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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: April 19, 2020

Court Did Not Abuse Discretion in Dismissing Years-Old Action Without Prejudice

On April 16, 2020, the Third Department issued a decision in Green Tree Servicing LLC v. Shiow Fei Ju, 2020 NY Slip Op. 02307, holding that a trial court did not err in dismissing a years-old action without prejudice, explaining:

Defendant contends that Supreme Court erred in granting plaintiff’s motion without prejudice because plaintiff has delayed the action by failing to reply to her counterclaim and has failed to respond to discovery demands. CPLR 3217(b) provides that, upon an order of the court, an action may be voluntarily discontinued upon terms and conditions, as the court deems proper. Absent a showing of special circumstances, including prejudice or other improper consequences, a motion for voluntary discontinuance is generally granted.

Although this action had been pending for approximately three years at the time of the motion, the litigation itself remained in its early stages. In addition, the record confirms that defendant never sought default nor moved to compel discovery. Furthermore, the parties had not yet participated in the mandatory settlement conference. Indeed, determination of plaintiff’s motion was the first occasion where Supreme Court was called upon to intervene in this action. Although defendant alleged that she would sustain prejudice if her discovery went unanswered, Supreme Court correctly determined that there was no evidence of prejudice to defendant or other improper consequences flowing from the discontinuance, as the parties can engage in necessary discovery in a subsequent foreclosure action.

Defendant also contends that the action should not have been discontinued without prejudice because she filed a counterclaim. This argument lacks merit as defendant did not pursue default on her counterclaim within one year and, as such, the claim is deemed to have been abandoned. Moreover, the interposition of a counterclaim in and of itself is not dispositive with respect to the discontinuance. The discontinuance must work a particular prejudice against a defendant. Here, defendant is not prejudiced, as she will be able to assert her counterclaim in a subsequent foreclosure action. Although defendant argues that one’s home is an interest that is unquantifiable, she will be able to continue to reside in the mortgaged premises pending another action and will have the same rights available to her as were in the discontinued action.

(Internal quotations and citations omitted).

Discontinuing claims “without prejudice” means that the plaintiff retained the right to reassert them. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client need help settling an action or have questions regarding whether it is possible to reassert claims that were the subject of an earlier dismissal.

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