Voluntary Discontinuances – II

Haber v Raso,

130 AD3d 781 [2d Dept., 2015]

CPLR 3217(a) allows a brief window for a plaintiff to withdraw, or voluntarily discontinue, an action, without requiring either a stipulation of any appearing parties or leave of court. Plaintiff needs to serve a notice of discontinuance on all parties before a responsive pleading is served or within twenty days of the service of the complaint. (Again, this actually applies to any party asserting a claim.) The notice of discontinuance is then filed with the clerk.

Where the plaintiff voluntarily discontinues the action by mere notice, 3217 (c) states that the discontinuance is without prejudice, and the plaintiff is free to commence another action when and where he chooses. The only catch is that the plaintiff cannot play this game forever. If the claim has already been interposed and discontinued, by any method, in any state or federal court, a subsequent discontinuance by notice “operates as an adjudication on the merits”.

That seems categorical. Is it really?

In today’s case, plaintiff sued in Supreme Court for rent arrears and damage to real property. The problem was that the plaintiff had sued on the same claim twice before, in Civil Court and in Supreme, and voluntarily discontinued both actions. The second discontinuance, at least, was accomplished by serving and filing a notice of discontinuance.

Defendants moved to dismiss, arguing that the second discontinuance was an adjudication on the merits, and that this third action was barred by res judicata. Supreme Court denied the motion, but the Appellate Division reversed and dismissed. The court noted that “[u]nder the circumstances of this case, where there was no legitimate purpose for discontinuing the second action” the discontinuance operated as an adjudication on the merits. [emphasis supplied]

That phrase raises the question of whether there can be circumstances where a discontinuance by notice is not an adjudication on the merits, despite the categorical language of CPLR 3217 (c). The answer is “yes,” where the discontinuance is for some good cause and not for harassment by means of successive lawsuits.

In Tortorello v Carlin, 162 AD2d 291 [1st Dept., 1990], cited in Haber, plaintiff sued for legal malpractice, twice, and each suit had been discontinued. The underlying dispute was over legal fees. Defendants had represented plaintiff in a matrimonial action, and had been relieved as counsel and awarded a charging lien by the matrimonial court. A hearing had been ordered, in the matrimonial action, to fix the amount of the lien. Plaintiff then sued claiming legal malpractice. The action was discontinued by agreement, since defendants didn’t want to notify their malpractice carrier, and the parties expected to resolve the dispute by negotiation. When no agreement was reached, plaintiff sued a second time. Plaintiff then defaulted on the lien hearing, and judgment was entered in favor of the defendants.

Plaintiff filed a stipulation of discontinuance of the second action, but the only signature on it was that of plaintiff’s counsel.

Plaintiff now sued for malpractice, a third time, and defendants moved to dismiss on the basis of the two earlier discontinuances. Plaintiff’s first argument was that the second discontinuance was by stipulation, not mere notice, making CPLR 3217 (c) inapplicable. A stipulation requires the signature of all parties, however, and so the purported stipulation, served on all parties and filed with the clerk, was held to be a notice of discontinuance. It was not deemed an adjudication on the merits, however, since it was done not for purposes of harassment but for the legitimate purpose of conserving the plaintiff’s resources and achieving an agreement by negotiation.

Note also, by the way, that the discontinuance of a second action by notice is only an adjudication on the merits where the first action was ended by some form of discontinuance. If the first action was ended in some other manner, 3217 (c) does not apply. Where, for example, the first action was not discontinued, but dismissed as abandoned, there is no predicate for deeming the discontinuance by notice of a second action an adjudication on the merits and a third action is not barred (Rodrigues v. Samaras, 117 A.D.3d 1022 [2d Dept., 2014]).

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