions for partial summary judgment “dismissing” some, but not all, of its claims against defendant Tyer must be construed as having been brought not pursuant to Fed. R.Civ.P. 41(a)(2), but pursuant to Fed. R.Civ.P. 15. General Signal Corp., 66 F.3d at 1513; Ethridge, 861 F.2d at 1392; Gronholz, 836 F.2d at 518. Because the court does not perceive that EDI’s motion, construed as a motion to amend, to drop the patent infringement claim against defendant Tyer and to add a new, non-patent claim, whatever that claim may otherwise be, “necessarily requires consideration of facts and resolution of legal principles that bear an essential relationship to matters committed to [the Federal Circuit’s] exclusive control,” Mars, Inc., 24 F.3d at 1371, the law of the regional circuit in which this court sits, the Eighth Circuit, states the appropriate standards for amendment.

The Federal Rules of Civil Procedure, provide that, except in circumstances not present here, “a party may amend the party’s pleading only by leave of court or by written consent of the adverse party; and leave, shall be freely given when justice so requires.” Fed.R.Civ.P. 15(a). The Supreme Court has stated that the granting of leave to amend is within the discretion of the district court. Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330, 91 S.Ct. 795, 802, 28 L.Ed.2d 77 (1971). Federal courts have generally and consistently recognized that the rules governing the amendments of pleadings are to be construed liberally. Standard Title Ins. Co. v. Roberts, 349 F.2d 613, 622 (8th Cir.1965). The leave sought should be “freely given” in the absence of any justifiable reason for denial of the motion — such as undue delay, bad faith or dilatory motive, repeated - failure to cure deficiencies by amendments previously allowed, undue prejudice to the defendant or futility of the amendment.. Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962).

In interpreting the liberal policy underlying motions to amend pursuant to Fed. R.Civ.P. 15(a), the United States Court of Appeals for the Eighth Circuit has used terms nearly identical to those used by the Supreme Court in the Foman decision, stating that

[u]nder this policy, only limited circumstances justify a district court’s refusal to grant leave to amend pleadings; undue delay, bad faith on the part of the moving party, futility of the amendment or unfair prejudice to the opposing party.... This court will review the district court’s refusal to grant leave to amend under the abuse of discretion standard. Norbeck v. Davenport Community School District, 545 F.2d 63, 70 (8th Cir.1976), cert. denied, 431 U.S. 917, 97 S.Ct. 2179, 53 L.Ed.2d 227 (1977).

Sanders v. Clemco Indus., 823 F.2d 214, 216 (8th Cir.1987) (citation omitted); see also Wald v. Southwestern Bell Corp. Customcare Medical Plan, 83 F.3d 1002 (8th Cir.1996) (stating thát leave to amend should be “freely granted,” but that leave may be denied if the amendment would be “futile”); Frey v. City of Herculaneum, Mo., 44 F.3d 667, 672 (8th Cir.1995) (stating that leave to amend should be “granted liberally when ‘justice so requires,’ ” quoting Williams v. Town of Okoboji, 606 F.2d 812, 814 (8th Cir.1979)); Gamma-10 Plastics, Inc. v. American President Lines, Ltd., 32 F.3d 1244, 1255 (8th Cir.1994) (citing Foman for the applicable standards), cert. denied, — U.S.-, 115 S.Ct. 1270, 131 L.Ed.2d 148 (1995); Fuller v. Secretary of Defense of U.S., 30 F.3d 86, 88 (8th Cir.) (“Leave to amend should be granted absent a good reason for the denial, such as ‘undue delay, bad faith, undue prejudice to the nonmoving party, or futility,” citing Thompson-El v. Jones, 876 F.2d 66, 67 (8th Cir.1989)), cert. denied, — U.S. -, 115 S.Ct. 583, 130 L.Ed.2d 497 (1994); Williams v. Little Rock Mun. Water Works, 21 F.3d 218, 225 (8th Cir.1994) (“Good reason to deny leave to amend exists if the amendment would be futile,” citing Foman, 371 U.S. at 182, 83 S.Ct. at 230, and Thompson-El, 876 F.2d at 67); Costello, Porter, Hill, Heisterkamp & Bushnell v. Providers Fidelity Life Ins. Co., 958 F.2d 836, 839 (8th Cir.1992); Standard Title, 349 F.2d at 622.

With these standards in mind, the court finds that EDI’s amendment dismissing its patent infringement claim against Tyer is not the result of any “undue delay.” Foman, 371 U.S. at 182, 83 S.Ct. at 230; Fuller, 30 F.3d at 88; Sanders, 823 F.2d at 216. Rather, the court finds the motion to be timely, as filed prior to the dispositive motion deadline, and timely as narrowing and clarifying the issues for trial several months before trial is scheduled to begin. Nor can the court find any prejudice to defendant Tyer in the dismissal of the patent infringement claim against him. Id.; Fuller, 30 F.3d at 88; Sanders, 823 F.2d at 216. As the court observed when it considered any prejudice to defendants Parsons and RTA, the pendency of defendant Tyer’s counterclaim in this case is not affected by voluntary dismissal of the underlying patent infringement claim, because the counterclaim can remain pending for independent adjudication. Furthermore, the assertions of new evidence undercutting decisions of the Texas court on defenses to infringement may properly be brought to the attention of the Texas court by motions by Tyer for relief from the Texas judgment. Thus, no prejudice to any party is apparent, and all parties will instead benefit from the clarification and nan-owing of issues for trial in this matter as the result of the dismissal of claims following disposition of the parallel Texas litigation. Therefore, EDI’s motion for “summary judgment” to “dismiss” Count I against Tyer, identified in subsection I.B.2.C., and construed as a motion for leave to amend pursuant to FecLR.Civ.P. 15 as to this defendant, will be granted.

