CPLR 3217(a)(1) untimely unilateral voluntary discontinuance

CPLR 3217(a)(1)

BDO USA, LLP v Phoenix Four, Inc., 2014 NY Slip Op 00410 [1st Dept. 2014]

The motion court erred in deeming defendants' motions withdrawn. Indeed, the parties never "stipulated" to discontinue BDO's action. Rather, BDO unilaterally filed a notice of voluntary discontinuance. This notice was untimely because BDO served it after defendants filed their motions to dismiss (see CPLR 3217[a][1]; Polgar v Focacci, 2 Misc 3d 836, 839-840 [Sup Ct, NY County 2003]; David D. Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C3217:8 ["[t]he defendant who has moved to dismiss under CPLR 3211 has already done as much in the litigation (and more) than if she had merely answered the complaint"]). Indeed, if a motion to dismiss is not a "responsive pleading" within the meaning of CPLR 3217(a)(1), a plaintiff would be able to freely discontinue its action without prejudice solely to avoid a potentially adverse decision on a pending dismissal motion. This Court has made clear that such conduct is improper (see Rosenfeld v Renika Pty. Ltd., 84 AD3d 703 [1st Dept 2011]; McMahan v McMahan, 62 AD3d 619, 620 [1st Dept 2009]). Thus, BDO's notice was ineffective and a nullity, and the motion court should not have deemed defendants' motions withdrawn (see Citidress II Corp. v Hinshaw & Culbertson LLP, 59 AD3d 210, 211 [1st Dept 2009]; Tutt v Tutt, 61 AD3d 967 [2d Dept 2009]).

That BDO served its notice of discontinuance in an attempt to circumvent the Administrative Judge's order denying its request to have its action assigned to the Commercial Division may be a valid basis for granting a discontinuance with prejudice (see e.g. Rosenfeld, 84 AD3d at 703; McMahan, 62 AD3d at 619; NBN Broadcasting v Sheridan Broadcasting Networks, 240 AD2d 319 [1st Dept 1997]; Hirschfeld v Stahl, 242 AD2d 214 [1st Dept 1997]). However, given the unusual procedural history that led to the commencement of this action, we decline to discontinue the action with prejudice. Specifically, this action arose from defendant SRC's failure to properly notify this Court of the settlement the parties had reached in the contribution action before the mediator. Indeed, although the parties had reached a settlement, and the mediator specifically directed the parties to inform this Court of the settlement, SRC unilaterally took the position that the settlement was not effective and that the appeal should continue. As a result, this Court dismissed the contribution action before the parties finalized a [*5]written agreement, thus precluding BDO from enforcing the oral agreement (see BDO Seidman LLP, 92 AD3d 426; BDO Seidman LLP, 70 AD3d 556).

Because the motion court deemed Phoenix's motion to dismiss withdrawn without having considered its merit, we remand the action for further proceedings, including consideration of the motion.

Empahsis is mine.

Construed against the drafter

Gould Invs., L.P. v Travelers Cas. & Sur. Co. of Am., 2011 NY Slip Op 02844 (App. Div., 2nd 2011)

Here, the provision of the policy addressing the parties' obligations regarding subrogation provided that, "you must transfer to us all your rights of recovery against any person or organization for any loss you sustained and for which we have paid or settled. You must also do everything necessary to secure those rights and do nothing after loss to impair them." The Supreme Court properly determined that the plain and ordinary meaning of the first sentence of that provision obligated the plaintiff to transfer rights of recovery only upon payment of the claim and that, accordingly, no subrogation rights had accrued to the defendant upon which it could base its motion. As any ambiguity introduced by the second sentence of that provision must be construed against the insurer as drafter of the policy (see Essex Ins. Co. v Laruccia Constr., Inc., 71 AD3d at 818; United States Fire Ins. Co. v Knoller Companies, Inc., 80 AD3d 692), the Supreme Court's determination was proper.

1701 Rest. on Second, Inc. v Armato Props., Inc., 2011 NY Slip Op 03106 (App. Div., 1st 2011)

The parties agree that this Court need look no further than the "clear language" contained in the "four corners" of the agreement, but differ on their interpretation of the asserted clear language. Under the "clear language" rule of contract interpretation, we disregard extrinsic evidence if there is, as the parties agree, no ambiguity, and look only to the language of the agreement (see R/S Assoc. v New York Job Dev. Auth., 98 NY2d 29, 33 [2002]). Tenant correctly points to language in the 2001 Lease Extension and Modification Agreement stating that, other than as modified by such document, the terms of the 1994 lease "remain in full force and effect." Thus, the clear language of the rider to the 1994 lease directly supports tenant's contention that the renewal option was still in effect and had not been "subsumed" as defendant landlord argues. Landlord fails to direct the court to any clear language in support of its position.

