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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: March 7, 2018

Dismissal of Action for Failure to File Note of Issue Affirmed

On March 1, 2018, the First Department issued a decision in Austin v. Gould, 2018 NY Slip Op. 01404, affirming the dismissal of an action for failure to file a Note of Issue, explaining:

When served with a 90-day demand pursuant to CPLR 3216, it is incumbent upon a plaintiff to comply with the demand by filing a note of issue or by moving, before the default date, to either vacate or extend the 90-day period.

The court properly found that plaintiffs failed to provide a justifiable excuse for failing to file a note of issue or request an extension of time within 90 days of the date they admitted receiving the demand letter, May 16, 2016. Their cross motion was filed on August 19, 2016, three days too late.

Plaintiffs assert that they did not timely file the note of issue because they required further discovery. However, the court noted that on March 30, 2016, the date plaintiffs were ordered to file the note of issue, there was no indication that they claimed discovery was still outstanding (other than a deposition which took place in April 2016 as per the parties’ stipulation). The record is devoid of evidence of any attempts by plaintiffs to avail themselves of available remedies for defendants’ alleged noncompliance with discovery.

In any event, plaintiffs’ motion was properly denied since the alleged error by the court as to the date of their receipt of the 90-day demand letter did not affect its finding that plaintiffs failed to provide a justifiable excuse for failing to timely file their cross motion for an extension of time and that they lacked a meritorious claim.

(Internal quotations and citations omitted).

New York procedural law (including the special rules applying to litigation in the Commercial Division of the New York courts) is not particularly complex. Still, there are procedural rules and as this decision illustrates, if a litigant ignores them, it can pay a high price. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding New York practice, and particularly regarding the rules governing practice in the Commercial Division.

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