Again, as a further consequence of the dismissal of Count I as to Tyer, the defendants’ March 12, 1996, motion for partial summary judgment on the inequitable conduct defense and for bifurcation of trial on inequitable conduct issues, identified in subsection I.B.2.b. of this ruling, is denied as moot as to defendant Tyer. Similarly, EDI’s last dispositive motion, its motion for partial summary judgment on the inequitable conduct defenses, identified in subsection I.B.2.g. of this ruling, is also denied as moot as to defendant Tyer.

Only the following few dispositive motions, or portions of dispositive motions, remain unresolved: (1) Tyer’s motion to dismiss Count II, as described in subsection I.B.2.a. of this ruling; (2) that part of EDI’s motion for partial summary judgment, as described in subsection I.B.2.C., seeking summary judgment on Count II against defendant Tyer; and (3) EDI’s motion to dismiss Parsons’s and Tyer’s counterclaims, as described in subsection I.B.2.d. of this ruling. The court’s analysis of the remaining issues therefore begins with the viability of Count II, the “alter ego” or “piercing the corporate veil” claim against Tyer, which addresses two of the remaining motions. The court leaves for last the motion to dismiss Parsons’s and Tyer’s counterclaims.

C. The “Alter Ego” Claim

Tyer has moved, in the first instance, to dismiss EDI’s “alter ego” claim against him pursuant to Fed.R.Civ.P. 12(b)(6), but the court finds that it need consider Tyer’s dispositive motion only under the standards for a motion for summary judgment pursuant to Fed.R.Civ.P. 56. Where on a Rule 12(b)(6) motion to dismiss “matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56.” Fed.R.Civ.P. 12(b)(6). Where matters outside of the pleadings are presented to the court, a motion to dismiss is not converted into a motion for summary judgment “where the district court’s order makes clear that the judge ruled only on the motion to dismiss.” Skyberg v. United Food and Commercial Workers Int’l Union, AFL-CIO, 5 F.3d 297, 302 n. 2 (8th Cir.1993). Where the district court has made the posture of its disposition clear, the appellate court will “treat the case as being in that posture.” Id Because Tyer sought alternative treatment of his motion as a motion for summary judgment and submitted materials outside of the pleadings for consideration with the motion, and because EDI has filed a cross-motion for summary judgment on Count II, the court will dispose of the motion only under the standards stated in Rule 56. There can be no question that both parties are on notice that the dispositive motions as to Count II will be determined according to summary judgment standards and that they have had the opportunity to litigate the question according to summary judgment standards in the circumstances of this case. Compare Madewell v. Downs, 68 F.3d 1030, 1048 (8th Cir.1995) (the district court’s failure to give notice of conversion of a motion to dismiss into a summary judgment motion is harmless where the nonmoving party has submitted materials outside of the pleadings in support of the motion and has had an adequate opportunity to respond to the summary judgment motion; constructive notice of the conversion is sufficient). Accordingly, the court will here consider the standards applicable to a motion for summary judgment pursuant to Fed.R.Civ.P. 56.

1. Summary judgment standards

The Eighth Circuit Court of Appeals recognizes “that summary judgment is a drastic remedy and must be exercised with extreme care to prevent taking genuine issues of fact away from juries.” Wabun-Inini v. Sessions, 900 F.2d 1234, 1238 (8th Cir.1990). On the other hand, the Federal Rules of Civil Procedure have authorized for nearly sixty years “motions for summary judgment upon proper showings of the lack of a genuine, triable issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1986). Thus, “summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed ‘to secure the just, speedy and inexpensive determination of every action.’” Wabun-Inini, 900 F.2d at 1238 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1986)); Hartnagel v. Norman, 953 F.2d 394, 396 (8th Cir. 1992).

The standard for granting summary judgment is well established. Rule 56 of the Federal Rules of Civil Procedure states in pertinent part:

Rule 56. Summary Judgment

(a) For Claimant. A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory judgment may, at any time after the expiration of 20 days from the commencement of the action or after service of a motion for summary judgment by the adverse party, move with or without supporting affidavits for a summary judgment in the party’s favor upon all or any part thereof.

(b) For Defending Party. A party against whom a claim ... is asserted ... may, at any time, move for summary judgment in the party’s favor as to all or any part thereof.

(e) Motions and Proceedings Thereon____ The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

Fed.R.Civ.P. 56(b) & (c) (emphasis added); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986); Reliance Ins. Co. v. Shenandoah South, Inc., 81 F.3d 789 (8th Cir.1996); Beyerbach v. Sears, 49 F.3d 1324, 1325 (8th Cir.1995); Munz v. Michael, 28 F.3d 795, 798 (8th Cir.1994); Roth v. U.S.S. Great Lakes Fleet, Inc., 25 F.3d 707, 708 (8th Cir.1994); Cole v. Bone, 993 F.2d 1328, 1331 (8th Cir.1993); Woodsmith Publishing Co. v. Meredith Corp., 904 F.2d 1244, 1247 (8th Cir.1990); Wabun-Inini, 900 F.2d at 1238 (citing Fed.R.Civ.P. 56(c)). A court considering a motion for summary judgment must view all the facts in the light most favorable to the nonmoving party, and give the non-moving party the benefit of all reasonable inferences that can be drawn from the facts. Matsushita Elec. Indus. Co. v. Zenith