Voluntary Discontinuances – I

Baez v Parkway Mobile Homes, Inc.,

125 AD3d 905 [2d Dept., 2015]

This is the first of a series of three notes on voluntary discontinuances. Today’s case concerns when a voluntary discontinuance should, or more properly should not, be allowed. Next will be a discussion of when a voluntary discontinuance should be considered a disposition on the merits for res judicata purposes. Finally, a consideration of when the court should impose some form of costs or attorney’s fees on the plaintiff as a condition of discontinuance.

CPLR 3217 (a) allows the plaintiff to withdraw a claim without court order within a brief window after asserting it, or by stipulation of all appearing parties (it applies to any party asserting a claim, but let’s keep things simple). If any appearing party will not stipulate, an order is required. CPLR 3217 (b) allows the motion at any time before submission of the case to the court or jury, and specifies that the court may impose terms and conditions on the discontinuance. It does not otherwise specify when the discontinuance should be allowed or not.

Case law establishes that a voluntary discontinuance should ordinarily be allowed, unless there is a specific reason not to.

“ordinarily a party cannot be compelled to litigate and, absent special circumstances, discontinuance should be granted.” (Tucker v Tucker, 55 NY2d 378, 383 [1982])

Tucker itself presented such special circumstances, as the plaintiff in a divorce action sought to avail herself of the more favorable provisions of the Equitable Distribution statutes, in a manner contrary to the legislative scheme. Plaintiff had in fact commenced a second action, so that no one was compelling her to litigate. Rather, under the circumstances she was stuck with her first action and its controlling law.

Subsequent case law found special circumstances where the discontinuance would prejudice a substantial right, or was intended to circumvent an adverse order of the court, such as a conditional order of preclusion (Kaplan v Vil. of Ossining, 35 AD3d 816 [2d Dept 2006]), or even a potentially adverse determination (see, GMAC Mortgage, LLC v Bisceglie, 109 AD3d 874 [2d Dept 2013]). In GMAC Mortgage, it had come out that the plaintiff was under investigation for the use of improper affidavits to obtain summary judgment against mortgagees such as Bisceglie, and the plaintiff sought to avoid the adverse consequences by discontinuing the action.

On the other hand, merely because there have been rulings adverse to the plaintiff, it does not follow that discontinuance is an improper attempt to circumvent them. It has been held, for example, that where a plaintiff had failed in its attempt to obtain a preliminary injunction, there was no reason to disallow a discontinuance, since the denial of provisional relief is not a determination on the merits and re-commencing the action the order will not circumvent it (Mathias v Daily News, L.P., 301 AD2d 503 [2d Dept 2003]).

In Baez, the plaintiffs were faced with a distinctly adverse situation due to their failure to comply with the defendant’s 90-day notice and the defendant’s pending summary judgment motion. While the summary judgment motion was sub judice, the defendant moved to dismiss for failure to prosecute, and the plaintiff moved for leave to discontinue. Supreme Court’s at first granted the defendant summary judgment and, at the same time, granted the plaintiff leave to discontinue. After reargument, Supreme Court adhered to the grant of leave to discontinue, and sua sponte vacated the summary judgment order.

On appeal, the Appellate Division held that granting the plaintiff a discontinuance without prejudice allowed it to circumvent the adverse consequences of its failure to comply with the 90-day notice as well as the adverse summary judgment motion. The Appellate Division therefore reversed the leave to discontinue, and reinstated the summary judgment order in favor of the defendant.

Rothenberg v Congregation Anshei Sfard, 125 AD3d 631 [2d Dept 2015] was another recent case where a discontinuance was intended to circumvent an order. The personal-injury plaintiff had originally sued in Kings County. Defendant moved for a change of venue to Rockland County, and the parties eventually stipulated to move the action to Rockland County, which the court s0-ordered. Within a few months, plaintiff was back in Kings County with a new action on the same facts, and moved to discontinue the Rockland County action. The motion was properly denied.

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