"Ordinarily, a party cannot be compelled to litigate and, absent special circumstances, leave to discontinue a cause of action should be granted [unless] the party opposing the motion can demonstrate prejudice if the discontinuance is granted" (see St. James Plaza v Notey, 166 AD2d 439, 439 [1990]). Under the circumstances of this case, Supreme Court correctly denied landlord's motion. Landlord sought to discontinue its counterclaim for declaratory judgment in Supreme Court and then pursue similar relief in Civil Court, notwithstanding that tenant had cross-moved for leave to amend its complaint, which should be freely granted (CPLR 3025[b]), seeking to add a cause of action for declaratory relief related to the same subject matter. Moreover considerable discovery had already occurred in relation to landlord's counterclaim. Thus, it would have been inequitable to allow landlord to discontinue its counterclaim at this point in the litigation (see St James Plaza v Notey at 440).

The bold is mine.

Res Judicata, a prior stip, and CPLR 3217

CPLR 3217 Voluntary discontinuance
(c) Effect of discontinuance

Maurischat v County of Nassau2011 NY Slip Op 01249 (App. Div., 2nd 2011)

After locating the settlement documents, the defendant moved, inter alia, for summary judgment on res judicata grounds. The Supreme Court denied that branch of the defendant's motion on the ground that since the settlement documents did not state that the prior action was settled "with prejudice," res judicata was inapplicable to bar the second action. " Under res judicata, or claim preclusion, a valid final judgment bars future actions between the same parties on the same cause of action'" (Landau, P.C. v LaRossa, Mitchell & Ross, 11 NY3d 8, 12, quoting Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 347; see Wisell v Indo-Med Commodities, Inc., 74 AD3d 1059, Matter of AutoOne Ins. Co. v Valentine, 72 AD3d 953, 955; Pawling Lake Prop. Owners Assn., Inc. v Greiner, 72 AD3d 665, 667; 99 Cents Concepts, Inc. v Queens Broadway, LLC, 70 AD3d 656, 658). "A voluntary discontinuance ordinarily is not a decision on the merits, and res judicata does not bar a [plaintiff] from maintaining another proceeding for the same claim unless the order of discontinuance recites that the claim was discontinued or settled on the merits" (Matter of AutoOne Ins. Co. v Valentine, 72 AD3d at 955). Thus, a stipulation to discontinue an action without prejudice is not subject to the doctrine of res judicata (see Landau, P.C. v LaRossa, Mitchell & Ross, 11 NY3d at 12; Matter of AutoOne Ins. Co. v Valentine, 72 AD3d 953; see also 99 Cents Concepts, Inc. v Queens Broadway, LLC, 70 AD3d at 658; cf. Greenstone/Fontana Corp. v Feldstein, 72 AD3d 890, 893; Pawling Lake Prop. Owners Assn., Inc. v Greiner, 72 AD3d at 667; Liberty Assoc. v Etkin, 69 AD3d 681, 682-683).

Here, the Supreme Court properly found that the doctrine of res judicata did not bar this action since the stipulation discontinuing the plaintiffs' prior action against the defendant, commenced in 1993, was not with prejudice (see Matter of AutoOne Ins. Co. v Valentine, 72 AD3d at 955; North Shore-Long Island Jewish Health Sys., Inc. v Aetna US Healthcare, Inc., 27 AD3d 439, 440; Southampton Acres Homeowners Assn. v Riddle, 299 AD2d 334, 335; Van Hof v Town of Warwick, 249 AD2d 382, 382; Forte v Kaneka Am. Corp., 110 AD2d 81, 85; see generally CPLR 3217[c]).

The defendant's contention that the general release was intended to prevent the litigation of any claim that might have arisen out of the construction of its culvert is improperly raised for the first time before this Court (see Matter of Castillo v Town of Oyster Bay, 70 AD3d 939; Matter of Panetta v Carroll, 62 AD3d 1010).

Voluntary Discontinuance: CPLR R. 3217

CPLR R. 3217 Voluntary discontinuance

New York Downtown Hosp. v Terry,2011 NY Slip Op 00253 (App. Div., 1st 2011) 

ORDERED that the order is reversed, on the facts and in the exercise of discretion, with costs, and the appellants' motion pursuant to CPLR 3217(b), in effect, to enforce a stipulation pursuant to which the plaintiff agreed to voluntarily discontinue the action insofar as asserted against them is granted; and it is further,

ORDERED that the matter is remitted to the Supreme Court, Queens County, to convert the cross claims asserted by the defendants Saga House Condominium and Charles Greenthal Management against the appellants to a third-party action, and to amend the caption accordingly.

