The manager, Danny Nozell, asked for the dismissal on Thursday after the two sides came to an agreement. The order from Chancellor I'Ashea L. Myles finalised that request without prejudice, meaning it can be filed again.
Nozell, who runs She's Alive, an entity founded to manage and protect Parton's estate, had secured a temporary restraining order against Bryan Seaver and his security company, Squadron Augmented Protection Services, in September.
The complaint seeking the order said Seaver had threatened violence and the destruction of Parton's legacy and business empire.
Nozell wanted to turn the order into a permanent injunction against Seaver. The two sides were to have publicly argued the claims on Tuesday.
Seaver's lawyers said in a statement that he "cares deeply about his Aunt Dolly, her music, her family, and the legacy she left behind."
"He has made a career out of protecting his aunt while she was alive and remains committed to Dolly and his family" the statement said.
"Mr Seaver is grateful to put this misunderstanding behind him so that the entire family can continue to grieve peacefully and ensure that the bright light of Dolly's legacy remains completely untouched."
The dismissal brings a sudden and quiet end to a serious rift in the beloved country legend's inner circle that began while she was sick with cancer and spilled into public view in the weeks after her death on August 25.
Neither side nor court documents have revealed anything about why the complaint was withdrawn.
Emails requesting details and comment were sent to lawyers for Nozell and She's Alive.
Seaver, who Parton had handpicked to announce her death, said in court filings that he considered Nozell a close friend and ally before the restraining order.
He said the text messages Nozell cited as evidence of his threats were a "private conversation between two friends who were both frustrated, grieving and discussing strategy."
Parton, 80, was a widely adored singer, songwriter and philanthropist who spanned generations with hits such as Jolene, 9 to 5 and I Will Always Love You.
