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Voluntary Discontinuance Pursuant to CPLR 3217

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  • Posted on: Feb 2 2024

By Jonathan H. Freiberger

For a variety of reasons, a party asserting a claim may choose to discontinue same.  In such circumstances, CPLR 3217, provides the mechanism to do so.  [Eds. Note: this BLOG has addressed CPLR 3217 [here] and [here].]  

CPLR 3217(a), which addresses situations where a party asserting a claim may voluntarily discontinue a claim without the need for a court order, permits the party to do so, inter alia: (1) by serving on all parties “a notice of discontinuance at any time before a responsive pleading is served or, if no responsive pleading is required, within twenty days after service of the pleading asserting the claim and filing the notice with proof of service with the clerk of the court” (CPLR 3217(a)(1)); or, (2) “by filing with the clerk of the court before the case is submitted to the court or jury, a stipulation in writing signed by the attorneys of record for all parties, provided that no party is an infant, incompetent person for whom a committee has been appointed or conservatee and no person not a party has an interest in the subject matter of the action” (CPLR 3217(a)(2)). 

For the purposes of CPLR 3217(a)(1), an interesting question is whether a motion to dismiss constitutes the service of “a responsive pleading.”  The First Department in BDO USA, LLP v. Phoenix Four, Inc., 113 A.D.3d 507, 511 (2014), found a simple notice to discontinue to be “untimely” because plaintiff served it after “defendants filed their motions to dismiss.”  The Second Department, in Pinkesz Mut. Holdings, LLC v. Pinkesz, 198 A.D.3d 692 (2021), relying on several First Department cases other than BDO, agreed with the First Department’s position on this issue.  The Fourth Department, however, came to the opposite conclusion in Harris v. Ward Greenberg Heller & Reidy LLP, 151 A.D.3d 1808, 1809 (2017).  There, after a thorough analysis of relevant legislative histories, the Harris Court concluded that because a motion to dismiss is not a responsive pleading, a notice of discontinuance is not untimely when served after the filing of motion to dismiss.

In all situations other than those set forth in CPLR 3217(a), the party can only discontinue an asserted claim “upon order of the court and upon terms and conditions, as the court deems proper.”  CPLR 3217(b).  The decision of whether to grant a motion to “voluntarily discontinue an action pursuant to CPLR 3217(b) rests within the sound discretion of the court.”  Wilmington Savings Fund Society, FSB v. Moore, 220 A.D.3d 656, 656 – 57 (2nd Dep’t 2023) (citations and internal quotation marks omitted).  Absent “special circumstances, such as prejudice to a substantial right of the defendant” the court should grant a motion for voluntarily discontinuance.  Id. at 657 (citations and internal quotation marks omitted).  Similarly, a motion to discontinue should not be granted if the discontinuance would “circumvent an order of the court, avoid the consequences of a potentially adverse determination, or produce other improper results.”  Blauvelt Mini-mall, Inc. v. Town of Orangetown, 158 A.D.3d 678, 679 (2nd Dep’t 2018) (citations omitted); see also Marinelli v. Wimmer, 139 A.D.3d 914, 915 (2nd Dep’t 2016) (same).  In Marinelli, for example, the Court affirmed the motion court’s denial for a motion to voluntarily discontinue because the record supported “the conclusion that the requested discontinuance was improperly sought to avoid the consequences of a potentially adverse determination with respect to the defendants’ motion to change venue as well as to prejudice the defendants’ ability to obtain venue in a proper county.”  Marinelli, 139 A.D.3d at 915 (citations omitted).  However, “[d]elay, frustration and expense in preparation of a contemplated defense do not constitute prejudice warranting denial of a motion for a voluntary discontinuance under CPLR 3217(b).”  Eugenia VI Venture Holdings, Ltd. V. Maplewood Equity Partners, L.P., 38 A.D.3d 264, 265 (1st Dep’t 2007) (citations omitted).

On January 24, 2024, the Second Department, in U.S. Bank National Ass’n v. Narain, granted lender’s motion to voluntarily dismiss a mortgage foreclosure action pursuant to CPLR 3217(b).  [Eds. Note: this BLOG obtained some of the facts related to the Narain matter by reviewing the underlying file on the court’s NYSCEF filing system.]  Narain was an action to foreclose a mortgage (the “Second Action”).  The lender in Narain, however, had commenced an earlier action to foreclose the same mortgage (the “First Action”).  The court in the First Action issued a status conference order in which the plaintiff was directed to take certain actions by a specific date and dismissed the lender’s complaint when it failed to comply with the order.  The lender moved, inter alia, to restore the First Action to the calendar and for summary judgment, but the motion was denied.  The lender appealed the order denying its motion to restore.

While the appeal in the First Action was still pending, the lender commenced the Second Action.  In their answer in the Second Action, the borrowers asserted an affirmative defense that the action was barred by the applicable statute of limitations and interposed a counterclaim pursuant to RPAPL 1501(4) to cancel and discharge the mortgage.  [Eds. Note: this BLOG addressed statute of limitations issues in mortgage foreclosure actions [here], [here], [here], [here] and [here] and RPAPL 1501(4) [here], [here], [here], [here] and [here].]  The Court noted that lender moved pursuant to CPLR 3217(b) for leave to discontinue the Second Action “without prejudice, in order to restore [the First Action] to foreclose the mortgage and to proceed to judgment in that action.”  The motion court granted the motion and the borrower’s appealed.

The Second Department affirmed and stated:

The determination of a motion pursuant to CPLR 3217(b) for leave to discontinue an action without prejudice is within the sound discretion of the court (see Tucker v Tucker, 55 NY2d 378, 383; Nationstar Mtge., LLC v Dalton, 201 AD3d 726, 727). “Generally such motions should be granted unless the discontinuance would prejudice a substantial right of another party, circumvent an order of the court, avoid the consequences of a potentially adverse determination, or produce other improper results” (Haughey v Kindschuh, 176 AD3d 785, 786 [internal quotation marks omitted]; see HSBC Bank USA, N.A. v Kone, 188 AD3d 836, 838). Here, there was no showing of substantial prejudice or other improper results arising from the proposed discontinuance of the action (see HSBC Bank USA, N.A. v Kone, 188 AD3d at 838; Chase Home Fin., LLC v Sulton, 185 AD3d 646, 647).

On the same day, the Second Department also decided the lender’s appeal on the motion court’s denial of the motion to restore the First Action to the calendar and reversed that decision.  [Here]

Jonathan H. Freiberger is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes and is not intended to be and should not be taken as legal advice.

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