"In the absence of special circumstances, such as prejudice to a substantial right of the defendant, or other improper consequences, a motion for a voluntary discontinuance should be granted" (Expedite Video Conferencing Servs., Inc. v Botello, 67 AD3d 961, 961; see Tucker v Tucker, 55 NY2d 378, 383). Here, the Supreme Court improvidently exercised its discretion in denying the appellants' motion pursuant to CPLR 3217(b), in effect, to enforce a stipulation pursuant to which the plaintiff agreed to voluntarily discontinue the action insofar as asserted against them because there was no showing that the defendants Saga House Condominium and Charles Greenthal Management would be prejudiced by such discontinuance, since their cross claims will continue as a third-party action (see Expedite Video Conferencing Servs., Inc. v Botello, 67 AD3d at 961; Parraguirre v 27th St. Holding, LLC, 37 AD3d 793, 794; Citibank v Nagrotsky, 239 AD2d 456, 457).

CPLR R. 3217 Late discontinuance to avoid decision on pending motion

CPLR R. 3217 Voluntary discontinuance

(a) Without an order

McMahan v McMahan, 2009 NY Slip Op 04165 (App. Div., 1st, 2009)

As against appellant, the action should not have been discontinued
without prejudice where plaintiff's notice of discontinuance was
untimely under CPLR 3217(a)
(see Citidress II Corp. v Hinshaw & Culbertson LLP, 59 AD3d 210,
211 [2009]), and was apparently served in order to avoid an adverse
decision on a pending motion to dismiss the complaint with prejudice
and to enable plaintiff to raise the claims she makes herein in another
pending action (see NBN Broadcasting v Sheridan Broadcasting Networks,
240 AD2d 319 [1997]). The foregoing renders academic appellant's claim
that the motion court should have granted its motion to dismiss the
complaint on default (see 176-60 Union Turnpike v Howard Beach Fitness Ctr., 271 AD2d 327, 328 [2000]).

The bold is mine.

CPLR R. 3217 “The right to discontinue a divorce action may be waived”

CPLR R. 3217 Voluntary discontinuance

(a) Without an order

Tutt v Tutt, 2009 NY Slip Op 03511 (App. Div., 2nd, 2009)

Pursuant to CPLR 3217(a)(1), a party may discontinue an action
without court order by serving "a notice of discontinuance at any time
before a responsive pleading is served or within twenty days after
service of the pleading asserting the claim, whichever is earlier."
Where no pleadings have been served, [*2]therefore,
the plaintiff has the "absolute and unconditional right" to discontinue
the action by serving a notice of discontinuance upon the defendant
without seeking judicial permission (Battaglia v Battaglia, 59 NY2d 778, revg on dissenting mem 90 AD2d 930, 933; see DeLuise v DeLuise, 288 AD2d 135, 136; Newman v Newman, 245 AD2d 353).

The right to discontinue a divorce action under CPLR 3217(a)(1)
may be waived, however, under circumstances demonstrating the
plaintiff's voluntary and knowing relinquishment of that right
(see Minkow v Metelka, 46 AD3d 864; cf. Giambrone v Giambrone,
140 AD2d 206, 207). "A valid waiver requires no more than the voluntary
and intentional abandonment of a known right which, but for the waiver
would have been enforceable," and it "may arise by either an express
agreement or by such conduct or a failure to act as to evince an intent
not to claim the purported advantage"
(Golfo v Kycia Assoc., Inc., 45 AD3d 531, 532-533 [internal quotation marks omitted]; see Peck v Peck,
232 AD2d 540). "A so-ordered stipulation is a contract between the
parties thereto and as such, is binding on them and will be construed
in accordance with contract principles and the parties' intent" (Aivaliotis v Continental Broker-Dealer Corp., 30 AD3d 446, 447 [internal quotation marks omitted]).

By the clear and unambiguous terms of the so-ordered stipulation
here, the husband waived his right to serve a notice of discontinuance
more than 20 days after December 1, 2006, and thereby discontinue the
action pursuant to CPLR 3217(a). His notice of discontinuance served in
November 2007, therefore, was a nullity, and the Supreme Court properly
vacated it upon the wife's motion.

The bold is mine