Discontinuance without prejudiceFebruary 22, 2014

American Tr. Ins. Co. v Roberson, 2014 NY Slip Op 01144 (2d Dept. 2014)

“In general, absent a showing of special circumstances, including prejudice to a substantial right of the defendant or other improper consequences, a motion for a voluntary discontinuance should be granted without prejudice (see Tucker v Tucker, 55 NY2d 378, 383-384;Wells Fargo Bank, N.A. v Fisch, 103 AD3d 622Parraguirre v 27th St. Holding, LLC, 37 AD3d 793, 793-794; Valladares v Valladares, 80 AD2d 244, 258, affd on other grounds 55 NY2d 388). Contrary to the defendants’ contention, the plaintiff was not required to demonstrate any basis for seeking a voluntary discontinuance (see Larchmont Fed. Sav. & Loan Assn. v Ebner, 89 AD2d 1009). Furthermore, there was no showing that the rights of the defendants or others would be prejudiced if the plaintiff were permitted to commence a second action for the same relief in another venue”

This is an interesting case, but you would not know it from reading the decision.  Procedurally, this case was commenced in Supreme, Nassau County.  Defendant answered, and while this is hard for many to believe (and I can share this now), most Nassau Supreme judges follow(ed) Unitrin.  One or two judges were wishy washy on this point.  So a decision was made to file the same action in Supreme Court, Manhattan.  It is my right to chose were I want a case heard and to engage in forum shopping.   We moved to discontinue and a magical cross-motion containing an affidavit of service saying it was served on me never made its way to my office.  By the way, this is why e-filing is great – you cannot fall victim to these non-existent motions and oppositions.  I learned the cross-motion sought discontinuance with prejudice, costs, attorneys fees, etc., but this was when we learned that we lost our motion.

Figuring the motion would be unconditionally granted, the Manhattan action was filed and we obtained summary judgment and a non-coverage declaration.

As you now know, the Nassau County action was discontinued with prejudice, with costs.  Defendant, having prevailed,  moved to void the declaration of non-coverage in the Manhattan action.   I filed an appeal in the Nassau County action, and cross-moved to stay the Manhattan application to void our declaration in Manhattan.  Supreme Court in Manhattan granted the stay and the Nassau order was modified so that the discontinuance is without prejudice.

As to filing Nassau County, it might not be a bad idea. (1) Inasmuch as the most recent precedent, Clennon, cites favorably to Unitrin; (2) Lucas in the First Department cites to NYP v. Cwide; and (3) the Second Department in one of the most recent Geico cases (see prior post on blog) held open a reconsideration of Lincoln General upon an appropriate record, it appears that Unitrin may be followed in both Departments.

Incidentally, the Court found there was no prejudice if we were allowed to file this action in the First Department.  Not sure what if anything you can read into that line, since Defendant made it clear that Plaintiff could not obtain the same declaration in Nassau that it could (and did) in Manhattan.  Therefore, Defendant argued that it was prejudiced.  Assuming Lincoln General was still good law, then Defendant was correct that it was prejudiced.  However, if Unitrin is now the guiding precedent, then Defendant could not be prejudiced.


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